Real Estate Recovery Fund Flashcards
What is the purpose of the Real Estate Recovery Fund?
reimburses consumers who have been financially injured by a licensee
When is the Real Estate Recovery Fund used?
As a last resort, if debt was not successfully collected
It serves as a safety net for consumers after other collection efforts have failed.
What are the requirements of the licensee in order to access the Real Estate Recovery Fund? (List 3)
- licensee was not a buyer, seller, landlord, or tenant
- licensee was only acting in the capacity of a real estate licensee
- licensee held an active license at the time of the alleged act
What are the requirements of the claimant to access the Real Estate Recovery Fund? (List 3)
- They filed a civil suit and obtained a final judgment against the licensee
- They attempted to collect on the judgment
- The claimant needs to execute an affidavit that states the final judgment is not on appeal
- The claimant cannot be a spouse of the offending licensee
The requirement to attempt to collect on the judgment is waived if the licensee filed bankruptcy.
How soon must the claim be filed?
Within 2 years of the alleged act
For the Real Estate Recovery Fund, the claim is limited to how much per transaction?
$50,000 (or the unsatisfied portion of a judgment claim, whichever is less)
Is the fund limit dependent on how many claimants there are?
no
What is the maximum you can claim against one licensee?
$150,000
When are fees collected from licensees for the Real Estate Recovery Fund?
When the fund drops below $500k
When does the Real Estate Recovery Fund stop collecting fees from licensees?
Once the fund exceeds $1 million
The recovery fund will reimburse a claimant for ____ damages only.
compensatory
This means only direct financial losses are covered, not other forms of damages.
Does the recovery fund reimburse attorney’s fees, court costs, interest, treble damages, or punitive damages?
no
This limitation focuses the fund on compensatory damages only.
What is the mandatory suspension for the recovery fund?
The license is automatically suspended upon payment from the fund until the fund is reimbursed (including interest)
This policy ensures accountability from the licensee.
A broker who complies with an EDO and is later sued may be reimbursed from the fund _____ ________
without penalty
EDO stands for Earnings Disclosure Order.
A broker who complies with an EDO may be reimbursed the ___, ___, and ________
amount of the EDO, attorney fees, and court costs
If the plaintiff prevails in court, the fund will reimburse the plaintiff’s ___ and ____
attorney fees & court costs
This ensures that the plaintiff does not bear the financial burden of legal fees if they win the case.
