Commingling is improper mixing; conversion is unauthorized appropriation or use. These are different questions about the same money, so one sequence can involve both. The California Department of Real Estate glossary provides the general vocabulary; Florida's own escrow requirements control a Florida brokerage.

Worked example: A buyer gives a broker a $7,500 earnest-money deposit. The broker puts it in an operating account already containing $2,000 of brokerage money. That is the mixing problem. The broker then uses $900 of the buyer's money to pay office rent. That adds the unauthorized-use problem. A plan to replace the $900 after the next commission does not turn the deposit into a permitted short-term loan.

Now change the facts: the deposit reaches a proper escrow account, but the broker withdraws $900 from it for that same office bill without authorization. Conversion can occur even though the funds were initially deposited correctly. Conversely, an improper mixed account need not have an immediate shortage for commingling to be an issue.

Florida qualification: Do not memorize an absolute rule that an escrow account can never contain brokerage money. Section 475.25(1)(k) permits limited personal or brokerage funds: up to $1,000 in a sales escrow account and $5,000 in a property-management escrow account. That allowance does not authorize spending client deposits.

The exam pitfall is treating repayment as proof that nothing improper happened. Identify where the funds went and whose purposes they served. For an actual discrepancy, involve the responsible broker and qualified advisers promptly.

Continue with the Chapter 6 escrow guide and Chapter 6 practice questions.