Practice and liability
Conversion
Using client funds for the licensee’s or the brokerage’s own purposes
Spending money held in trust, even briefly and even with every intention of replacing it. It is theft in substance and is treated accordingly — license revocation and, commonly, criminal exposure.
How the exam asks about it
Ranked above commingling in seriousness, and intention to repay is not a defense to either.
Related terms
Sitting the license exam? Find out what you actually know.
Free practice questions built to the published national content outline, with an explanation after every answer. No account, no paywall.
Independent exam preparation. Real Estate Exam Bank is not a state-approved pre-licensing course and completing anything here does not satisfy any state education requirement. Not affiliated with, endorsed by, or authorized by any state real estate commission, Pearson VUE, or PSI. Practice questions here are original study material, not the official exam.