Florida Real Estate Recovery Fund: Coverage, Exclusions, and Exam Examples

The Recovery Fund can reimburse certain qualifying losses caused by a real estate licensee, but it does not pay every part of every judgment. For exam questions, identify the claim type, the kind of damages, and the applicable limit.

Jump to: Ordinary claims · Excluded amounts · Escrow-order exception · Limits · Practice

Start with the ordinary claim

Under section 475.482(1), the fund addresses qualifying monetary harm from a Florida brokerage transaction involving a person acting solely as a real estate licensee with a current, valid, active license. The underlying act must violate section 475.25 or 475.42. It is not general insurance for a disappointing investment or a seller's breach.

Section 475.483 sets the conditions: generally a final judgment against the individual licensee, required notice, collection efforts, credit for other recoveries, and compliance with claim deadlines. The statute allows specified exceptions. A claim generally must be made within two years of the act or its discovery, with a four-year outside limit from the act.

Disqualifying situations include a claim by the judgment debtor's spouse; a participating broker or associate acting as single agent or transaction broker; a licensee dealing for their own account; an inactive or invalid license at the time; or a judgment only against the brokerage business entity. Read the statute for the complete conditions.

Which amounts are excluded?

The ordinary payment rule is in section 475.484(1)(a). A court awarding an amount does not automatically make that amount payable by the fund.

Do not miss the escrow-disbursement-order exception

Sections 475.482(2) and 475.483(3) address a licensee who follows a qualifying FREC escrow disbursement order and is later sued over the disbursement. Specific conditions apply, including compliance with the order, notice to the commission, and diligent defense of the lawsuit. This special route provides for reasonable attorney's fees and court costs. It is why “the fund can never pay legal fees” is too broad.

Keep the payment limits separate

• $50,000 per transaction in the aggregate, regardless of the number of claimants or parcels.
• $150,000 per individual licensee in the aggregate.

An ordinary payment is limited to the eligible unsatisfied compensatory judgment and the applicable caps. Payment on an ordinary claim also triggers automatic license suspension until repayment with interest, subject to the statute's terms. Do not automatically extend that consequence to the separate escrow-order route.

Try it yourself

1. Assume every eligibility condition is met, no other limit has been used, and $32,000 of compensatory damages remains unpaid. The judgment also includes $8,000 punitive damages and $2,000 interest. What amount is potentially payable on the ordinary claim?
2. Two eligible claimants from one transaction seek $40,000 each. Does each receive a separate $50,000 transaction allowance?
3. Is “attorney’s fees can never be paid from the fund” a sound general rule?

Answers and explanations

1. $32,000. The punitive award and interest do not become eligible merely because they appear in the judgment.
2. No. The transaction limit is shared; it is not multiplied by the number of claimants.
3. No. Check whether the special escrow-disbursement-order provision applies.

Florida statutory references checked October 20, 2026. This lesson explains exam concepts; an actual claim must satisfy the statutory process.

Keep studying

Review Florida escrow-deposit deadlines. Return to the exam-prep guide.

Need a step explained? Submit a support request with your course, lesson or page, practice-question wording, and the part you find confusing. These are original study exercises.