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Real Estate Exam
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The correct answer is B. The Consumer Recovery Account is a last-resort fund for consumers harmed by a licensee's qualifying misconduct. Under Business and Professions Code §10471(a), the claimant must hold a final judgment, which can include a criminal restitution order or a confirmed arbitration award, based on the licensee's fraud, misrepresentation or deceit made with intent to defraud, or on conversion of trust funds, arising directly out of a transaction in which the licensee performed acts that required a license. The claimant then applies to the Department of Real Estate within one year after the judgment becomes final and must show the asset searches made and diligent collection efforts against everyone liable (§10471(b), (c)). The account is not insurance and does not pay on a complaint alone. So the account becomes available after a qualifying judgment that the victim cannot collect, which is what choice B says. A: A verified complaint to the commissioner can start discipline, but it does not make the account pay. C: The account does not refill a broker's depleted trust account. Payments go to the injured person under a qualifying judgment. D: The account does not pay a licensee's defense costs. It pays victims, within limits, after a judgment.

Exam tip
Think of the Consumer Recovery Account as a post-judgment, last-resort remedy, not a complaint desk or insurance. The checklist is: licensed activity, qualifying misconduct, a final judgment, diligent collection that failed, and an application to the DRE within one year. Limits are $50,000 per transaction and $250,000 per licensee.