Salesperson Dana receives a $5,000 earnest money deposit from a buyer and deposits the funds into her personal checking account, intending to transfer them to her broker's trust account the following week. Under Michigan law, which violation has Dana most clearly committed?
Correct Answer
B) Commingling of trust funds with personal funds
Under MCL 339.2512 and LARA-BPL rules, depositing client funds (earnest money) into a personal account constitutes commingling — mixing client trust funds with personal or operating funds. This is a disciplinary violation regardless of intent or whether the funds are ultimately transferred correctly. The broker, not the salesperson, is responsible for maintaining a separate trust account, but the salesperson's act of depositing into a personal account is itself a commingling violation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
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.
More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
In Wyoming real estate practice, a first-time salesperson applicant completes coursework. What should the licensee remember?
A Wyoming licensee is reviewing an out-of-state salesperson applicant prepares for testing. What is the best answer?
In Wyoming real estate practice, a salesperson applicant age is reviewed. What should the licensee remember?
A responsible broker in Wyoming asks about a nonresident applicant provides home-state evidence. Which answer follows Wyoming law?
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- → For the Wyoming salesperson state portion, a first-time Wyoming salesperson applicant starts the application process. Which statement is correct?
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- → For the Wyoming salesperson state portion, a licensee asks how long Wyoming renewal periods are. Which statement is correct?
- → Which Wyoming rule applies when a licensee does not timely submit the complete renewal application, proof of CE, and renewal fees?
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