What is the consequence of commingling client funds with personal funds?

Commingling client funds with personal funds can lead to possible legal action because it violates ethical and legal standards set by real estate regulations. Real estate professionals are required to keep client funds—such as earnest money deposits—separate from their own personal funds to ensure transparency and accountability. When these funds are mixed, it creates a lack of trust and can be perceived as fraudulent activity, leading to various consequences, including potential lawsuits, loss of license, and disciplinary actions from regulatory bodies. Maintaining clear boundaries between client funds and personal finances is crucial in establishing professional integrity and protecting the interests of clients.