David, a Washington broker, receives a $10,000 earnest money deposit from a buyer. Instead of depositing it into the firm's trust account, David deposits it into his personal checking account, intending to transfer it before closing. The closing is delayed and the funds remain in David's personal account for three weeks. Under Washington law, David's conduct is best described as:
Correct Answer
A) Commingling, because he mixed client funds with his personal funds
Under RCW 18.85, commingling occurs when a licensee mixes client funds (such as earnest money deposits) with personal or business operating funds. David's deposit of the earnest money into his personal checking account is a textbook example of commingling, which is a serious violation and a ground for license suspension or revocation regardless of intent.
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Related Topics & Key Terms
Key Terms:
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.
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?
- → A responsible broker in Wyoming asks about a first-time salesperson applicant prepares for Wyoming-specific licensing. Which answer follows Wyoming law?
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- → For the Wyoming salesperson state portion, a licensee asks how long Wyoming renewal periods are. Which statement is correct?
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