Broker Kevin in Lansing maintains a trust account at a local bank. A long-time client gives Kevin a $500 personal gift check as a thank-you for excellent service, separate from any transaction. Kevin deposits this gift check into his trust account by mistake. Which of the following best describes this situation?
Correct Answer
B) Kevin has committed commingling by depositing non-trust funds into the trust account
Commingling occurs when funds that do not belong in a trust account are deposited into it, as well as when trust funds are mixed with personal or operating funds. By depositing a personal gift check — which is not client transaction money — into the trust account, Kevin has commingled non-trust funds with trust funds, violating the requirement under MCL 339.2512 to keep trust accounts containing only client funds related to real estate transactions.
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Related Topics & Key Terms
Key Terms:
Related Concepts
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.
Florida real estate licenses must be renewed biennially, and sales associates have specific post-license education requirements for their first renewal.
License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
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