Question

For which actions may the public seek funds from the Real Estate Recovery Fund?

a) An agent fails to advertise a home as agreed to in the listing contract.
b) An agent doesn't catch an error on the settlement statement, costing their client $700.
c) A broker fails to discover lead-based paint in the home.
d) A broker cashes an earnest money check, using the money for past-due office rent.

Answer 1

The Real Estate Recovery Fund provides compensation to the public for financial losses caused by the actions of real estate agents or brokers. The public can seek funds from the fund for actions such as failing to advertise a home as agreed or not catching errors on settlement statements. However, using the funds for personal expenses is not allowed.

Step-by-step explanation:

The Real Estate Recovery Fund is a fund set up by some states to provide compensation to the public in cases where they suffer financial losses due to the actions of real estate agents or brokers. The actions for which the public may seek funds from the Real Estate Recovery Fund include:

1. An agent failing to advertise a home as agreed to in the listing contract.
2. An agent not catching an error on the settlement statement, resulting in a financial loss for the client.
3. A broker failing to discover lead-based paint in the home.

However, it should be noted that using funds from the Real Estate Recovery Fund for personal expenses, such as cashing an earnest money check for past-due office rent, is not a valid reason for seeking funds from the fund.