What is considered "co-mingling" in real estate practice?

Co-mingling in real estate practice specifically refers to the mixing of client funds with personal or operating funds. This practice is highly discouraged and often illegal, as it can lead to issues such as mismanagement of client funds, potential theft or fraud, and violations of regulatory requirements. Real estate professionals have a fiduciary duty to safeguard client funds and avoid any practices that could compromise that responsibility.

Keeping personal and business accounts separate is, in fact, the opposite of co-mingling and is a recommended practice. Using trust funds for business expenses constitutes a misuse of those funds and directly connects to co-mingling, but co-mingling specifically highlights the blending of client funds with personal funds. Collecting commission without a contract is a different issue related to proper agreements and doesn't fall under the definition of co-mingling. Thus, the correct identification of co-mingling as the mixing of client funds with personal or operating funds emphasizes the importance of maintaining clear financial boundaries in real estate practice.