Kevin is a designated broker in Arkansas who manages a trust account for his brokerage. He inadvertently deposits a personal check into the trust account to cover a shortfall caused by a clerical error. Under AREC rules governing trust accounts, Kevin's action is best described as:
Correct Answer
B) Commingling of funds, which is prohibited under AREC trust account rules regardless of intent.
AREC rules strictly prohibit the commingling of personal or brokerage operating funds with client funds held in a trust account. Depositing a personal check into the trust account—regardless of the reason or intent—constitutes commingling, which is a serious violation of AREC trust account rules and can result in disciplinary action including license suspension or revocation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
FREC has the authority to impose fines and other disciplinary actions on licensees who violate real estate laws and rules.
A group boycott is an illegal antitrust practice in which two or more competing real estate businesses agree to refuse to work with a specific person, company, or entity in order to harm that party's ability to compete.
In real estate, the distinction between an independent contractor and an employee determines tax treatment, liability, and the level of control a broker may exercise over the agent's daily activities. Most real estate agents operate as independent contractors.
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