Over the course of his career, broker David has had multiple Recovery Fund claims paid out against him by AREC. The total payments made from the Recovery Fund on David's behalf have now reached $150,000. A new claimant, Ellen, has just received a court judgment against David and applies to the Recovery Fund. What will happen to David's license and Ellen's claim?
Correct Answer
C) David's license will be suspended and Ellen's claim will be denied because the lifetime cap has been reached
Under Code of Alabama §34-27-31, once the Recovery Fund pays out the lifetime maximum of $150,000 against a single licensee, no further payments will be made on that licensee's behalf. Additionally, any payment from the Recovery Fund triggers an automatic suspension of the licensee's license. Since the lifetime cap has been reached, Ellen's claim will be denied. David's license is subject to automatic suspension as a consequence of the prior Fund payments having been triggered.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The National Do Not Call Registry is a federal program administered by the FTC that allows consumers to opt out of receiving unsolicited telemarketing calls, including calls from real estate agents soliciting business.
Brokers in Florida have strict responsibilities for managing escrow accounts, including monthly reconciliation and proper handling of trust funds.
FREC has the authority to impose fines and other disciplinary actions on licensees who violate real estate laws and rules.
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