The successful prosecution of a lawsuit, where only money is involved, is frequently less than one-half the battle. The successful plaintiff may also have to defend an appeal. If plaintiff prevails on appeal, plaintiff still must still collect. If the defendant is insolvent, collection may be impossible.
If the defendant is licensed by the California Department of Real Estate, there is hope for at least partial recovery on the judgment from the Consumer Recovery Account. If the judgment contains specific findings and is the result of intentional fraud, misrepresentation, or deceit, or conversion of trust funds in a transaction requiring a real estate license – plaintiff may be able to look to the recovery fund for satisfaction up to $50,000 per transaction.
In addition to a final judgment, plaintiff must make a reasonable search for the licensee’s assets and attempt to collect from the licensee as well as all other parties that may be liable to the plaintiff. All procedural requirements set forth in Business and Professions Code § 10471 et seq. must also be followed. An application for payment must be submitted to the Department within one year after the judgment becomes final.
If you have a claim against a person licensed by the Department of Real Estate, you should always consider the possibility that you may have to look to the real estate recovery account for payment. If your claim involves intentional fraud, misrepresentation, or deceit or the conversion of trust funds you will want the arbitration award or judgment to include the necessary findings so that recovery from the account is possible, and that you have included in your initial proceedings all parties who might be responsible to you.
If you need to make a claim against the recovery fund, forms and instructions can be found here.