Nevada Timeshare License Practice Exam 2025 – Comprehensive Prep Guide

The scenario described, where a developer uses a purchaser's deposit for personal expenses, falls under the definition of conversion. Conversion refers to the unauthorized use of someone else's property for one's own purposes. In this case, the developer has taken funds that belong to the purchaser—specifically, the deposit intended for a timeshare—and has used them for personal gain, such as buying snacks. This act constitutes conversion because it involves the use of another person’s property without consent and for an improper purpose.

Understanding this term is important in the context of real estate and timeshare transactions, as it highlights the legal and ethical standards that developers must adhere to when handling funds. The act of conversion not only violates the trust between the developer and the purchaser but can also lead to legal repercussions.

Other terms like embezzlement and commingling represent different kinds of financial misconduct but do not specifically capture the essence of unauthorized use for personal expenses in this context. Embezzlement involves misappropriating funds that one has been entrusted to manage, while commingling refers to mixing personal funds with client or company funds, which, while also inappropriate, does not directly involve the unauthorized use of those funds for personal purchases. Fraud, meanwhile, involves deception for personal gain,