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Under Connecticut real estate license law, which of the following best describes the prohibited practice of 'commingling'?

Correct Answer

A) Depositing client funds into an account that also holds the broker's personal or operating funds

Commingling, as prohibited under Connecticut license law (CGS § 20-324e and CREC regulations), occurs when a broker mixes client funds — such as earnest money or security deposits — with the broker's own personal or business operating funds. Each client's funds must be kept separate from the broker's own money at all times.

Answer Options
A
Depositing client funds into an account that also holds the broker's personal or operating funds
B
Maintaining more than one trust account at the same financial institution
C
Depositing earnest money before the purchase contract has been signed by all parties
D
Transferring trust funds between two different client escrow sub-accounts

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Related Topics & Key Terms

Key Terms:

comminglingtrust_accountprohibited_practicescgs_20_324e

Related Concepts

A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.

A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.

Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.

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