Under Washington law, what is the term used to describe the illegal act of mixing a client's earnest money with the broker's own personal or business funds?
Correct Answer
B) Commingling
Commingling is the term used in Washington real estate law (RCW 18.85) to describe the illegal mixing of client funds — such as earnest money — with a broker's personal or business funds. Washington DOL rules strictly prohibit commingling and require that all client funds be maintained in a separate, designated trust account. Commingling is a grounds for disciplinary action, including license suspension or revocation.
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Related Topics & Key Terms
Key Terms:
Related Concepts
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
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