The purpose of the Florida Real Estate Recovery Fund is to reimburse individuals or business entities for monetary damages caused by the actions of a real estate licensee in relation to a real estate transaction. Payments from the Fund will be approved by the FREC if
- the licensee held a current, valid, active real estate license at the time the act was committed
- the licensee was neither the seller, buyer, landlord, or tenant nor an officer, director, partner, nor member of a business entity which was the seller, buyer, landlord, or tenant in the transaction
- the licensee was acting solely as a real estate licensee in the transaction; and
- the act was a violation of Chapter 475 F.S
Furthermore, the damaged claimant will be eligible for monetary reimbursement from the Fund if
- the claimant has filed suit in a civil court and obtained a final judgment against the licensee for his or her actions during the course of a real estate transaction
- the claimant has notified the FREC of the licensee’s actions
- the claim for recovery is made within 2 years of the date of the action or the date the action was discovered
- the claim for recovery is not made more than 4 years after the date of the alleged action was committed
- the claimant obtains a writ of execution on the judgment and executes an affidavit showing the claimant has made a concerted effort to find sufficient personal or real property belonging to the licensee that could be used to satisfy the judgment; and
- the claimant executes an affidavit showing the final judgment is not on appeal or an appeal has concluded
Additionally, a real estate licensee is eligible for monetary reimbursement from the Fund if the licensee:
- was the buyer, seller, landlord, or tenant in the transaction as a consumer and not as a licensee handling the transaction; and
- suffers monetary damages as a result of acts committed by the licensee/agent handling the transaction
Persons unqualified to make claim
An individual or business entity is not eligible to make a claim for payment from the Fund if
- the claimant is the spouse of the offending licensee or a personal representative of the spouse
- the claimant is a licensed broker or sales associate who performed as a single agent or transaction broker in the subject transaction
- the claim is based on a transaction in which the offending licensee owned or controlled the property in the subject transaction or in which the licensee was not acting as a broker or sales associate
- the claim is based on a transaction in which the offending broker or sales associate did not hold a current, valid license; and/or
- the judgment is against a real estate brokerage corporation, partnership, LLC, or LLP
Payment for claims
An injured party who meets all of the eligibility requirements may apply to the FREC for a reimbursement payment from the Fund. Florida statutes limit each payment to the lesser of the amount of the unsatisfied judgment or $50,000. Multiple claims for payments based on the same transaction are limited to a total of $50,000 regardless of the number of claims, claimants, or land parcels involved. Multiple claims against any one licensee are limited to a total of $150,000.
The license of a licensee whose actions have resulted in a reimbursement to a claimant is suspended from the date of the payment until the licensee has repaid with interest the total amount paid by the Fund.
Statutes limit the payments to compensatory or actual damages and do not pay treble damages, court costs, attorney fees, or interest unless the claimant is a licensee who is ordered by the court to pay monetary damages as a result of an escrow disbursement order (EDO) issued by the FREC. In that case, treble damages, court costs, attorney fees, and interest may be paid to the licensee. Again, the payment is limited to the amount of the judgment against the licensee or $50,000, whichever is less.
Fund limit and fees
The Florida Real Estate Recovery Fund is funded by fees charged to licensees. A $3.50 fee per year is charged for new and renewal broker licenses. A $1.50 fee per year is charged for new and renewal sales associate licenses. All moneys collected from disciplinary fines are also deposited into the Fund.
If the Fund’s balance reaches $1 million, the special fee for new and renewal licenses stops being charged. Once the balance reaches $500,000 as a result of payments being made, the fees will again be charged.