A broker who uses client funds held in escrow for personal expenses has committed which of the following violations?
Correct Answer
B) Conversion — unauthorized use of client trust funds for personal purposes
Conversion is the unauthorized use of client funds held in trust for personal or business purposes. It is distinct from commingling, which involves improperly mixing client funds with the broker's own funds without necessarily spending them. In Rhode Island, conversion of escrow or trust funds is a serious violation of the RI Real Estate Licensing Act and can result in license suspension or revocation, civil liability, and criminal prosecution.
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