Commingling: A delicate act in the real estate world

The real estate field is full of terms and regulations that professionals must know thoroughly to ensure fair and transparent operations. One of those terms is “commingling”, a concept that, although it may seem simple on the surface, has a number of important details to consider. Let's unravel what exactly it is and what circumstances are excluded from this term.

What is Commingling?

According to the formal definition (10176(e)), “commingling” refers to the commingling of the broker's own money or property with the money or property of third parties that is received and maintained by the broker. This act can have serious legal and ethical implications, so it is essential to avoid any situation that could be construed as improper commingling of funds.

Exceptions to the Rule

Although the definition of “commingling” may seem clear, there are certain circumstances that are not considered improper commingling of funds:

  1. Account Maintenance Funds: If funds are deposited that do not exceed $200 for the purpose of paying service charges or fees imposed to maintain the account, this is not considered “commingling”.
  2. Mixed Funds: Sometimes there may be funds that are partially owned by the broker's principal and partially owned by the broker. If it is not practical to keep these funds separate, they can be deposited together. However, the broker's portion must be withdrawn no later than 25 days after the deposit. It is essential that there are no disputes over the broker's share, and if there are, they must be resolved before withdrawal of funds.
  3. Broker Funds in Permitted Activities: If the broker deposits own funds in connection with permitted activities, such as making and collecting payments in servicing a loan, this is not seen as a violation.


“Commingling” is a term that all real estate professionals must thoroughly understand to avoid potential legal complications. While there are situations that are excluded from this definition, it is essential to always operate with transparency and ethics, ensuring that client funds are secure and handled correctly.

Legal and Tax Disclaimer

Please be advised that the content presented in this blog is for informational purposes only and should not be construed as legal or tax advice. The articles and information provided here are written from the perspective of a real estate agent affiliated with Keller Williams, and do not represent legal or tax counsel.

As the author, I am a licensed real estate professional under Keller Williams, holding Brokerage DRE License Number: #02197031. However, it is important to note that my expertise is in the field of real estate, and not in legal or tax matters. The insights and opinions shared on this blog are based on my experiences and knowledge in the real estate industry and should be treated as general guidance rather than definitive legal or tax advice.

For specific legal or tax concerns relating to any real estate transactions or investments, readers are strongly encouraged to consult with a qualified attorney or tax advisor who can provide tailored advice based on your individual circumstances and the latest legal and regulatory requirements.

The information on this blog is provided "as is" without warranty of any kind, and I, along with Keller Williams and its affiliates, disclaim all liability for any loss, damage, or misunderstanding arising from reliance on the information contained herein.

Related news

Leave a Comment

Your email address will not be published. Required fields are marked *

Get your FREE guide

Enter your email so we can send you your guide

Secure your space in our webinar.

Don't worry if you can't attend: we'll send you the recording!