Final answer:
The Texas Real Estate Recovery Fund is funded by real estate license fees, designed to compensate individuals harmed by malpractice of a licensed real estate agent or broker.
Step-by-step explanation:
The Texas Real Estate Recovery Fund is funded by real estate license fees. This fund is established as a part of the regulatory framework to protect consumers. In the event of monetary damages due to the wrongful actions of a licensed real estate agent or broker, this fund can be tapped to make restitution to the affected parties.
It is not funded by general revenue funds, taxes, or the public. The Recovery Fund ensures that victims of real estate malpractice have a source of compensation even if the responsible agent or broker cannot cover the damages themselves.