Conversion
Using money held in trust for others for the broker's own benefit, a serious TRELA violation that can carry criminal penalties.
Conversion is taking trust money that belongs to others and using it for personal or business purposes. A broker who spends a buyer's earnest money has converted those funds. Conversion goes beyond commingling because the money is actually used, not just mixed.
Conversion is among the most serious violations a license holder can commit. It can result in license revocation and criminal charges in addition to administrative penalties under TRELA.
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- Commingling
Mixing money held in trust for others with a broker's personal or business funds, which is a TRELA violation.
- Escrow / Trust Account
A separate account where money belonging to others is held apart from a broker's own funds, often at the title company in a Texas sale.
- Earnest Money
A good-faith deposit a buyer puts down to show serious intent, held in escrow and applied at closing.
This definition is Texas real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.