Marcus is the designated broker of Summit Real Estate in Washington. He occasionally transfers small amounts from the firm's trust account into the firm's operating account to cover payroll when cash flow is tight, and then replenishes the trust account the following week. Which violation has Marcus committed?
Correct Answer
B) Commingling, because he mixed client funds with firm operating funds
Marcus has committed commingling by mixing client trust funds with the firm's operating funds. Under RCW 18.85.361 and WAC 308-124D, trust funds must be kept strictly separate from the firm's general business funds at all times. The fact that he replenished the account does not cure the violation — commingling occurs the moment the funds are mixed, regardless of intent or subsequent replenishment.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Brokers in Florida have strict responsibilities for managing escrow accounts, including monthly reconciliation and proper handling of trust funds.
FREC has the authority to impose fines and other disciplinary actions on licensees who violate real estate laws and rules.
A group boycott is an illegal antitrust practice in which two or more competing real estate businesses agree to refuse to work with a specific person, company, or entity in order to harm that party's ability to compete.
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