Practice and Disclosures, 25% of the examination
Conversion
Using trust funds for a purpose other than the one for which they were entrusted.
Conversion is an unauthorized use or appropriation of money that belongs to another person. It can support discipline up to revocation, a qualifying claim against the Consumer Recovery Account, civil liability, and possible criminal liability depending on the conduct. On the exam, look for facts showing that the holder used or redirected the money, rather than merely depositing or holding it in the wrong account.
See also
Test the distinction
A relevant question from Agency and Fiduciary Duties, selected because its facts or explanation use this concept.
An agent holds a buyer's $10,000 deposit and uses it for two weeks before depositing it. Which fiduciary duty is most directly breached?
Written to DRE's published topic list. Not a real examination question, since reproducing those is a misdemeanor under B&P Code section 123.
Primary sources
Use these authorities when a course summary, forum answer, or older flashcard conflicts with the current California rule.