agency
commingling
Commingling is the improper mixing of client or customer funds, such as earnest money or security deposits, with the broker's own personal or business funds. Brokers must keep others' money in a separate trust or escrow account. Commingling is a violation of license law even if no money is lost. Using those funds for the broker's own purposes is a more serious offense called conversion.
- Exam tip
- Commingling is mixing funds; conversion is using them. Commingling is a violation even when every dollar is accounted for.
- Example
- A broker deposits a buyer's $5,000 earnest money check into the brokerage's operating account, which is commingling.
Related terms & state variants
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Last verified: 2026-10-23