Colorado broker Tom maintains a trust account for his brokerage. At the end of the month, his trust account ledger shows $47,500 in client funds. However, his bank statement shows a balance of $47,650. Tom discovers that $150 of his own money was deposited into the trust account by mistake. Under Colorado CREC rules, this situation is best described as which of the following?
Correct Answer
B) Commingling, because personal funds are mixed with client trust funds in the same account
Commingling occurs when a broker mixes personal or business funds with client trust funds in the same account. Under CREC rules and C.R.S. § 12-10-217, placing any amount of the broker's own money into the trust account — even accidentally — constitutes commingling, which is a violation of Colorado license law and grounds for disciplinary action.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
Antitrust violations in real estate occur when competing brokerages or agents engage in practices that restrain trade, reduce competition, or harm consumers through collusion. These violations are governed by the Sherman Antitrust Act and can result in severe penalties.
Broker supervision is the legal obligation of a designated or managing broker to oversee and be accountable for the real estate activities of all salespersons and associate brokers operating under their license.
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