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:
Why Commingling Is Correct
Answer B: Commingling
Exam Tip: Agency
Agency questions are among the most tested on the exam. Focus on the difference between client and customer, and memorize the fiduciary duties (OLD CAR). Watch for questions that try to blur the line between a general agent and a special agent.
Key Agency Terms in This Question
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Related California Questions
- 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
- A real estate licensee in California is found to have commingled client funds with their personal bank account. This violates:DRE & Licensing
- Under California law, when must a broker deposit funds received from clients into the broker's trust account?Trust Funds
- Real estate trust funds must be deposited into the trust account within how many business days of receipt?DRE & Licensing
- Under California law, the maximum amount a broker may keep of their own funds in a trust account (to cover bank service charges) is:DRE & Licensing
- Under California law, a real estate broker must deposit trust funds received into a neutral escrow or into the broker's trust fund account no later than:Trust Funds
- When a real estate broker receives a deposit check from a buyer, California law requires the broker to place the funds in a trust account or deliver them to the escrow within:DRE & Licensing
Key Terms to Know
A financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
AgencyA legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
Dual AgencyA situation where a single real estate agent or brokerage represents both the buyer and the seller in the same transaction.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
State-Specific Concepts
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