The Louisiana Real Estate Recovery Fund was established for the purpose of reimbursing persons adjudged to have suffered monetary damages in the course of a real estate transaction wherein a real estate licensee violated the Louisiana Real Estate License Law. The fund is maintained at a minimum level of four hundred thousand dollars.
Eligibility for the fund is established when a claimant pursuing recovery from a licensee in civil court proceedings has exhausted all avenues of collection from the judgment debtor pursuant to receiving a full judgment in a court of competent jurisdiction. At the time the civil court action is initiated, the claimant must notify the Commission by certified mail and the Commission may intervene in the judicial proceedings.
Payments for claims arising out of the same transaction shall not exceed the aggregate limit of twenty thousand dollars, regardless of the number of claimants or parcels of real estate involved in the transaction. Payments for claims based on a judgment against any one licensee shall not exceed the aggregate limit of fifty thousand dollars.
The Commission may allow an aggrieved party to submit a claim by notarized affidavit when the claim is based on actions of one or more licensees who have been sanctioned by the Commission in an adjudicatory proceeding. if the hearing record corroborates the affidavit submitted by the claimant and the amount of the claim does not exceed two thousand dollars.
Payment from the recovery fund may not be made as reimbursement for any damages other than actual damages suffered by the claimant. Payment from the fund for other costs related to or pursuant to civil proceedings, such as attorney fees, court costs, medical damages and punitive damages, is prohibited.
The right to recover shall be forever barred unless application is made within one hundred eighty days from the date a person established eligibility to recover from the Fund.
Detailed requirements for establishing eligibility to recover from the Recovery Fund are specified in Section 1462 of the Louisiana Real Estate License Law.
FREQUENTLY ASKED QUESTIONS:
Is there a form prescribed for submitting applications for recovery from the Recovery Fund?
No. Applications are to be submitted by letter to the Commission requesting payment from the Fund. Enclose the original or certified copies of all documents filed by or on behalf of the claimant with a court of competent jurisdiction and documents issued by a court or other entity in connection with the effort to recover.
What steps must be taken to institute action to recover from the Recovery Fund?
The Louisiana Real Estate License Law specifically requires claimants to notify the Commission by certified mail at the time action to recover is initiated. This is accomplished by sending a letter to the Commission with a copy of the petition bearing a stamp that indicates the date on which the petition was filed with the court.
Can a licensed real estate broker or salesperson, who acted as a principal in a real estate transaction, submit a claim to the Commission for recovery from the Recovery Fund?
Yes, provided the conditions for establishing eligibility for recovery have been satisfied.
How do I contact the Recovery Fund?
You may email the Recovery Fund at .
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The Virginia Real Estate Transaction Recovery Act provides relief to eligible consumers who have incurred losses through the improper or dishonest conduct of a licensed real estate salesperson, broker, or firm. The Recovery Fund is supported entirely by assessments paid by licensees, not by any tax revenues.
Filing a claim does not guarantee payment.
Who Is Eligible to File a Claim?
A person who has been awarded a judgment in a court of competent jurisdiction in the Commonwealth of Virginia against a licensed real estate salesperson, broker, or firm ("licensee") may be eligible to file a claim. The court judgment must be obtained against an individual or entity licensed by the Real Estate Board and must be based upon the improper or dishonest conduct of the licensee. Any language in the judgment supporting the conclusion that the court found the conduct of the licensee involved improper or dishonest conduct may be used by the Board to determine eligibility for recovery from the Fund.
- "Improper or dishonest conduct" includes only the wrongful and fraudulent taking or conversion of money, property, or other things of value or material misrepresentation or deceit.
- Any disciplinary action taken against a licensee by the Real Estate Board does not, by itself, satisfy any statutory requirements to support a Recovery Fund claim.
In situations where the real estate licensee has filed bankruptcy, the claimant must first file a claim with the proper bankruptcy court. If no distribution is made, or if the distribution fails to satisfy the claim, the consumer may then file a Recovery Fund claim with the Board. If the court order is silent on the matter of the licensee's conduct, the Board will determine whether the conduct was improper and dishonest and what amount, if any, such claimant is entitled to recover from the Fund.
The real estate salesperson, broker, or firm must have been licensed during the period in which the improper or dishonest conduct occurred. The conduct must have occurred in connection with a transaction involving the sale, lease, or management of real property by the licensee acting in the capacity of a real estate broker or real estate salesperson, and not in the capacity of a principal.
State law prohibits the following from filing a Recovery Fund claim:
- a real estate licensee;
- the personal representative of a real estate licensee;
- the spouse or child of the licensee who is the subject of the claim (the licensee against whom the judgment was awarded), nor the personal representative of such spouse or child; or
- any lending or financial institution, nor anyone whose business involves the construction or development of real property.
Please note, the General Assembly, not the Real Estate Board, establishes eligibility criteria for the Recovery Fund.
Limitations
State law limits a single Recovery Fund claim to $20,000. Multiple claims involving the same real estate licensee are limited to $100,000 per biennial license period.
If multiple claims involving one licensee exceed $100,000, the claim amounts must be prorated.
The Recovery Fund does not pay interest, punitive damages, exemplary damages, or any amounts that do not constitute actual monetary loss to the claimant. However, the award (claim) may include attorneys' fees and court costs.
Revocation of License
When a payment involving a real estate licensee is made from the Recovery Fund, in most cases, the applicable license is automatically revoked. Any licensee whose license is revoked shall not be eligible to apply for a license as a broker or salesperson until the amount paid from the Recovery Fund is repaid in full, plus interest. The Real Estate Board may also take further disciplinary action against the licensee. However, any disciplinary action taken against the licensee by the Real Estate Board does not, by itself, satisfy any statutory requirements to support a Recovery Fund claim.
Source of Funding
The Real Estate Transaction Recovery Fund is not funded by any tax revenues. All administrative costs and claims are funded with assessments paid by real estate licensees.
Frequently Asked Questions (FAQs)
Is it necessary to be represented by an attorney?
This decision is entirely up to the claimant. While some claimants choose to be represented by an attorney in their claim, it is not necessary in order to file a claim. If the claimant is represented by an attorney, DPOR staff will contact that attorney directly with regard to the claim. Attorney fees may be recoverable from the Fund.
What can be expected after the filing of a claim?
Once a claim has been received by DPOR, staff will review the file to determine whether the claimant meets the eligibility requirements established by state law (§ 54.1-2112 et seq.). If the claimant is determined eligible based on the staff review, the claim file along with a recommendation for payment will be reviewed by the full Real Estate Board at its next regularly scheduled meeting, where the Board will make a final decision on whether to approve the claim and for what amount.
When respondent licensees choose to exercise their due process right to a hearing, or if questions concerning actual monetary loss or eligibility exist, claims are referred to an Informal Fact-Finding (IFF) Conference to gather
additional information. The purpose and focus of any IFF Conference, the administrative proceeding where a Board member presides, is to determine the actual loss the claimant incurred as a result of the actions of the licensee and/or any eligibility issues involved. Only the actual loss, along with attorney fees and court costs, will be considered. Special damages, consequential damages, punitive damages, etc. will not be considered. The Board member may ask questions about the
claim and the information provided. Following the presentation of this information, the Board member makes a recommendation as to the amount of monetary relief, if any, to approve. The recommendation and claim file is then reviewed by the full Board at a regularly scheduled meeting, where the Board makes the final decision on whether to approve the claim and for what amount.
What is the basic time frame?
It is difficult to state a general time frame because each claim is different. Factors affecting the process include whether all required documentation is included with the claim form and if the civil action has been completed. IFF Conferences are normally held monthly to hear Recovery Fund claims, and the Board itself meets approximately every eight weeks to review Recovery Fund claim recommendations.
Claimants should be aware that obtaining assistance from the Recovery Fund is not a swift process in most cases, and occurs only after all other civil legal remedies are exhausted.
Claim Form and Instructions
When the consumer takes any legal action against a real estate licensee, the Clerk of Court should be notified that the Real Estate Board must also receive a copy of the notice served on the licensee. An affidavit stating the acts of improper or dishonest conduct of the licensee should be included with the notice given to the Board.
After the consumer obtains a judgment from a court, the consumer must attempt to collect from the licensee by conducting debtor interrogatories. This legal action determines whether the licensee has any assets which can be sold or applied to satisfy the court judgment. If any assets are revealed by the interrogatories, the consumer must provide evidence that all legally available actions have been taken to sell the assets, and disclose amounts realized from such actions.
A Real Estate Recovery Fund Claim Form must be filed with the Department of Professional and Occupational Regulation (DPOR) within 12 months after the judgment is final. Please attach a certified copy of the judgment order, copies of all pleadings filed by either party (if any), a copy of the contract, a notarized affidavit stating the acts of improper or dishonest conduct by the licensee which form the basis of this claim, and evidence that debtor interrogatories were conducted (which should include the front and back of the summons for interrogatories).
For more information, contact:
Recovery Fund Office | DPOR
9960 Mayland Drive, Suite 400
Richmond, VA 23233
(804) 367-1559
E-mail: