Florida Broker Practice Exam

If the licensee was inactive at the time of the transaction, what is the status regarding reimbursement from the Recovery Fund?

1. Eligible for reimbursement

2. Not eligible for reimbursement

3. Conditional eligibility

4. Depends on the circumstances

The correct answer is: Not eligible for reimbursement

In Florida, the Recovery Fund is designed to protect consumers who suffer monetary losses due to the actions of a licensed real estate broker or sales associate. However, to be eligible for reimbursement from the Recovery Fund, the licensee must be active at the time of the transaction that led to the claim. When a licensee is classified as inactive, it signifies that they are not currently engaged in any real estate activities or transactions. This status disqualifies them from being considered for reimbursement because the Recovery Fund is only intended to cover transactions conducted by active licensees. Therefore, if a licensee was inactive during the transaction, they would not be eligible for claims from the Recovery Fund regardless of the circumstances surrounding the transaction. Understanding this eligibility criterion is crucial as it reinforces the importance of maintaining an active status in order to protect both consumers and oneself from potential liabilities in real estate dealings.