Trust Funds
The illegal use of client trust funds for the broker's personal benefit is called:
ACommingling
BConversion✓ Correct
CHypothecation
DEmbezzlement
Explanation
Conversion is the unauthorized use of trust funds belonging to a client for the broker's own purposes. It is a serious violation of California law and DRE regulations that can result in license revocation, civil liability, and criminal prosecution.
Related California Trust Funds Questions
- Under California law, trust fund records must be retained for a minimum of:
- A broker receives a $10,000 earnest money deposit in cash from a buyer. The broker must:
- A broker's trust account cannot be an interest-bearing account unless:
- A California real estate broker's trust account must be maintained at:
- A buyer and seller have a dispute over who is entitled to an earnest money deposit after a transaction falls through. The broker should:
- A broker must maintain a separate trust account ledger for each:
- What must a broker do when they receive a buyer's earnest money deposit check with instructions to hold it uncashed pending acceptance?
- Which of the following is NOT a permissible trust account?
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