What Is Commingling?
Commingling is depositing a client's trust or escrow funds into the same account as an agent's, broker's, or company's own operating funds, instead of keeping them in a separate trust account.
Why it matters
Most states prohibit commingling outright, since mixed accounts make it harder to prove client funds were never touched — it's treated as a red flag even when no money is actually misused.
Conversion vs. Commingling (of Funds)
Improperly mixing a client's trust or escrow funds with an agent's or company's own operating funds — a violation even if every dollar is still accounted for.
Actually using a client's trust or escrow funds for a purpose other than what they were entrusted for — a more serious violation than commingling.
Commingling is a bookkeeping/account violation; conversion is misusing the money itself. Both are serious licensing violations, but conversion is treated far more severely.
Related Terms
More Commercial & Appraisal Terms
This definition is provided for general educational purposes and is not financial, legal, tax, or real estate advice. Verify important decisions with appropriately qualified professionals.
Understand a property's costs and risks before you make an offer
Use the free calculator for your own numbers, or analyze a specific home before you commit.
Or analyze a specific property: Essential Property Analysis, $19 · Property Decision Analysis, $49 · Professional Property Analysis, $99. You choose the depth before you pay.