DRE: Real Estate Fund & Consumer Recovery Account

The DRE in the United States plays a crucial role in regulating and supervising the real estate industry. Part of his responsibility involves the management of funds related to the application of Real Estate Law. In this article, we will explore two important aspects of DRE-related funds: the Real Estate Fund and the Consumer Recovery Account.

Real Estate Fund

The Real Estate Fund is a fundamental component to support the activities of the DRE. All charges and fees collected in accordance with the Real Estate Law are deposited monthly into the Real Estate Fund. This fund is divided into separate accounts, including the Education and Research Account and the Consumer Recovery Account.

Money in the fund that is not allocated to the Consumer Recovery Account or the Education and Research Account is used by the Commissioner to carry out the provisions of the Real Estate Law.

Education and Research Account

An important component of the Real Estate Fund is the Education and Research Account. This account is funded by 8% licensing fees, and its primary purpose is to support initiatives related to education and research in the real estate industry.

Consumer Recovery Account

The Consumer Recovery Account is a crucial part of the Real Estate Fund that aims to protect consumers who have suffered losses due to the misconduct of real estate licensees. Here are some key aspects of this account:

  • Financing: Up to 12% of the license fees is credited to this account to be available in case of compensation to injured persons.
  • Refund for misconduct: When a member of the public obtains a qualifying judgment for fraud, misrepresentation, deception, or conversion of trust funds of a licensee, he or she may seek reimbursement from the Consumer Recovery Account for actual and direct losses, up to a maximum statutory limit .
  • Additional payments: If necessary, the Commissioner may require individuals to pay an additional amount to the Recovery Account when obtaining or renewing a license.
  • Limits of liability: Effective January 1, 2009, the Consumer Recovery Account liability limits for submitted claims are $50,000 per transaction and $250,000 per licensee.
  • Automatic license suspension: If the Recovery Account pays any amount to resolve a claim against a licensee, that person's license is automatically suspended. The license cannot be reinstated until the license holder has repaid the amount spent, plus interest, to the account.

These funds and accounts are crucial mechanisms to ensure that people harmed by wrongful actions by real estate licensees have the opportunity to receive adequate and fair compensation. Additionally, they support education and research in the real estate industry, contributing to its continuous improvement.

Legal and Tax Disclaimer

Please be advised that the content presented in this blog is for informational purposes only and should not be construed as legal or tax advice. The articles and information provided here are written from the perspective of a real estate agent affiliated with Keller Williams, and do not represent legal or tax counsel.

As the author, I am a licensed real estate professional under Keller Williams, holding Brokerage DRE License Number: #02197031. However, it is important to note that my expertise is in the field of real estate, and not in legal or tax matters. The insights and opinions shared on this blog are based on my experiences and knowledge in the real estate industry and should be treated as general guidance rather than definitive legal or tax advice.

For specific legal or tax concerns relating to any real estate transactions or investments, readers are strongly encouraged to consult with a qualified attorney or tax advisor who can provide tailored advice based on your individual circumstances and the latest legal and regulatory requirements.

The information on this blog is provided "as is" without warranty of any kind, and I, along with Keller Williams and its affiliates, disclaim all liability for any loss, damage, or misunderstanding arising from reliance on the information contained herein.

Related news

Leave a Comment

Your email address will not be published. Required fields are marked *

Get your FREE guide

Enter your email so we can send you your guide

Secure your space in our webinar.

Don't worry if you can't attend: we'll send you the recording!