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Commingling

Commingling is mixing client funds or property with a broker's own funds or property.

Direct answer

What does commingling mean?

Commingling is mixing client funds or property with a broker's own funds or property.

Exam cue: Under 19 NYCRR 175.1, a broker must keep client money in a separate special account and deposit it within three business days. Commingling is the improper mixing itself.

What does it look like in a question?

Example

A broker deposits an earnest money check into the brokerage operating account.

Common exam trap

What should you not confuse it with?

Conversion is unauthorized use of another person's funds. It can occur after commingling, but the terms are not identical.

Related license law terms

Article 12-AArticle 12-A is the part of New York Real Property Law that regulates real estate brokers and salespersons.Article 78 proceedingAn Article 78 proceeding is a court proceeding used to seek review of certain actions or determinations by a New York state or local body.Blind advertisementA blind advertisement is a real estate advertisement that fails to identify the broker or brokerage as required by New York advertising rules.ConversionConversion is the wrongful exercise of control over another person's money or property that seriously interferes with that person's rights.EscrowEscrow is an arrangement in which money, documents or property are held by a neutral party under stated conditions until a transaction event occurs.Net listingA net listing is a listing arrangement that sets an amount the owner will receive and lets the broker keep any excess as compensation.
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