Practice and Disclosures, 25% of the examination
Real Estate Recovery Fund
A fund of last resort paying consumers who hold an uncollectable judgment against a licensee for fraud, misrepresentation, deceit or conversion of trust funds.
The claimant must first obtain a final civil judgment or a criminal restitution order and show that reasonable collection efforts failed. When the Fund pays, the licensee's licence is automatically suspended until the Fund is reimbursed in full with interest. There are statutory caps per transaction and per licensee.
See also
See it in a question
One question from Practice and Disclosures, so the term lands in the context the exam uses it in.
A salesperson receives a $5,000 good-faith deposit check made payable to the seller. What must happen to it?
Written to DRE's published topic list. Not a real examination question, since reproducing those is a misdemeanour under B&P Code section 123.