What does commingling of funds involve?

Commingling of funds involves the improper mixing of client funds with personal accounts, which is a violation of ethical practices in real estate transactions. Real estate professionals are required to maintain clear boundaries between their personal finances and client funds to ensure transparency and to protect clients' interests.

When a broker or agent commingles funds, it can lead to mismanagement of client money and can potentially result in legal repercussions, as it undermines the trust that clients place in them. Maintaining separate accounts for client funds helps to ensure that those funds are used solely for their intended purpose, such as fulfilling obligations pertaining to real estate transactions, and keeps them secure and properly accounted for. This practice is essential for maintaining professional integrity and compliance with regulatory standards.