What is the typical consequence for a licensee who commingles client funds?

• A. Disciplinary action by the CREC, including possible suspension or revocation and civil penalties.
• B. A simple warning with no penalties.
• C. Criminal charges prosecuted by the district attorney automatically.
• D. A fine by the MLS board only.

Answer: (A)

When a licensee mixes client funds with personal or business money, they break the fiduciary duty to keep those funds in a trust/escrow account and separate from their own funds. This act is a serious violation of real estate practice rules.

The typical consequence is disciplinary action by the Colorado Real Estate Commission. The Commission can suspend or revoke a license and impose civil penalties for mishandling trust funds. Additional remedies can include restitution, required education, or other sanctions as determined by the Commission. Criminal charges can be pursued by the district attorney if the conduct meets criminal thresholds, but they are not automatic simply because funds were commingled. Fines or actions by an MLS board alone do not address this breach.