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Pass California

Practice and Disclosures, 25% of the examination

Commingling

Mixing a client's trust funds with the broker's own funds.

Commingling occurs the moment trust money sits in a general account or a personal account, whether or not any of it is spent. The $200 allowance for bank service charges is the only recognised exception. Auditors find commingling by comparing the beneficiary records against the bank balance, so a shortage of any size is visible.

See also

Trust fundsMoney or other things of value received by a broker on behalf of another person in a transaction requiring a real estate licence.ConversionUsing trust funds for a purpose other than the one for which they were entrusted.

See it in a question

One question from Practice and Disclosures, so the term lands in the context the exam uses it in.

Practice and Disclosures ยท 25%Trust Account Management

A salesperson receives a $5,000 good-faith deposit check made payable to the seller. What must happen to it?

Written to DRE's published topic list. Not a real examination question, since reproducing those is a misdemeanour under B&P Code section 123.

Where this is tested

Practice of Real Estate and DisclosuresThe largest area by a wide margin, and the one most study plans leave until last. It is where trust accounts, fair housing, advertising, supervision, DRE discipline and every mandated disclosure live.25%Practise Practice and Disclosures50 questions on this area, every option explained.Practice

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