What does "commingling funds" refer to in real estate violations?

The term "commingling funds" primarily refers to the mixing of personal funds with funds that are intended for a real estate transaction. In the context of real estate, this violation can have serious implications, as it can compromise the integrity of financial transactions and violate fiduciary duties owed to clients.

When a real estate professional combines their own money with client funds, they create a risk of mismanagement or loss of those funds, leading to potential financial harm to clients. This practice undermines transparency and accountability, which are foundational principles in real estate transactions.

While options that involve taking funds from one listing to cover another or using client funds for personal expenses may also be considered unethical or illegal practices, they do not specifically fall under the standard definition of commingling. Commingling is specifically about the improper mixing of funds, hence the focus on personal versus transaction-related money as the primary definition.