Trust Funds
What is 'conversion' of trust funds?
AChanging the type of trust account held
BThe illegal use of a client's trust funds for the broker's own benefit or purposes✓ Correct
CConverting a trust account from one bank to another
DConverting property held in trust to personal use
Explanation
Conversion is the intentional misappropriation of client trust funds for the broker's personal use. It is the most serious trust fund violation, constituting both a DRE violation (grounds for license revocation) and theft under California criminal law.
Related California Trust Funds Questions
- Which of the following is TRUE about salesperson trust fund accounts?
- Which of the following is considered 'commingling' of trust funds?
- Conversion of trust funds occurs when a broker:
- A broker's trust fund account must be reconciled:
- A broker is required to maintain a columnar record (trust fund ledger) for the trust account. The purpose of this record is to:
- A broker who violates trust fund regulations is subject to which of the following penalties?
- How often must a broker reconcile the trust fund bank account balance with the total of all client ledger balances?
- A broker may keep a maximum of how much of the broker's own funds in the trust account without it being considered commingling?
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