What is the correct answer to: Recovery Trust Account payments max per transaction:

The correct answer is $50,000 per transaction, $100,000 per licensee. Texas Occupations Code §1101.610 establishes the specific payment limits for the Recovery Trust Account: a maximum of $50,000 per transaction and a lifetime aggregate maximum of $100,000 per licensee across all claims. These limits mean that if multiple consumers were harmed by the same licensee in separate transactions, each could recover up to $50,000 per transaction, but the total paid out against that one licensee can never exceed $100,000. Option C correctly states both figures — $50,000 per transaction and $100,000 per licensee — making it the only accurate answer.

What background knowledge is needed for this Agency question?

Texas established its real estate recovery fund system in the mid-20th century as part of a broader national trend toward consumer protection in professional licensing. The original fund had much lower limits, reflecting the smaller transaction values of that era, and the Texas legislature has periodically updated the caps to keep pace with rising real estate values and consumer expectations. The fund is financed through a portion of real estate license fees paid by all Texas licensees, creating a collective insurance pool administered by TREC. The 2015 amendments to the Texas Occupations Code modernized the fund's structure and established the current $50,000/$100,000 limits, which were designed to provide meaningful consumer relief while maintaining the fund's long-term actuarial soundness.

What is a good way to remember the answer to this Agency question?

Use the visual of a '$50 bill and a $100 bill' to remember the Texas Recovery Trust Account limits: the smaller bill ($50) represents the per-transaction limit ($50,000), and the larger bill ($100) represents the per-licensee limit ($100,000). Think: 'One deal, one fifty; one licensee, one hundred' — a single transaction gets $50K, but a single bad licensee can cost the fund up to $100K total. The ratio is always 1:2 (transaction:licensee), which makes the numbers easy to reconstruct even under exam pressure. Visualize a menu with these two options to remember that the per transaction limit ($50,000) is half the per licensee limit ($100,000).

What exam tip applies to this Agency question?

Texas real estate exam questions about the Recovery Trust Account almost always test the specific dollar amounts, so these must be memorized exactly — $50,000 per transaction and $100,000 per licensee. Note that the per-licensee cap is exactly double the per-transaction cap, which provides a useful internal check: if you remember one number, you can derive the other. Also remember that payment from the Recovery Trust Account requires a final, unsatisfied court judgment against the licensee, and that payment results in automatic suspension of the licensee's license until the fund is repaid with interest.

How does this Agency concept apply in real world practice?

A Texas homebuyer named Carlos paid a licensed real estate agent $75,000 in earnest money and fees for a property purchase that the agent fraudulently pocketed and never applied to any real transaction. Carlos sued the agent, obtained a court judgment, but discovered the agent had no assets to satisfy the judgment. Carlos then applied to the Texas Real Estate Recovery Trust Account and received the maximum payment of $50,000 — the per-transaction cap — even though his actual loss was $75,000, because the statutory limit prevents full recovery in cases where damages exceed the cap. The remaining $25,000 of Carlos's loss remains an unsatisfied judgment against the agent personally.

AgencyRecovery_trust_accountHARD

Recovery Trust Account payments max per transaction:

Correct Answer

C) $50,000 per transaction, $100,000 per licensee

The Texas Recovery Trust Account pays maximum $50,000 per transaction and $100,000 per licensee.

Answer Options

$2,000 per transaction, $10,000 per licensee

$20,000 per transaction, $80,000 per licensee

$50,000 per transaction, $100,000 per licensee

$100,000 per transaction, $500,000 per licensee

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Scope of Authority

The extent of power and actions an agent is authorized to perform on behalf of the principal, as defined by the agency agreement.

Seller Agent Duties

The fiduciary obligations owed by a listing agent to the seller, including marketing the property, presenting all offers, and protecting the seller's confidential information.

Single Agency

A practice where the agent or brokerage represents only one party in a transaction — either the buyer or the seller, but never both.

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Recovery Trust Account payments max per transaction:

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