What does "commingling" mean in the context of real estate?

In the context of real estate, "commingling" refers specifically to the inappropriate practice of mixing client funds with personal or business funds. This is a violation of ethical and legal standards in property management and real estate transactions.

When a real estate broker or agent accepts funds from clients—such as earnest money deposits or rental payments—those funds must be kept separate to ensure they are protected and handled properly. Commingling occurs when these funds are not kept in a designated account and are instead mixed with the broker's or agent's personal finances or general business accounts, creating a risk of mismanagement or loss.

This legal standard exists to protect the interests of clients and maintain the integrity of financial transactions within real estate. Therefore, understanding the implications of commingling is crucial for real estate professionals to comply with regulations and uphold their fiduciary responsibilities.