Pennsylvania License Law
Which of the following best describes 'commingling' of funds as prohibited by RELRA?
ADepositing multiple clients' earnest money deposits into the same escrow account
BMixing client funds (earnest money, rents, security deposits) with a licensee's personal or operating funds✓ Correct
CAccepting commissions from both the buyer and seller in the same transaction with proper disclosure
DHolding client funds for more than 30 days before settlement
Explanation
Commingling is the illegal mixing of client funds — earnest money deposits, rents, or security deposits held in trust — with the licensee's personal funds or the brokerage's operating funds. RELRA strictly prohibits commingling because it endangers client funds and makes it difficult to verify that client money is properly accounted for. Multiple clients' funds may be held in the same trust account (common in busy brokerages) as long as each client's balance is separately tracked and recorded.
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