What is the correct answer to: Maximum from Maryland Guarantee Fund per transaction is:

The correct answer is $50,000. Answer B is correct because the Maryland Real Estate Guaranty Fund imposes a maximum payment of $50,000 per transaction under Maryland Real Property Article and the regulations of the Maryland Real Estate Commission. This cap ensures that individual claimants can receive meaningful compensation for losses caused by licensee misconduct while preserving the fund's ability to pay future claims. Claimants must first obtain a court judgment against the licensee before applying to the fund for reimbursement.

What background knowledge is needed for this Practice Of Real Estate question?

Real estate guaranty funds were established across the United States in the latter half of the 20th century as state legislatures recognized that consumers needed a last-resort remedy when licensed real estate professionals committed fraud or misappropriated funds. Maryland's Guaranty Fund was created under the Maryland Real Estate Brokers Act to provide a safety net for consumers who could not otherwise recover losses from a judgment-proof or bankrupt licensee. The fund's caps have been adjusted over time to reflect inflation and increasing property values in Maryland's market. The existence of the fund also serves as a deterrent to misconduct, as a licensee whose actions trigger a fund payout faces automatic license revocation.

What is a good way to remember the answer to this Practice Of Real Estate question?

Remember '$50,000 per transaction' with the phrase 'FIFTY is the FUND's limit per DEAL' — the three F's (Fifty, Fund, per Deal) create an alliterative memory hook. Visualize a $50,000 check with the Maryland state seal on it being handed to a wronged buyer — that image anchors the amount to the concept of consumer protection. To distinguish it from the $100,000 lifetime cap, remember: one transaction gets half the pie ($50K), but one bad licensee can eat the whole pie ($100K) if they harm enough people. When encountering questions about Maryland's guarantee fund, recall the 'fifty' in 'Maryland' and connect it to the $50,000 maximum limit.

What exam tip applies to this Practice Of Real Estate question?

Maryland exam questions about the Guaranty Fund will often include both $50,000 and $100,000 as answer choices to test whether you know the difference between the per-transaction cap and the per-licensee lifetime cap — always read the question carefully to determine which limit is being asked about. If the question says 'per transaction,' the answer is $50,000; if it says 'per licensee,' the answer is $100,000. Never select $10,000 or $25,000, as these are implausibly low for Maryland's high-value real estate market.

How does this Practice Of Real Estate concept apply in real world practice?

A buyer in Silver Spring, Maryland gives a $60,000 earnest money deposit to a broker who then misappropriates the funds for personal use and subsequently files for bankruptcy. The buyer sues the broker, obtains a court judgment, and then applies to the Maryland Real Estate Guaranty Fund for compensation. The fund pays the buyer the maximum of $50,000 per transaction, leaving the buyer with a $10,000 uncompensated loss — a painful but legally correct outcome that illustrates why the per-transaction cap matters in high-value markets.

Practice Of Real EstateLicense LawMEDIUM

Maximum from Maryland Guarantee Fund per transaction is:

Correct Answer

B) $50,000

$50,000 maximum per transaction.

Answer Options

$100,000

$50,000

$25,000

$10,000

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Maximum from Maryland Guarantee Fund per transaction is:

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Why the Other Options Are Wrong

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