VA Transaction Recovery Fund Flashcards

VA Transaction Recovery Fund Flashcards Harry is a broker. He works out a deal with Larry (a developer), Darrell (a contractor), and Tony (a mortgage banker). The deal states that Harry will sell all of the houses that Darrell built on Larry's land. After that, Tony would handle the mortgages of any buyers through his bank. Harry sells three houses, then runs off with all the funds. Larry, Darrell, and Tony all file claims for payment from the Transaction Recovery Fund. Who is most likely to

collect?Select one:A. Larry, the developerB. Darrell, the

contractorC. Tony, the mortgage bankerD. No one no one(virginia transaction recovery fund) People who regularly deal in real estate transactions are not eligible for payment from the Transaction Recovery Fund. This includes real estate agents, bankers, developers, and contractors.If payment is made on a broker's behalf from the Transaction Recovery Fund, what action does the Board

take?Select one:A. Automatically suspend the broker's

licenseB. Automatically fine the licensee for $1,000, then schedule a hearingC. Automatically revoke the broker's licenseD. Schedule a hearing to determine guilt or innocence automatically revoke the broker's license(virginia transaction recovery fund) Payment from the Fund results in automatic license revocation for the person named in the complaint.Kathy the Consumer has filed a claim for payment from the Transaction Recovery Fund. The reason for the claim is to reimburse a loss sustained after a salesperson made a gross misrepresentation. In order for Kathy to collect, she must have already:Select one:A. Filed a suit against the local Realtors AssociationB. Filed a claim against the salesperson in a court of competent jurisdictionC. Filed a claim against the salesperson's brokerD. Filed a claim with HUD filed a claim against the salesperson in a court competent jurisdiction(virginia transaction recovery fund) Before an eligible claim can be filed for payment from the Fund, the claimant must take all legal steps for possible reimbursement. As such, Kathy should have already gone to court and obtained a final judgment (no possibility for another appeal). She has no reason or cause to sue the local Association of Realtors. It is probable that Kathy named the broker in her suit, but that is not required.An award from the Transaction Recovery Fund will result in:Select one:A. Automatic suspension of the real estate licenseB. Automatic revocation of the real estate licenseC.A fine not to exceed $50,000D. A fine not to exceed $20,000, and up to 6 months in prison automatic revocation of the real estate license(virginia transaction recovery fund) Upon payment of a claim, the Real Estate Board REVOKES the license of the person named in the complaint. The Board may impose a maximum fine of $2,500 per violation (ex. improper or dishonest conduct), but it cannot order a prison sentence.If a judgment has been awarded to a claimant, what must the claimant do before the Board will authorize payment

from the Transaction Recovery Fund?Select one:A. The

claimant must have gone after any assets and property belonging to the debtorB. The respondent must assign all commissions and personal property to the claimant or the BoardC. The respondent must file bankruptcy and sell all propertyD. The respondent must submit to interrogatories by claimant the claimant must have gone after any assets and property belonging to the debtorYour answer is incorrect.(virginia transaction recovery fund) After the claimant has obtained a judgment, he must pursue all legal avenues for reimbursement. This would include a legal attempt to seize and sell all of the respondent's assets. Then, and only then, is the claimant eligible for payment from the Fund.

Kerra the Consumer has filed a claim for payment from the Transaction Recovery Fund. Which of the following

statements must be incorrect?Select one:A. Kerra filed suit

against the local Association of RealtorsB. Kerra has obtained a judgement in courtC. Kerra claim cannot include interest in her damagesD. Kerra must wait until there is sufficient money in the Fund before payment Kerra filed suit against the local association of realtors(virginia transaction recovery fund) There is no requirement to sue the Association of Realtor--in fact, there is no reason to sue them if she's trying to get a TRF payment. All of the other answers are correct statements.Claims for payment from the Transaction Recovery Fund are filed with the:Select one:A. Real Estate BoardB. Local Association of RealtorsC. Court of competent jurisdictionD.Salesperson's broker real estate board(virginia transaction recovery fund) Claims are submitted to the Real Estate Board, but a claimant is only eligible for payment after she has exhausted all other legal avenues for recovery through the court system.If the Transaction Recovery Fund falls below a statutory minimum, licensees may be assessed to restore the Fund.What is the maximum that one licensee may be assessed

during a two-year period?Select one:A. $20B. $40C. $50D.

There is no maximum assessment $20(virginia transaction recovery fund) If the TRF Funds falls below the statutory minimum, the Board may re-assess licensees for no more than $20 within a two year period.What is the maximum amount that can be paid from the Transaction Recovery Fund for claims against the same

licensee during a two year period?Select one:A. $10,000B.

$20,000C. $50,000D. $100,000

$100,000(virginia transaction recovery fund) The maximum amount that any one person can claim from the Fund is always $20,000. However, if multiple claimants file against the licensee from a single transaction, the maximum paid to all claimants would be a total of $50,000 during any 2-year period. If the licensee is involved in multiple transactions, the maximum that the Fund will pay to all claimants is $100,000 during any 2-year period.A real estate license could be suspended without investigation if the licensee:Select one:A. Engages in acts of brokerage while on inactive statusB. Violates the Virginia Real Property ActC. Does not pay the Transaction Recovery Fund assessmentD. All of the above does not pay the transaction recovery fund assessment(virginia transaction recovery fund) The only instance where your license can be suspended or revoked without a hearing is in relation to the Transaction Recovery Fund. Specifically, a license will be suspended if you fail to pay your assessment, and it will be revoked if you c A consumer may file a Transaction Recovery Fund claim for a loss sustained as the result of a licensee's fraudulent act. In order to receive payment, this claim must be in connection with:Select one:A. A personal loanB. An investment in a limited real estate partnershipC. A real estate transactionD. All of the above a real estate transaction(virginia transaction recovery fund) The Transaction Recovery Fund is ONLY used to pay claims arising from real estate transactions.The minimum balance of the Virginia Real Estate Transaction Recovery Fund is:Select one:A. $800,000B.

$750,000C. $600,000D. $400,000

$400,000(virginia transaction recovery fund) The minimum balance of the Transaction Recovery Fund is $400,000. If the Fund dips below that amount, the Board may assess licensees up to $20 in a two year period.If the Board has authorized payment from the Transaction Recovery Fund, what is the effect for the licensee who

committed the misconduct?Select one:A. The licensee has

• years to repay the FundB. The license will be

automatically revokedC. The license will be automatically

suspendedD. The licensee may continue to sell real estate if a court has adjudicated him as bankrupt the license will automatically be revoked(virginia transaction recovery fund) Once a payment is made from the Fund, the person's license is revoked without benefit of a hearing.

New licensee applicants are required to pay into the Transaction Recovery Fund. If necessary, the Board may reassess licensees:Select one:A. $20 every yearB. $20 in a two year periodC. $20 every two yearsD. $30 in a two year period $20 in a tow year period(virginia transaction recovery fund) If the Fund falls below the $400,000, the Board may assess licensees an additional $20 each. This assessment can only be requested once during a two year period (which always ends on June 30th).If a person wants to make a claim from the Transaction Recovery Fund, where should this claim be filed?Select

one:A. A court of competent jurisdictionB. The Virginia

Association of RealtorsC. The Real Estate BoardD. The principal broker of the respondent the real estate board(virginia transaction recovery fund) You can ONLY file a claim with the Real Estate Board.However, a claimant must first obtain a final judgment against the licensee from a court of competent jurisdiction.Which of the following persons could file a claim for payment from the Transaction Recovery Fund?Select

one:A. A licensed salesperson, to recover money that his

broker owesB. A lender, to recover losses sustained due to a real estate agent's misrepresentationC. A tenant, seeking to recover a security deposit from his landlordD. All of the above all of the above(virginia transaction recovery fund) This is a trick question. All the listed persons COULD FILE a claim, but none would be able to collect. When a claim is filed, the first step is to determine whether the claimant is eligible to receive payment from the Fund. Remember that consumers are the only ones eligible to collect under the Act, and only if they have been injured by a real estate licensee.When the Transaction Recovery Fund balance falls below a statutory minimum, it results in:Select one:A. An assessment from all licensees to restore the fund to the minimum balanceB. An assessment from active licensees to restore the fund to the minimum balanceC. An evaluation of the Fund's investments in order to generate additional earningsD. A 20 percent decrease in the maximum payment one may receive from the fund an assessment from all licensees to restore the fund to the minimum balance(virginia transaction recovery fund) Assessments are imposed upon all licensees, whether they are active or inactive. The Board may assess up to $20 from licensees in a 2 year period to bring the Fund back to the minimum balance.

The purpose of the Transaction Recovery Fund is to:Select

one:A. Reimburse financial losses caused by licensee

misconductB. Encourage higher education in real estateC.Provide retirement income for brokersD. Provide funds for the Board's operating expenses reimburse financial losses caused by licensee misconduct(virginia transaction recovery fund) The law and regulations are silent on the actual purpose of the Transaction Recovery Fund. However, the Act does state that when a person receives an award for damages as a result of a licensee's improper or dishonest dealing, a consumer may file a claim for recovery of such losses.After proper investigation, the Board may authorize a payment from the Transaction Recovery Fund in order to offset the losses sustained.The Real Estate Board can re-assess licensees if the

Transaction Recovery Fund's balance falls below:Select

one:A. $400,000B. $500,000C. $750,000D. $900,000

$400,000(virginia transaction recovery fund) The Board may assess all licensees (active and inactive) if the Fund balance dips below $400,000.In a single transaction, what is the maximum amount that a person can collect from the Transaction Recovery Fund

due to licensee misconduct?Select one:A. $100,000B.

$20,000C. $15,000D. $10,000

$20,000(virginia real estate transaction recovery fund) The maximum payment to a person is always $20,000 (whether this is for a single transaction or multiple transactions). If multiple persons have filed a claim against the licensee, the Board may institute a maximum total amount for all claimants