Which term describes a form of conversion when a broker cannot produce funds or property entrusted to them?

• A. Failure to account
• B. Breach of Trust
• C. Concealment
• D. Aggravating circumstances

Answer: (A)

At the heart of this question is how a broker handles funds or property entrusted to them. When someone places money or property in a broker’s care, the broker has a fiduciary duty to keep accurate records and to deliver those assets when due. If the broker cannot produce the funds or property—meaning they cannot account for what was entrusted to them—that is a form of conversion. In real estate practice, this specific failure to show or deliver assets is described as a failure to account. It directly represents misappropriation or improper handling of trust assets, which is why it’s the best descriptor for this situation.

Concealment wouldn’t fit because it involves hiding something rather than the failure to produce assets. Breach of trust is broader, referring to failing to meet fiduciary duties in general, but the question targets the precise term that describes not being able to produce entrusted funds or property, which is failure to account. Aggravating circumstances aren’t a type of misconduct themselves; they’re factors that might worsen a case, not the act described.