A judgment creditor has obtained a final court judgment against a California real estate licensee for fraud but cannot collect because the licensee has no attachable assets. Which of the following correctly describes the maximum recovery available and a key consequence to the licensee if the Real Estate Recovery Account pays the claim?
Correct Answer
B) The claimant may recover up to $50,000 per transaction with a $250,000 lifetime cap per licensee, and the licensee's license is automatically suspended until full reimbursement is made to the account
Under Cal. B&P Code §§10471–10474.5, the Real Estate Recovery Account compensates judgment creditors who cannot satisfy a final court judgment against a licensee for fraud, misrepresentation, or deceit. Recovery is capped at $50,000 per transaction and $250,000 in aggregate per licensee. Critically, upon any payment from the account on a licensee's behalf, the licensee's license is automatically suspended by operation of law and cannot be reinstated until the licensee repays the full amount paid plus interest (B&P Code §10475).
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Related Topics & Key Terms
Key Terms:
Related Concepts
A property condition disclosure is a written statement by the seller detailing the known condition of the property, including defects, repairs, and issues with major systems. Most states require sellers to complete this form.
Protected classes are groups of people who are legally shielded from discrimination based on specific characteristics.
Radon disclosure involves informing buyers about the presence or potential presence of radon gas in a property. Radon is a naturally occurring radioactive gas that can accumulate in buildings and is the second leading cause of lung cancer.
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