Virginia Real Estate License Law Practice Test

In Virginia real estate, commingling and conversion are illegal activities because they violate the fiduciary duties that a real estate agent or broker has toward their clients. Commingling refers to mixing client funds with personal or business funds, which can lead to a lack of transparency and potential misuse of client money. Conversion involves taking client funds for personal use or failing to maintain them in a designated trust account, effectively misappropriating those funds.

Maintaining proper financial separation is crucial for trust and legality in real estate transactions. Agents and brokers must always handle client funds with the utmost care and integrity, ensuring that they are only used for their intended purposes, such as earnest money deposits in a real estate transaction or other agreed-upon expenses.

The other activities mentioned, such as harvesting and hoarding, consignment and collection, or red listing and lost leader, do not have the same legal implications in the context of real estate transactions as commingling and conversion do. Therefore, these do not represent illegal activities under Virginia real estate law.