Conversion of trust funds occurs when a broker:
Why Uses client trust funds for the broker's personal use or business expenses Is Correct
Answer B: Uses client trust funds for the broker's personal use or business expenses
Exam Tip: Trust Funds
Trust fund questions test the rules for handling client money. Know the deadlines for depositing trust funds, what constitutes commingling vs. conversion, and the penalties for violations.
Key Trust Funds Terms in This Question
People Also Study
Related California Questions
- What is 'conversion' in the context of trust funds?Trust Funds
- Under California law, a real estate broker who manages property for clients must maintain a separate trust account for client funds. Mixing client funds with the broker's personal funds is called:Agency
- A real estate licensee who engages in 'conversion' of trust funds has:DRE & Licensing
- The illegal use of client trust funds for the broker's personal benefit is called:Trust Funds
- A broker may maintain a personal (broker's) funds balance in the trust account of up to how much to cover bank service charges?Trust Funds
- Interest earned on funds held in a broker's trust account generally belongs to:Trust Funds
Key Terms to Know
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Closing CostsFees and expenses paid by the buyer and/or seller at the closing of a real estate transaction, in addition to the property's purchase price.
Math Concepts
State-Specific Concepts
Study This Topic
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →