Why is commingling illegal in real estate? Like in the legal profession, licensed real estate brokers, agents and other professionals who hold deposits for clients are strictly prohibited from commingling their clients' funds with their own, because it may involve embezzlement and it's difficult to detect.

What is wrong with commingling funds?

If you commingle funds, you could lose the liability protection due to what is known as “piercing the corporate veil”. Having your “veil pierced” sounds like a bad thing. ... This means that you didn't keep up the necessary formalities so your LLC or corporation wasn't a separate legal entity.

What is illegal commingling?

Commingling can also refer to the illegal act of combining client money with personal money without contractual permission to do so.