Real Estate Guaranty Fund
The Real Estate Guaranty Fund, administered by the Department of Consumer Protection, can reimburse consumers who suffer financial losses in unscrupulous real estate transactions. A one-time $20 fee assessed on new real estate licensees generates income for the fund.
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MD Bus Occ & Prof Code § 17-404 (2013) What's This?
§17-404.
(a) (1) Subject to the provisions of this subtitle, a person may recover compensation from the Guaranty Fund for an actual loss.
(2) A claim shall:
(i) be based on an act or omission that occurs in the provision of real estate brokerage services by:
1. a licensed real estate broker;
2. a licensed associate real estate broker;
3. a licensed real estate salesperson; or
4. an unlicensed employee of a licensed real estate broker;
(ii) involve a transaction that relates to real estate that is located in the State; and
(iii) be based on an act or omission:
1. in which money or property is obtained from a person by theft, embezzlement, false pretenses, or forgery; or
2. that constitutes fraud or misrepresentation.
(b) The amount recovered for any claim against the Guaranty Fund may not exceed $50,000 for each claim.
(c) (1) A person may not recover from the Guaranty Fund for any loss that relates to:
(i) the purchase of any interest in a limited partnership that is formed for the purpose of investment in real estate;
(ii) a joint venture that is promoted by a licensed real estate broker, a licensed associate real estate broker, or licensed real estate salesperson for the purpose of investment in real estate by 2 or more individuals; or
(iii) the purchase of commercial paper that is secured by real estate.
(2) A claim under the Guaranty Fund may not be made by:
(i) the spouse of the licensee or the unlicensed employee alleged to be responsible for the act or omission giving rise to the claim; or
(ii) the personal representative of the spouse of the licensee or the unlicensed employee alleged to be responsible for the act or omission giving rise to the claim.
(d) A claim under this subtitle shall be submitted to the Commission within 3 years after the claimant discovers or, by the exercise of ordinary diligence, should have discovered the loss or damage.
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45:15-29.3. Orders, rules, regulations continued
The orders, rules and regulations heretofore made or promulgated by the New Jersey Real Estate Commission shall continue with full force and effect until amended or repealed by the New Jersey Real Estate Commission constituted hereunder as the Division of the New Jersey Real Estate Commission in the Department of Insurance.
L. 1948, c. 88, § 9; amended 1993, c. 51, § 32.
45:15-29.4. “New Jersey Real Estate Commission,” reference
Whenever the term “New Jersey Real Estate Commission” occurs or any reference is made thereto, in any law, contract or document, the same shall be deemed to mean or refer to the New Jersey Real Estate Commission constituted hereunder as the Division of the New Jersey Real Estate Commission in the Department of Insurance.
L. 1948, c. 88, § 10; amended 1993, c. 51, § 33.
45:15-29.5. Actions, proceedings not affected
This act shall not affect actions or proceedings, civil or criminal, brought by or against the New Jersey Real Estate Commission and pending on the effective date of this act, and such actions or proceedings may be prosecuted or defended in the same manner and to the same effect by the New Jersey Real Estate Commission constituted hereunder as the Division of the New Jersey Real Estate Commission in the Department of Insurance as if the foregoing provisions had not taken effect; nor shall any of the foregoing provisions affect any order or recommendation made by, or other matters or proceedings before, the New Jersey Real Estate Commission; and all such matters or proceedings pending before the New Jersey Real Estate Commission on the effective date of this act shall be continued by the New Jersey Real Estate Commission constituted hereunder as the Division of the New Jersey Real Estate Commission in the Department of Insurance.
L. 1948, c. 88, § 11; amended 1993, c. 51, § 34.
ARTICLE 2. REAL ESTATE AUCTIONEERS [REPEALED]
45:15-30 to 45:15-33. Repealed by L. 1953, c. 229, § 9
ARTICLE 3. REAL ESTATE GUARANTY
FUND 45:15-34. Real estate guaranty fund established
A real estate guaranty fund is established as a special trust fund to be maintained by the State Treasurer and administered by the New Jersey Real Estate Commission in accordance with the provisions of this act to provide a fund from which recovery may be obtained by any person aggrieved by the embezzlement, conversion or unlawful obtaining of money or property in a real estate brokerage transaction by a licensed real estate broker, broker-salesperson, salesperson or referral agent or an unlicensed
employee of a real estate broker; provided, however, that the amount of such recovery shall not exceed in the aggregate the sum of $ 10,000 in connection with any one transaction regardless of the number of claims, persons aggrieved, or parcels of, or interests in real estate involved in the transaction. The maximum amount recoverable per transaction shall be increased to $ 20,000 for claims filed on the basis of causes of action which accrue after the effective date of P.L.1993, c.51 (C.45:15-12.3 et al.).
L. 1976, c. 112, § 1; amended 1993, c. 51, § 35, eff. May 20, 1993; 2009, c. 238, § 17, eff. July 1, 2011.
45:15-35. Additional amount payable upon initialissuance of license
Upon the initial issuance of a biennial license as a real estate broker, broker-salesperson, salesperson or referral agent the licensee shall pay to the commission, in addition to the license fee fixed by R.S.45:15-15, an additional amount to be forwarded by the commission to the State Treasurer and accounted for and credited by him to the real estate guaranty fund. The additional amount payable by a broker or broker-salesperson shall be $ 20 and by a salesperson or referral agent, $ 10.
L. 1976, c. 112, § 2; amended 1993, c. 51, § 36; 1996, c. 38, § 4, eff. Dec. 18, 1996; 2009, c. 238, § 18, eff. July 1, 2011.
45:15-36. Management and investment of funds
The State Treasurer shall hold, manage and through the Division of Investment, invest and reinvest funds of the real estate guaranty fund and credit all interest and other income earned thereon to the real estate guaranty fund in the same manner as provided by law with respect to investment of pension and retirement funds administered by the State. The Real Estate Commission shall keep the State Treasurer advised of the anticipated cash demands for payment of claims against the fund.
L. 1976, c. 112, 3, di. Feb. 1, 1977.
45:15-37. Payments from real estate guaranty fund
No claim shall be made for payment from the real estate guaranty fund except upon the reduction to final judgment, which shall include reasonable attorney fees and costs, of a civil action against the broker, broker-salesperson, salesperson, referral agent or unlicensed employee of a broker, and, where the judgment creditor has pursued all available remedies, made all reasonable searches, and has been unable to satisfy the judgment from the licensee’s assets, the entry of a court order which directs the New Jersey Real Estate Commission to make payment from the fund. No such order shall authorize a payment to the spouse or personal representative of the spouse of the judgment debtor.
No order shall be entered unless the claimant, either at the time of filing the civil action or thereafter, files a certification affirming that a criminal complaint alleging the misappropriation of funds by the broker, broker-salesperson, salesperson, referral