Real Estate Recovery Fund Flashcards

Real Estate Recovery Fund Flashcards The three levels of funding as related to the Recovery Fund

are as follows:

- $450,000: the minimum level of funding after the payment

of all claims and expenses on June 30 of odd-numbered

years- $600,000: the "optimum" level to be maintained in

the Fund- $750,000 max level of funding The Fund was established in 1986. To provide the money for the Fund, each real estate licensee who renewed their license, or was first issued a license, from 1986 to 1988, paid an additional $15.00 over and above the license renewal fee, to go into the Recovery Fund. The goal was to create a fund of about

$600,000

On Dec 31 and June 30 of each year, the Real Estate Commission shall identity the claim that have been ordered to be paid in the prior six months, and pay them within 15 days. It must be verified that there was no collusion between the parties, and that the creditor pursued all real and personal property of the licensee in order to satisfy the judgement The Real Estate Recovery Fund became operational on January 1, 1988. It is administered by the Real Estate Commission The Treasurer of the state of Indiana oversees the money in the Fund. Any money not currently needed to meet the obligations of the Fund shall be invested just as nay other public funds may be invested If an aggrieved member of the public obtains a judgement in any court to recover damages from an act of embezzlement of money or property, or an act that results in actual cash loss to that person, they may seek relief from the Recovery Fund The Commission may utilize theOffice of the Attorney General for assistance in administering the duties regarding the Recovery Fund.Expenses incurred shall be paid from the Recovery Fund There are limitations places on the amount of money that may be collected, regardless of the total amount of the judgment. The amount that may be paid from the Recovery Fund may not exceed $20,000 per judgement. There is also an aggregate lifetime limit of $50,000 with respect to any one licensee If the amount in the Fund exceeds $750,000 due to interest that accrues on money that is invested, then the excess will be deposited in the general fund of the state No money may be appropriated from the general fund of the state for the payment of any claims or expenses incurred by the Recovery Fund Any interest that accrues from investments shall be deposited in the Fund, except as noted later Interest that has been earned by the Recovery Fund may

be spend on the following:

• Information concerning the Commission's activities and

administrative rulings- Other educational information concerning the real estate industry- Expenses related to the continuing education program If the licensee is associate with a broker company, the license of the designated managing broker shall also be suspended

The purpose of the Fund is toprovide a level of protection to members of the general public who may be financially damaged by a real estate licensee in a real estate transaction for which a license is required The licensee is not eligible to be licensed again untilthe licensee has repaid the amount in full, with interest, which will accrue at the rate of 12% per year To do so, they must firsttake all legal steps necessary to enforce the judgement.Within one year after exhausting all remedies to collect on the judgement, the individual must file a verified application in the curt which issued the judgment, for payment from the Recovery Fund. Court costs may be added to the amount of loss In order to qualify for payment from the Recovery Fund, the transaction in question must have occurred when the licensee was licensed, for which a license was required, and occurred after December 31, 1987 If the payment of two or more valid claims would exceed the $50,000 limit, then any amounts paid will be prorated based not eh amount of each claim as a percentage of the total If the Fund drops below $450,000 on the date referenced, then the amount in the Fund will be subtracted from $600,000 to determine the shortage. It will then be determined the number of licensees who had licensees on June 30 of that odd-numbered year. Divided the amount of shortage by the number of licensees, and that amount will be assessed on all licensees who renew their license, or any new licenses issued When any person commences legal action against a licensee that may result in payment from the Recovery Fund, they shall notify the Commission, in writing, of the commencement of that action If a payment is ordered from the Recovery Fund, the licensee's real estate license shall immediately be suspended