What is the illegal act of using client money as if it belonged to the licensee called?

The act of using client money as if it belonged to the licensee is referred to as conversion. This term describes the unauthorized assumption of ownership over another person's property, in this case, using clients’ funds for the licensee's personal use. Conversion occurs when the licensee takes or uses these funds without the client's consent, effectively depriving the rightful owner of their assets.

This concept is critical in real estate practice, as it highlights the fiduciary duty agents have to handle client funds responsibly and ethically. Agents must maintain a clear boundary between their finances and those of their clients to uphold trust and legal standards. Understanding conversion is essential for maintaining compliance with legal norms and ethical practices in real estate transactions.