What is the Florida Real Estate Recovery Fund?
This is a short summary of what the Real Estate Recovery Fund (“RF”) is and how it works. It is not an exact restatement of the law.
Any specific questions concerning eligibility or discussion of a specific claim should be directed to a licensed Florida attorney.
The Real Estate Recovery Fund is an account created by the Florida Real Estate Commission (“FREC”) to reimburse any person, partnership, or corporation adjudged by a court of competent civil jurisdiction in this state to have suffered monetary damages by reason of any act committed, as a part of any real estate brokerage transaction involving real property in this state, by any broker or sales associate.
The RF is funded by a fee of $3.50 added to the license fee of new and renewal broker’s licenses, as well as a fee of $1.50 added to the license fee of new and renewal sales associate licenses. In addition, all moneys collected from fines imposed and collected by FREC are transferred to the RF.
Q: What Does This Mean for Brokers?
A: It is important to know about the process if a brokerage intends to hold escrow because the RF provides the protection for the broker if the broker receives an escrow disbursement order issued by the FREC. A brokerage should make sure they take the requisite steps when dealing with an escrow claim so that they can preserve their right to claim on the RF.
Be aware that the process of claiming on the RF is a legal one. A person must have a license to practice law to assist a third party in the filing of a claim. If a customer believes that they have been damaged by the actions of another licensee in Florida, the licensee should recommend they speak with an attorney concerning their claim.
Q: What Circumstances Allow Someone to Claim on the Recovery Fund?
A: Florida Statutes provides for two separate circumstances in which the FREC will allow recovery from the RF: