What term refers to the illegal act of mixing client or customer funds with a licensee's personal funds?

The term that describes the illegal act of mixing client or customer funds with a licensee's personal funds is commingling. In the context of real estate and finance, commingling violates fiduciary duties and can lead to severe consequences for the licensee. Maintaining a clear separation between client funds and personal finances is crucial in order to uphold the trust and integrity required in professional dealings.

Commingling is considered improper because it can lead to financial discrepancies and potential loss for clients, which undermines their trust in the licensee. The legal and ethical obligations in many professions require that client funds be placed in a separate trust or escrow account, ensuring their safety and proper handling.

In contrast, the other terms do not pertain to the mixing of funds. Common law refers to legal principles developed through court decisions rather than statutes. Commission typically refers to the fee earned by a broker or agent for services rendered, and community property is a legal concept related to property ownership in marriage rather than the handling of client funds. Understanding these distinctions is key to grasping the ethical standards expected in the real estate profession.