Trust Funds
What is 'conversion' in the context of trust funds?
AConverting a property from rental to owner-occupied
BThe illegal use of client trust funds for personal or business expenses✓ Correct
CChanging the type of escrow account
DConverting a lease to a purchase
Explanation
Conversion is the illegal use of client trust funds for the broker's own personal use or business expenses. It is a criminal offense and grounds for license revocation.
Related California Trust Funds Questions
- A real estate broker's trust account must be maintained at:
- When a real estate transaction closes, how should trust funds (e.g., the buyer's deposit) be handled?
- Which of the following is considered 'commingling' of trust funds?
- Which of the following is NOT a permissible trust account?
- Which of the following is an example of a trust fund?
- A DRE audit of a broker's trust account reveals that the balance of individual client ledgers is less than the total bank balance. This condition is called:
- If a buyer's offer is rejected and they had deposited earnest money, the broker must:
- A broker receives a $10,000 earnest money deposit in cash from a buyer. The broker must:
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