Property Management
A property manager receives a $1,500 earnest money deposit and uses it to pay office rent. This is:
AAcceptable if the tenant's first month's rent covers it
BA violation of trust accounting rules and conversion of funds✓ Correct
CPermitted if the owner authorizes it
DOnly a violation if the amount exceeds $1,000
Explanation
Using client trust funds (earnest money, security deposits) for any purpose other than their intended use is conversion of funds and a serious violation of IREC trust accounting rules, regardless of the amount.
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