A portion of agency fees goes to Ohio's recovery fund - how much?
Audio Lesson
Duration: 2:12
Question & Answer
Review the question and all answer choices
$5.00
$5.00 is too low and does not match the amount specified in Ohio's statutory fee schedule for recovery fund contributions; selecting this answer reflects a common tendency to underestimate specific statutory dollar amounts.
$10.00
$20.00
$20.00 is a plausible distractor because it is close to the correct amount, but it overstates the statutory contribution and does not reflect the figure set by the Ohio legislature in ORC 4735.143.
$100.00
$100.00 would represent a dramatically higher contribution than Ohio law requires and is inconsistent with the modest per-licensee assessment structure used to sustain the recovery fund.
Why is this correct?
Under Ohio Revised Code Section 4735.143, a portion of the real estate license fee is designated for the Ohio Real Estate Recovery Fund, and the amount attributable from agency fees is $10.00 per licensee. This fixed statutory contribution ensures the fund remains solvent to pay valid consumer claims up to the statutory maximum. The $10.00 figure is a specific legislative choice codified in Ohio law and is therefore a precise, testable fact.
Deep Analysis
AI-powered in-depth explanation of this concept
Real estate recovery funds exist as a consumer safety net of last resort, compensating members of the public who suffer financial harm caused by the fraudulent, negligent, or dishonest acts of a licensed real estate agent when the agent cannot satisfy a court judgment. The fund is sustained through mandatory per-licensee contributions collected at the time of initial licensure or renewal, ensuring a continuously replenished pool of money without placing the full burden on taxpayers. Ohio's recovery fund, administered under the Ohio Revised Code, reflects the state's policy that the real estate profession itself — through its licensing fees — should bear collective responsibility for the misconduct of its members. The specific dollar amount attached to agency fees is a frequently tested detail because it is concrete, memorable, and directly tied to Ohio's statutory fee structure.
Knowledge Background
Essential context and foundational knowledge
Ohio established its Real Estate Recovery Fund as part of its broader real estate licensing framework to protect consumers who obtain civil judgments against licensees but cannot collect because the licensee is insolvent, bankrupt, or has fled the jurisdiction. Recovery funds became common across U.S. states during the 1970s and 1980s as consumer protection movements pushed for greater accountability in professional licensing. Ohio's fund is governed by ORC Chapter 4735 and has been periodically updated to adjust contribution amounts and maximum payout limits as the real estate market and claim volumes evolved. The mandatory nature of the contribution — embedded in the licensing fee — ensures that every active licensee participates in funding consumer protection.
Podcast Transcript
Full conversation between instructor and student
Instructor
Hey there, let's dive into today's question. It's about the practice of real estate in Ohio, specifically regarding agency fees and the recovery fund.
Student
Oh, I see. So, it's asking how much of the agency fees goes to Ohio's recovery fund?
Instructor
Exactly! This question is testing your knowledge of Ohio's real estate recovery fund contribution. It's important to understand this because it's a regulatory requirement for all licensed real estate professionals.
Student
Got it. So, what's the correct answer?
Instructor
The correct answer is B, $10.00. Ohio law mandates that $10 from each real estate transaction fee be allocated to the recovery fund. It's a fixed amount set by the Ohio Division of Real Estate & Professional Licensing.
Student
I see, so it's not based on the value of the transaction?
Instructor
That's right. It's a flat fee of $10 regardless of the transaction amount. This fund acts as a safety net for consumers who might suffer financial harm due to licensed agents' illegal, fraudulent, or dishonest acts.
Student
That makes sense. Why do you think students might pick the wrong answers?
Instructor
Well, option C, $20.00, might seem reasonable because it's double the correct amount, but it's not the mandated amount for Ohio's recovery fund. Option D, $100.00, is way off the mark and could be confused with other fees like license renewal or insurance premiums.
Student
I see. Any memory technique for this one?
Instructor
Absolutely! Try this rhyme: "Ten bucks to Ohio, no more, no less, keeps consumers safe from distress." It's a fun way to remember the $10 contribution.
Student
That's a great tip! So, for questions about state-specific fees, we should just memorize the exact amounts?
Instructor
Exactly. It's crucial to have that knowledge down pat. Ohio's recovery fund contribution is a fixed $10, and it's not going to change.
Student
Thanks for explaining, I feel more confident about this now.
Instructor
You're welcome! Remember, it's all about the details when it comes to real estate regulations. Keep studying, and you'll do great on the exam!
Remember '$10 for protection' using the image of a ten-dollar bill with a shield on it — every Ohio licensee pays a 'shield fee' of $10 to protect consumers. You can also associate the number 10 with the ten fingers on two hands: both the agent and the consumer need all ten fingers to 'shake hands' on a safe deal, and $10 makes that safety possible.
Recite this rhyme when encountering questions about Ohio's recovery fund to remember the exact $10 contribution amount.
Ohio exam questions about specific dollar amounts require precise memorization — do not rely on approximation or logic, because the distractors are deliberately chosen to be close to the correct figure. Memorize the $10.00 recovery fund contribution as a standalone fact, and pair it with the ORC 4735 reference to anchor it in your memory.
Real World Application
How this concept applies in actual real estate practice
Consider an Ohio homebuyer named Patricia who discovers after closing that her agent deliberately concealed a known structural defect and forged inspection documents. Patricia wins a $45,000 civil judgment against the agent, but the agent has since declared bankruptcy and has no assets. Patricia can apply to the Ohio Real Estate Recovery Fund for compensation up to the statutory limit, and that fund was built in part from the $10.00 contribution made by every Ohio licensee — including the very agent who defrauded her — when they paid their agency fees.
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