Which practice is NOT permitted in relation to escrow funds?

When managing escrow funds, the safeguarding of these funds is of utmost importance, and certain practices are strictly prohibited to ensure transparency and protect clients' interests. Commingling escrow funds with personal funds is one of those prohibited practices because it can lead to mismanagement and misrepresentation of the actual funds belonging to clients. Commingling creates a situation where an agent could unintentionally use client funds for personal expenses or office costs, jeopardizing not only the agent’s standing but also the trust of the clients.

Proper practices include keeping separate accounts for client funds, which ensures that the clients' money is not intermingled with personal or business finances and is readily available when needed. Using escrow funds solely for their intended purpose—such as paying for a property or a related transaction—is another key aspect of handling these funds correctly. Providing receipts for all transactions ensures transparency and an accurate record of where the funds are allocated, further protecting both the agent and the client.

Maintaining these best practices helps to build trust in the real estate profession and ensures compliance with legal and ethical standards.