Florida Broker Practice Exam

Who is ineligible for reimbursement from the Recovery Fund?

1. A spouse of the offending licensee

2. A client who paid a commission

3. A buyer in a FSBO transaction

4. All of the above

The correct answer is: All of the above

The Recovery Fund is designed to provide financial relief to aggrieved consumers who have suffered a financial loss due to the actions of a licensed real estate professional. However, certain individuals are ineligible to receive funds from this account. Spouses of the offending licensee are ineligible because the intention behind the fund is to protect consumers from the unethical or illegal actions of real estate practitioners. Since the spouse is often in a position to benefit or be associated with the actions of the licensee, this presents a conflict of interest in claiming reimbursement. Clients who paid a commission are also ineligible for reimbursement from the fund. The reasoning is that these individuals are generally regarded as participants in a legitimate transaction where the real estate professional was performing their duties as expected. The Recovery Fund aims to assist those who have faced misconduct or fraud, rather than those involved in regular commission-based agreements. Additionally, buyers in a For Sale By Owner (FSBO) transaction are not eligible for Recovery Fund reimbursement. In FSBO transactions, there is typically no real estate licensee representing either party, meaning that there can be no misconduct on the part of a licensed professional in these scenarios. Because all these categories represent individuals or scenarios not aligning with the fund's purpose, they are