New Jersey Real Estate Practice Exam Free Practice Question
A broker received a birthday check from a client. The broker decided to put it in the escrow account because it was from a client. This is
Correct Answer: B
Rationale: Placing a birthday check from a client into an escrow account constitutes commingling, which is the improper mixing of personal and client funds. This practice violates ethical standards, as escrow accounts should only contain funds directly related to a transaction.
Option A, conversion, refers to the unauthorized use of client funds for personal gain, which is not applicable here.
Option C suggests that using a check from a business account is acceptable, but the source of funds does not change the nature of commingling.
Option D implies that a recent transaction justifies the action, but such a rationale does not align with proper escrow account management.
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