(Jan. 15, 2021) The Maryland Real Estate Commission is the regulatory agency that provides licenses to real estate brokers and agents.
Its office receives 400-500 consumer complaints annually.
Maryland Real Estate Commission is a special funded entity in which license fees fund its operations as well as the Real Estate Guaranty Fund.
Maryland Realtors have provided a good synopsis of the Guaranty Fund and it’s function.
The Guaranty Fund is in place to cover a consumer’s losses when a real estate licensee’s conduct results in a financial loss to a consumer. The consumer may seek recovery from the Guaranty Fund up to $50,000.
The Real Estate Guaranty Fund balance has varied over the years. In 2017, the Guaranty Fund balance was at $1.679 million.
Although the Maryland Real Estate Broker’s Act requires a licensee to reimburse the Guaranty Fund when the licensee’s conduct results in an award paid by the fund, the reality is that licensees who have harmed a consumer often fail to repay the fund.
The statute requires the fund to maintain a minimum balance of $250,000. Should the fund balance drop below $250,000, the commission is required to recapitalize the fund by imposing a surcharge on real estate license renewals.
The existence of the Real Estate Guaranty provides consumers with greater confidence to engage a real estate agent and complete the transaction.
The Guaranty Fund offers consumers an administrative remedy should a licensed real estate sales professional conduct him or herself in a manner that does not comply with Maryland law or regulation.
If not for the Real Estate Guaranty Fund, consumers would have no recourse other than a lawsuit against a negligent or intentional professional action by a licensed Maryland real estate broker or agent.
To function properly, the fund must remain solvent.
Lauren Bunting is a licensed Associate Broker with Atlantic Shores Sotheby’s International Realty in Ocean City.