Misappropriation of Funds

If a broker messes with this money, they lose their license (and maybe go to jail). There are three main ways to break the law here:Commingling: This is "mixing" money. You cannot put your personal money or business operating money into the escrow account. You can't mix "Rent Money" with "My Lunch Money."Conversion: This is stealing. If a broker takes money from the escrow account to pay for their car or office rent, that is conversion.Failure to Account: If a client asks, "Where is my money?" and you can't produce it or explain where it is, you are guilty of failure to account.There is one exception. Banks charge service fees. If the account is empty, the bank might close it. Therefore, a broker is allowed to keep a small amount of their own personal money in the account just to cover bank fees:Sales Escrow Account: Up to $1,000 of personal funds.Property Management Escrow: Up to $5,000 of personal funds.