The Real Estate Recovery Fund and legal terms to know

Florida's recovery mechanism

The Florida Real Estate Recovery Fund is a separate account in the Professional Regulation Trust Fund. The Florida Real Estate Commission orders reimbursement for qualifying losses; the fund does not insure every real estate investment.

Under section 475.482(1), a Florida civil court must adjudge monetary damages from a qualifying license-law violation in a brokerage transaction involving Florida real property. At the time of the act, the broker or sales associate must have held a current, valid, active license and acted solely as a licensee. The licensee cannot have been the buyer, seller, landlord, tenant, or a specified officer or owner of an entity in such a role. A broker selling her own property fails this role requirement.

Three overlapping limits

For the ordinary claimant, section 475.484(1)(a) limits payment to the unsatisfied portion of the judgment or $50,000, whichever is less, restricted to actual or compensatory damages. Punitive damages are not compensatory. Except as provided in section 475.483, treble damages, court costs, attorney's fees, and interest are not recovered from the fund.

• Claims from the same transaction share $50,000, regardless of claimants or parcels.
• Payments based on judgments against one broker or sales associate cannot exceed $150,000 in aggregate.
• Apply these limits together; do not add them.

Escrow-order route and recovery rights

Section 475.482(2) separately covers a licensee required by a civil court to pay damages because of a distribution complying with a commission escrow disbursement order. The licensee must notify the commission and diligently defend the action. Section 475.484(1)(b) uses the judgment or $50,000, whichever is less.

An ordinary claimant paid from the fund assigns judgment rights to the commission to the extent paid. Subrogation puts the commission in the claimant's position to recover that amount for the fund. Insufficient funding postpones payment of valid unpaid claims until money becomes available. Claims are paid in approval order; claims approved at one meeting are prorated if their total exceeds the aggregate limit against one licensee.

Legal vocabulary

A plaintiff brings a civil lawsuit; the defendant responds. A judgment is a court's determination. Compensatory damages address loss; punitive damages punish. An injunction directs action or restraint; a subpoena commands attendance or production of evidence.

A Florida administrative citation is a disciplinary mechanism: if not disputed with the department within 30 days after service, it becomes a final order and constitutes discipline. Civil compensation, administrative discipline, and criminal prosecution have different purposes.