Conversion In Real Estate
The legal definition of conversion is the act of using property or funds with which one has been entrusted for purposes other than those for which the property was intended to be used by those who entrusted it.
Conversion Real Estate Meaning
The meaning of conversion in real estate is multifaceted. Real estate conversion can mean different things, and occur under a number of different circumstances. The most common type of real estate conversion is when a real estate agent is entrusted with funds to be deposited in a trust for use in repairing or improving a property. If the agent withdraws funds from the trust to make personal purchases, he has committed the crime of real estate conversion.
At first glance, this can seem fairly innocuous. As long as the real estate agent replaces the money he “borrowed” from the account with his own money, it should be fine, right? Unfortunately, this is not the case. If the realtor puts his own money back into the account, he has actually committed another serious offense: commingling.
Conversion Real Estate Example
Another example of real estate conversion might be the removal of property from a home listed on the market. If an agent removes furniture, decorations, appliances or any other property from the home for his or her own personal use, he has committed conversion.
In general, real estate conversion can be avoided by carefully keeping all client accounts separate from personal or corporate accounts, and always using the funds in client accounts for their stated purpose.
Consequences of Committing Real Estate Conversion
The consequences for committing conversion or commingling can be severe and life-altering. Both offenses are ethical and legal violations of the trust shared between a real estate agent and their client. Committing conversion or commingling can constitute grounds for the revocation of your realtors permit at the very least.
In many jurisdictions, commingling and conversion also bear heavy legal penalties ranging from large fines to jail time. With this in mind, it is crucial to avoid committing either of these infractions at all costs.
Popular Real Estate Terms
Standard days when an organization is open and conducts business. Business days exclude weekends and holidays. ...
Short-term leases are leases that run its completion in a faster time than regular ones.In real estate, short term-leases usually refer to temporary housing; that is: rent.The length of a ...
Act occurring after the fact. ...
Through the master plan definition, we can understand it’s a plan describing both through narrative and maps the overall land use of a designated urban area. It includes both present ...
Also called an installment sales contract or contract foe feed. A type of creative financing in real estate allowing the seller to finance a buyer by allowing him or her to make a down ...
Expenditures paid for in advance such as property insurance, rent, and interest. Prepaid expenses are not used or consumed until later. They are typically of a recurring nature. ...
An acre is defined as a land unit that is commonly used in the US customary and imperial systems of 66 by 660 feet (one chain by one furlong). An acre is a measure of volume used in many ...
The method for splitting a commission between a registered real estate sales person and the sponsoring real estate broker, and between the listing broker and the selling broker, or any ...
So, after you discovered what a Home Appraisal is, you want to know more about the person responsible for it: the famous Appraiser.Good for you!The Appraiser is a certified individual ...
Comments for Conversion In Real Estate
Who in the state, should be contacted if a condo HOA committed Conversion & Commingling?
Oct 18, 2020 16:47:06Hey Sharon,
The most reasonable thing to do if there is a complaint against an HOA is to address the issue with the companies management. That way, you can give them a chance to fix the problem. If the problem persists, some states have an agency that collects complaints and investigate them, or you could file a lawsuit against the management company if the claim is valid and legal.
Oct 23, 2020 10:10:39What's the difference between 'conversion' and 'commingling'?
Jun 10, 2019 23:12:52Hello, Jack! First of all, you have to know that both are illegal. When we speak about conversion in real estate, we say that a real estate agent or broker used his clients' money to cover his expenses. He/She changed the destination of the funds. When a real estate agent is accused of commingling of funds, it means that he/she didn't keep client's money into a separate account, but mixed his/her own funds with earnest money, for example. We hope you find this answer useful. Please continue to explore our glossary for more definitions of real estate terms.
Jun 11, 2019 09:43:32Have a question or comment?
We're here to help.