Real Estate Licensing and Regulations

Licensing Requirements, Fees, and Regulations in Maryland Real Estate

Overview

• This chapter covers:
  • Licensing requirements
  • Fees
  • Licensing statuses
  • Renewal requirements, including continuing education
• Topics include duties and powers of the Maryland Real Estate Commission.
• Prohibited acts outlined in license laws.
• Requirements to receive and maintain a real estate license.
• Contributions made to regulating the industry by:
  • Statutory law: Title 17 (Maryland Real Estate Brokers Act)
  • Administrative law: COMR
• Information is crucial for passing the Maryland real estate exam.
• Provides guidance for proper conduct of real estate licensees.

Objectives

• Explain the role of the Maryland Real Estate Commission and the types of licenses they issue.
• List the requirements to obtain a real estate license in Maryland.
• Identify prohibited acts and additional regulations affecting the real estate industry in Maryland.

Key Terms

• Affiliate
• Administrative Law
• Associate Brokers
• Brokers
• Clock Hours
• Code of Maryland Regulations (COMR)
• Common Law
• Continuing Education
• Executive Director
• General Assembly
• Guarantee Fund
• Inactive Status
• Irrevocable Consent
• Maryland Real Estate Commission
• Nonresidential Property
• Pocket Cards
• Real Estate
• Reciprocity Agreements
• Red Flags
• Reinstatement
• Salespersons
• Statutory Law
• Summary Actions
• Title 17

History and Sources of Maryland Real Estate License Laws

• The Maryland Real Estate Brokers Act is designed to protect the public interest.
• Became effective in June 1939 and has been updated frequently.
• This law affects all work of real estate licensees and is a basis for much of this chapter.
• The Maryland Real Estate Broker Act appears as Title 17 in the Business Occupations and Professions Article of the Annotated Code of Maryland.
• The textbook refers to it as the Brokers Act and Title 17.
• Each book containing Maryland law is called an article, divided into chapters or titles.

Statutory Law vs. Administrative Law vs. Common Law

• Real estate brokerage is governed by:
  • Statutory law (Brokers Act/Title 17)
  • Administrative law (Code of Maryland Regulations - COMAR)
• Regulations are enacted and enforced by the Maryland Real Estate Commission, which is within the executive branch of the government.
• The Maryland Real Estate Brokers Act was enacted by the legislative branch (General Assembly).
• Statutory law = legislative law; COMAR = administrative law.
• Common law also applies to real estate brokerage in Maryland.
• Common law is unwritten law based on court decisions.
• Found in volumes of court decisions and is used when:
  • No relevant law exists.
  • An existing law is challenged as unconstitutional.
  • Ambiguity or uncertainty makes a law difficult to apply.
• Common law consists of rules and decisions handed down by judges.

Modernizing Laws

• Judges may modernize older laws that no longer make sense.
• This contrasts with strict construction, which takes laws at face value and refers to the original intention of their writers.
• Example: The US Supreme Court in 1965 held that the Civil Rights Act of 1866 still applied literally.
• Statute laws are voted into law by a legislative body, while common law is handed down by judges.
• Decisions made by courts of appeal are binding on lower courts within their judicial area.
• The higher the court of appeal, the more numerous the lower courts affected by the decision.

The Maryland Real Estate Commission

• One of the largest licensing boards within the Maryland Department of Labor.
• Adopts and enforces regulations to implement the Brokers Act (Title 17).

Definitions of Terms in Title 17

• Real estate broker: An individual who provides brokerage services for consideration, including:
  • Buying, selling, exchanging, or leasing properties.
  • Helping to locate properties.
  • Dealing with leases or options.
  • Promoting the sale of real estate.
  • Subdividing and selling land.
  • Acting as a consultant for these activities.
• Persons: Generally includes individuals, receivers, trustees, guardians, personal representatives, fiduciaries, etc.
• Only natural persons (individuals) may hold a real estate license.
• A broker's license may show the company name under which the broker operates (broker's designated name).
• Branch offices are issued certificates rather than licenses.
• Timeshare licenses are issued to brokered firms dealing in timeshares.
• Commission (capitalized and italicized) refers to the Maryland Real Estate Commission.
• Licensee (italicized) refers to any person licensed by the commission.

Licenses and Certificates Issued by the Commission

• The commission issues three levels of licenses for individuals:
  • Broker's license
  • Associate broker
  • Salesperson license
• It also issues branch office certificates and registers timeshare developers.
• Licenses may be kept on inactive status for up to three years, after which they expire.
• Expired licenses are held for three years from expiration, during which they may be reinstated.
• Persons with inactive or expired licenses may not perform real estate brokerage acts or receive compensation.
• Each license level has subtypes:
  • Broker: resident, nonresident, reciprocal, or temporary (commercial only)
  • Associate broker/salesperson: resident, nonresident, and reciprocal
• Maryland has reciprocal licensing agreements only with Pennsylvania and Oklahoma.
• Some associate brokers and salespersons may be registered to manage branch offices.
• To have an active license, a salesperson or associate broker must be affiliated with and under the authority of a broker.
• Individuals affiliate with brokers as employees or non-employees.
• Most Maryland affiliates are in a non-employee relationship.
• Affiliates are subject to supervision and control by their brokers but can meet IRS requirements for qualified real estate agents (statutory non-employee).
• This means they are treated as self-employed for income tax purposes.
• Brokers do not withhold federal or state income taxes or pay Social Security or Medicare assessments for statutory non-employees.
• Affiliates pay their own taxes.
• To be recognized as a qualified self-employed real estate agent, affiliates must:
  • Be licensed and have an active license.
  • Receive money from production rather than hours worked.
  • Act pursuant to written contracts within a brokerage firm stating that for federal tax purposes, they will not be treated as an employee.
• Affiliate refers to a licensed associate broker or salesperson.
• Associate brokers have met the education, experience, and testing requirements for brokers but provide services under a broker.
• Salespersons aid affiliated brokers in providing brokerage services.
• Real estate is defined as any interest in real property anywhere, including condominiums, timeshares, fee estates, and life estates.
• State (uncapitalized) refers to any state in the United States and its territories or DC.
• State (capitalized) refers to the state of Maryland.
• Department refers to the Department of Labor.
• Secretary refers to the chief executive of that department.

Persons Not Subject to the Broker's Act

• Certain persons can perform real estate brokerage activities without a license but are governed by other laws:
  • Persons acting under a judgment of a court order.
  • Public officers performing the duties of their offices.
  • Landlords and owners of real estate unless their primary business is brokerage services (For Sale By Owner).
  • Persons engaged in a single transaction under a power of attorney (For Sale By Owner).
  • Auctioneers selling real estate at public auctions.
  • Persons acting as receivers, trustees, personal representatives, or guardians (typically one transaction).

Persons Who Must Conform to the Broker's Act

• These individuals don't need a license but ARE subject to the Broker's Act:
  • Financial institutions selling property acquired through foreclosure.
  • Builders in the rental or initial sale of homes they constructed and their sales representatives (must be registered with the Homebuilder and Homebuilder Sales Representative Registration Unit).
  • Agents of a licensed broker or owner of real estate managing or leasing that real estate for that broker or property owner.
  • Persons negotiating the sale, lease, or transfer of a business when the sale does not include any interest in a property other than the lease for the property where the business is gonna operate.
  • An owner who subdivides and sells no more than six lots of their own unimproved property in any one calendar year.
  • Lawyers - currently, a lawyer can only share in a real estate commission if they are licensed to practice law in Maryland and the broker services were provided to a party that the attorneys were assisting in a regular practice of law (after 2016 Legislation).

The Maryland Real Estate Commission (MREC)

• Part of the Department of Labor.
• Consists of nine members appointed by the governor with advice and consent of the senate.
  • Five members hold real estate licenses:
    • One from the Eastern Shore.
    • One from the Baltimore Metropolitan Area.
    • One from Baltimore City.
    • One from Southern Maryland.
    • One from Western Maryland.
    • Must have held a Maryland real estate license for at least ten years.
    • Must have lived in the area from which they are appointed for at least five years.
  • Four members are consumer members:
    • Must not have had an ownership interest in or received compensation from an entity regulated by the real estate commission in the year before their appointment.
    • May not be licensees.
• Membership terms begin June 1 and end four years later.
• Members may be removed before the end of their term by the governor for incompetence or misconduct.
• Each year, members elect a chairperson from among themselves.
• The chairperson is covered by a surety bond.
• The commission meets every month, with a majority of members constituting a quorum.
• Meetings are open to the public.
• The commission has adopted bylaws for conducting meetings and regulations for hearings and licensing.
• With ten days' advance written notice, any member of the public can speak before the commission.
• The commission's executive director is appointed by and serves at the pleasure of the secretary (not a member of the commission).
• The executive director is a state employee covered by a surety bond.
• They attend and participate in monthly meetings, direct day-to-day operations, and supervise office staff and field inspectors.

Surety Bonds

• A financial guarantee typically required by state licensing authorities ensuring that the agent or broker will fulfill their responsibilities under law and regulations.
• If violated, the surety bond can be used to compensate those harmed.

Duties and Powers of the Real Estate Commission

• Primary duty: Administration and enforcement of the Brokers Act through the licensing process.
• Powers include:
  • Investigating complaints of unlicensed brokerage activities.
  • Investigating complaints about the licensee's behavior.
  • Conducting hearings and administering oaths.
  • Issuing subpoenas for attendance of witnesses or production of evidence.
  • Taking depositions.
  • Seeking injunctions.
• The commission adopts, maintains, and enforces general regulations and a code of ethics.
• The code of ethics sets the standard of conduct for all individuals licensed in Maryland.
• The commission must investigate any written sworn complaint alleging that an unauthorized person has provided real estate brokerage services.
• The commission has statutory authority to hold hearings on alleged violations and to impose penalties:
  • Not to exceed 5,000 for the offense, 15,000 and/or two years in prison for the offense, and 25,000 and/or three years in prison for the offense.
• The commission also:
  • Issues, renews, suspends, and revokes licenses.
  • Orders investigations and holds hearings.
  • Reprimands and/or fines licensees who violate laws and regulations.
  • Forwards license fees to the controller and distributes funds to the state real estate commission fund.
  • Collects fines and forwards them to the general fund of the state of Maryland.
  • Submits an annual report to the secretary.
  • Certifies the license status and qualifications of any person upon request and required fees.
  • Approves the content of educational courses for licensing and continuing education.
  • Adopts regulations and a code of ethics to implement Title 17.
  • Convenes hearing boards or panels of three members (at least one consumer and one licensee).
  • Maintains and administers a guaranteed fund to reimburse members of the public (up to 50,000) for actual losses caused by licensees and their employees.

Requirements to Obtain a Real Estate License

Broker's License

• Good character and at least 18 years old.
• Complete a 135-hour course in real estate, including three hours of ethics.
• Have been licensed as a real estate salesperson actively and lawfully for at least three years.
• Pass both portions of the license exam.

Associate Broker

• Same requirements as a broker.
• Be at least 18, complete a 135-hour course, licensed for at least three years, and pass both portions of the exam.

Salesperson

• Good character and reputation and at least 18 years old.
• Successfully pass the 63-hour pre-licensing course and ethics training provided.
• Pass both portions of the pre-licensed exam (PSI exam).
• Obtain a commitment from a broker to accept affiliation as a salesperson.

Usual Steps Leading to a License

• Education (pre-licensing course).
• PSI exam.
• Applying for the license.
• Applicants must successfully complete the pre-licensed education requirement.
• Passing both portions of the exam needs to occur within one year after completing the class.
• You must apply for your license within one year after passing the exam.
• If the time frame is missed, the class must be taken over again.
• Licenses cannot be denied based solely on a prior criminal conviction if sentencing/probation was completed more than seven years ago.

Deadlines

• The deadline for the candidate to pass both portions of the exam is no more than one year after completing the course.
• Any partial passing test results become invalid, and the class becomes invalid.
• Deadline for a candidate to apply for their salesperson license is no more than one year after passing both portions of the PSI exam.
• Passing test results become invalid after a year.

Fees

• Salesperson's license fee: \$70 + \$20 to the guaranteed fund = \$90 initial fee.
• Renewal (every two years): \$70.
• License History Fee: \$25
• Address Change from Broker: \$5.
• Name Change: \$25.
• Reactivate License: \$25.
• Reinstate License: \$150.
• Transfer from one broker to another: \$25.
• Timeshare Registration: \$100.
• Bad Check: \$35.

Nonresidents

• The commission issues licenses only to those nonresident applicants who filed with the commission a signed statement of irrevocable consent.
• Salesperson, associate broker, and broker applicants who are not residents of the state of Maryland must submit to the real estate commission their irrevocable consent.
• This allows them to be served with official documents without the survey having to travel out of state to present them.

Reciprocity

• To facilitate transactions, it's only important from other states seeking to buy, rent, or sell property in Maryland.
• Under the terms of a license agreement, the broker act requires the following:
  • Each state recognizes the previous education experience and examination of applicants for any licensed class authorized in the applicant's home state is satisfying requirements for that state.
  • The applicant must submit a consent of service of process.
  • The applicant verified that they have agreed and complied with all the laws for the state where they're seeking reciprocal licensure.
  • That applicants other than brokers provide certification from their broker that the broker is currently licensed and will actively and personally supervise you in your broker services.
  • That neither state requires any additional continuing education to renew your license, that applicants furnished to Maryland certificate of licensors or records of good standing from the state where they are applying.
  • That each state required that brokers holding reciprocal license who later open up a principal place of business in the state of Maryland that granted them the reciprocal license, promptly notified the state and obtain a standard non license within ninety days after establishing that place of business.
  • That applicants for a standard nonresident license be required to pass the state portion of that state that's granted the reciprocal.
• Maryland has signed reciprocity agreements only with Pennsylvania and Oklahoma.
• They proceed with great care to establish reciprocity authorized in 02/2006.

Pocket Cards and License Certificate

• License includes name, designated name of broker, expiration date, and license registration number.
• A small pocket card for wallet use is also provided.

Unlicensed Activity

• Performing without a license is a violation of Title 17.
• Associate brokers and salespersons may never provide real estate broker services in their own name or in the name of any broker who they are not affiliated with.
• Every time you advertise, your broker's name must be with your name.
• Salespersons and associate brokers on inactive status have no broker and cannot provide broker services.
• Performing any act of real estate brokerage while on inactive status is a violation of law, which is also a misdemeanor punishable initially by a fine as much as 5,000 and one year imprisonment or two years imprisonment and 15,000 for the offense, three years imprisonment, 25,000 for the or subsequent offense.

Reinstatement after Nonrenewal

• Possible within three years following the expiration date.
• Requires:
  • Proof of meeting all continuing education requirements for the period since the license expired.
  • Payment of all past due renewal fees.
  • Payment of a \$150 reinstatement fee.
  • Meeting the requirement of good character and reputation.
• Neither timely nor in the renewal will affect the part of the real estate commission to bring charges against you even if your life still expired.

Transfer of Affiliation

• Requires consent from the new broker and notification to the current broker.
• There is a \$25 fee to have the license changed.

License Term, Transfer, and Renewal

• License expiration date reminders and renewal application forms are emailed to licensees at least thirty days before expiration.
• Notifies of the date on which it's expired, the date by which the commission must receive your renewal application, and the renewal fee.

Continuing Education

• Measured in clock hours, with credit only for approved courses of not less than 1.5 hours and no more than 6 hours.
• One hour is defined as 50 minutes of instruction in a 60-minute hour, giving you at least 10 minutes of break to go to the bathroom.
• Completion of the specified number of continuing education classes, including the mandatory topics, is required for renewal of any level of license.
• The standard requirement for all level of license is fifteen hours of approved instructions made up of:
  • Three hours of local, state, and federal legislative regulatory update.
  • One and a half hours of fair housing.
  • Three hours of the code of ethics.
  • Three hours of your broker relationship.
• The other four and a half hours can be in any class approved by the real estate commission.
• If you're gonna be a team leader or a branch manager or even a broker, they're required to take three hours of supervision.
• The three hours of brokerage relationship and disclosure, this course was created by the Maryland Real Estate Commission and is taught by instructors certified by the Maryland Real Estate Commission.
• All required continuing education must be completed before one license can be renewed.
• A person whose license has expired for nonrenewal may normally apply for reinstatement of that license at any time within three years after their license expired at a cost of a \$150.
• However, those who have made false claims of educational completion may be given one month to complete the missing education requirement.
• They must also pay a \$1,500 penalty for the false application plus a \$150 reinstatement fee.
• Their names, violations, and their fine are then displayed on a commission's website for several years.
• Approved courses may be presented by the Maryland Realtors or the member boards, such as the real estate brokers of Baltimore City or any other professional association, and there are some other educational institutions that have been approved by the Maryland Higher Education Commission.
  That education provider has ten days to upload the reports of your continuing education hours earned to the real estate commission's database.

Inactive Status

• The commission will place the licenses of associate real estate brokers and real estate sales persons into inactive status when they're no longer affiliated with a licensed broker, and their license certificate and pocket cards have been returned to the commission.
• A license may be retained by the commission as inactive for no more than three years.
• A licensee whose license is on inactive status may not provide real estate broker services through that license and are forbidden from accepting referrals.
• An inactive licensee is not affiliated with any broker and may not be compensated for any real estate brokerage firm, and you cannot be paid by a referral company.
• Renewal of this license is still needed to remain inactive rather than expiring at the missed renewal date.
• Renewal and reactivation are completely different processes.
• Reactivation is when a license is moved from inactive back to active.
• If an inactive license does not get reactivated by the end of the allowed three-year period, it automatically expires.
• The commission will reactivate the license of real estate brokers on inactive status.

Licensure and Death of a Broker

• Contract between the buyer and seller no. No. No. No. No. No. I'm not buyer and seller. Between the listing agreement between the seller and the broker, The buyer and the broker may terminate or may not terminate if the broker dies or become incapacitated or if they die becoming incapacitated.
• On the death of a licensed real estate broker, any adult member of that family can carry on that business for six months to shut it down, so it may not terminate the transaction.
• We don't need six months to close a deal. No no longer than forty five days the most.
• In order to do this, we gotta send the commission, the brokers, license, pocket cards, and all that other stuff.
• Before the end of the six month period for carrying on the business of the deceased broker, an individual may qualify for and get that broker's license if:
  • that person is a member of the broker's immediate family, have been continuous license at real estate salesperson for the past three years.
  • They passed the broker's exam.
  • Then they surrender their own license.
• The person receiving the reissued license of the deceased broker can hold and use their license for as long as four years without taking a hundred and thirty five hour course.
• But if they wanna continue on, they have to take a hundred and thirty five hour course.
  • The license and certificate and pocket cost of an affiliate must be returned by the commission, by their broker on request of the affiliate, like, I'm out or on the death of the affiliate or after a hearing before the real estate commission and finding out that their license is gonna be suspended or revoked, the broker has to send your license back to the commission. And real estate brokers are required to surrender promptly on the man. Any such person's license that may be in their possession or control. For you to do so will be grounds for disciplinary action for the broker. In event that the affiliate is terminated or discharged, the broker must immediately mail to the licensee at their last known address a notice of their termination. They have to submit that notice to the real estate commission, including the letter that they sent to the licensee and their license.

Processing of Complaints

• The commission has a website with a downloadable form for submitting complaints against licensees.
• Upon receiving a completed complaint form, the commission sends a copy to the broker of the company involved, with a letter stating that the broker must respond in writing with a full explanation of the allegations and the broker's recommended action.
• Failure to respond may be grounds for disciplinary action.
• Complaints must be in writing and state specifically the facts on which the complaint is based and may be accompanied by evidence.
• The licensee's response to the allegations must be submitted to the Maryland Real Estate Commission in twenty days.
• After reviewing the complaint and response, the commission may refer it for investigation if a violation appears to have occurred.
• A complaint not referred for investigation is considered dismissed.
• Within thirty days of dismissal, any commission member can file an exception disagreeing with the dismissal; otherwise, the dismissal is final.
• The final decision means the aggrieved party can appeal to the appropriate court.
• If the commission determines that grounds exist for disciplinary action, the matter will be referred for a hearing.
• Complaints not referred for a hearing after investigation are dismissed.

Hearings and Notices

• Before taking final action, the commission provides an opportunity for a hearing before the commission or hearing board.
• This opportunity also applies before denying a license application.
• At least ten days before the hearing, notices are served personally on the individuals alleged of the complaints and is sent by certified mail to their last address.
• For licensees other than brokers, the commission must notify the broker with whom the licensee is affiliated.
• Individuals can have attorneys represent them, but this does not mean they can fail to appear and just send the attorneys.
• If the individuals fail or refuse to appear, the commission will hold the hearing anyway without their presence.
• Meetings are open to the public.

Real Estate Hearing Board (Panels)

• The commission establishes two or three real estate hearing boards (panels), each consisting of three commission members.
• At least one member must be a consumer, and one must be a licensee.
• The boards meet privately to review complaints and consider whether they provide a basis for a disciplinary hearing or claims against the guaranteed fund.
• In referral of cases, the commission or one of its hearing panels may order a final public hearing or any complaint that has been filed with the commission or on any other matter for which a hearing may be required.
• But before deciding to hold the hearing, the panel will meet privately to review the complaint and consider with whether they provide a basis for disciplinary hearing or claims against the guaranteed fund to determine what further action to take.
• They'll meet publicly to hear the licensee's responses and defenses against the complaint and then decide whether to authorize punitive actions against them.
• These hearing boards exercise the same powers as and conduct hearings for the commission and report their decisions and actions to the commission.
• The panel specifically advises the commission of any action that they take against licensees involving monetary laws, misappropriation of funds, and fraud.

Types of Hearings

• Judicial hearings: Held in a court.
• Applications for license.
• License revocation or suspension.
• Claims against the guaranteed fund.

Dismissal of a Complaint

• The complainant and licensee are notified in writing that the dismissal of a complaint is not reviewed further.
• Other complaints, subjectivly, on the same facts are similarly dismissed.

Summary Actions

• Taken before holding a hearing to protect the public quickly and imminently against loss, and then they're followed up by hearings for which formal or timely notice is given.
• Summary Suspension: Having your license suspended or revoked even before having a hearing.

Revocation after Actions of Other Agencies

• The commission may summarily order the revocation of a license if:
  • A licensee has been convicted in a court of law of a violation of this title and that conviction is final and the period for appeal is expired.
  • The license of any nonresident licensee may be revoked if the real estate regulatory agency of the state where the licensee, is a resident revoke their license issued by the state and certifies order of the revocation.
• The commission gives the licensee written notice of revocations and the findings on which they're based.
• After revocations are effective, the commission grants the licensees whose licenses have been revoked an opportunity to be heard promptly before either the commission or hearing board.
• The commission may elect not to revoke the license until after the licensees are given opportunities for hearing.
• In any hearings held because of convictions, revocation by another agency, the commission considers only the evidence of whether or not there is the alleged convictions or revocations in fact occur.

Summary Suspension for Trust Funds and other violation.

• The commission may summarily order the suspension of a licensee if they fail to account promptly for funds held in trust, or on demand, fail to display to the commission all records and books, or if they've been convicted of a crime or fail within ten days after conviction or within ten days following release from incarceration.

Judicial Review

• A party who strongly disagrees with the final decision of the commission may appeal to a circuit court.
• Upon appeal, the court may set a bond not to exceed \$50,000, and delay the suspension of revocation.
• The bond money would be for the use and benefit of a member of the public who might also subject suffer financial loss. This is given this law acquaintance.

Notice of Revocation or Suspension

• Once a licensee's license has been suspended or revoked, the real estate commission's gonna tell the whole world.

The Real Estate Guaranteed Fund

• Exists to reimburse members of the public for actual financial losses caused by real estate licensees and their unlicensed employees.
• The maximum reimbursement for any claim is \$50,000.
• The commission deposits all money collected for the guaranteed fund with the state treasurer.
• The state treasurer invests that money and credits those monies back to the guaranteed fund.
• Initial assessment: Salesperson pays \$70 (license) + \$20 (to the fund) when you apply for initial license.
• If the amount in the guaranteed fund falls below \$250,000, the commission assesses all individuals holding a license fee, which will be payable at your license renewal, enough money to return the guaranteed fund to that minimum level.
• In 2018, legislation gave the real estate commission the authority to transfer up to a half a million dollars from the general fund surplus to the guaranteed fund when it comes close to falling below \$2.50.

Claims Against the Fund

• A person may recover compensation from the guaranteed fund only for the actual financial losses.
• Claims must be based on acts or omissions that occurred in the provision of real estate broker services by licensees or unlicensed employees of a licensed real estate broker.
• Claims must involve transactions that relate to real estate located in Maryland and be based on actual omissions in which money or property is obtained from a person by theft, embezzlement, false pretenses, forgery, or an act that constitutes fraud or misrepresentation.
• Example: When managing a rental property, the licensee uses that tenant security deposit for their own office expenses, leaving the landlord to refund the client and the landlord's own expense.
• A claim against the guaranteed fund must be in writing and under oath.
• It must state the amount of lost claim, state the facts on which the claim is based, and be accompanied by some documentation.
• In any claim hearing, the burden of proof is on the claimant to establish the validity of the claim.
• A person may not recover from the guaranteed fund:
  • Any loss that relates to the purchase of an interest in a limited partnership that invests in real estate or a joint venture that promoted by real estate licensee for the purpose of investing in real estate or by the purchase of commercial paper secured by real estate.
• The claim against the guaranteed fund may not be filed by the spouse or the personal representative of the spouse of the alleged, individual that should be responsible for the act or omission.
• Any claim must be filed with the commission within three years of the law discovery of the law.
• Statute of Limitations: Within 3 years, per the contact, to enforce simple contracts.

Notice to Buyer

• Real estate brokers must include in each sales contract a written notice that buyers are protected by the guaranteed fund in an amount not exceeding \$50,000.
• Although only buyers are mentioned in this notice, sellers can also submit claims to the guaranteed fund.
• Action, paragraph number 43, Guarantee fund. Notice to the buyer. The buyer is protected by the real estate guaranteed fund of the Maryland Real Estate Commission, and that's for losses in an amount not exceeding \$50,000 for any claim.

Action by Commission on a Claim

• Upon receiving claim, the commission must act promptly by forwarding copies to licensees and unlicenses to be responsible, and it's gonna also send it to the brokers.
• Will require a written response within ten days from each of those individuals concerned (Shorter than the usual twenty days).
  They're gonna review the claim and then the responses to the claim and conduct an investigation.
• If a claim is \$5,000 or less, the commission through a designated staff member, such as the executive director may issue a proposed order to either pay or deny the claim, but both the claimant and the licensee will receive copy of this order.
• Within thirty days, either the claimant or the licensee may request a hearing or file a written exception to that order. And if required requested, the commission must schedule a hearing.
• The misdemeanor penalty for knowingly making a false statement, a material misstatement, a fact about a guaranteed fund matter is a fine and or imprisonment, so the procedure has to be in a court of law because the commission has no power to impose a sentence.

Payments by the Guaranteed Fund

• If the claim proves valid, the commission orders its payment by the guaranteed fund.
• The amount of compensation recoverable from the guaranteed fund is limited to the actual monetary loss incurred by the claimant, and this payout can never be more than \$50,000 for any one claim.
• The amount paid may not include any losses other than those from the original transaction and cannot include any commissions or any attorney fees.
• Payment is not made until the time for seeking a judicial review is over or any judicial stay has expired.
• The commission will order payment of the claim in the order in which they were awarded.

Reimbursement of the Guaranteed Fund