Pennsylvania's Real Estate Recovery Fund provides:
Question & Answer
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Loans to licensees
The Recovery Fund does not provide loans to licensees; it is a consumer protection tool funded by licensee fees, and providing financial assistance to licensees would directly contradict its purpose of protecting the public from licensee misconduct.
Compensation to consumers harmed by licensee misconduct
Marketing funds for brokers
Marketing funds for brokers have no connection to the Recovery Fund's statutory purpose; such funds, if they exist, would come from private industry associations like local Realtor boards, not from a state-administered consumer protection fund.
Legal defense for licensees
The Recovery Fund explicitly does not provide legal defense for licensees — in fact, a licensee whose misconduct triggers a Recovery Fund payment faces automatic license suspension, making legal defense assistance the opposite of what the fund provides.
Why is this correct?
The correct answer is B because Pennsylvania's Real Estate Recovery Fund is explicitly designed to compensate consumers — not licensees — who have suffered financial harm due to fraud, misrepresentation, deceit, or violation of the Real Estate Licensing and Registration Act by a licensed real estate professional. Under 63 P.S. § 455.801, a consumer must first obtain a final court judgment against the licensee, demonstrate that the judgment is uncollectible, and then apply to the State Real Estate Commission for payment from the fund. The fund provides a critical backstop ensuring that consumers are not left without recourse simply because a dishonest licensee has no assets.
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