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Real Estate Commission approves two guarantee-fund payouts, including $25,000 buyer claim
Summary
The Real Estate Commission approved two claims from its guarantee fund: a $25,000 payment related to a default judgment in a home-sale disclosure case and a $1,405 payment for an unpaid security-deposit judgment. Commissioners discussed unsatisfied writs of execution and potential enforcement against brokers and salespeople.
At a meeting of the Real Estate Commission, commissioners approved two guarantee-fund claims: $25,000 for a buyer’s judgment in a disclosure case and $1,405 for a security-deposit judgment.
The guarantee fund pays claimants when court judgments against licensed brokers or salespeople cannot be collected. Commissioners reviewed court judgments, writs of execution returned “unsatisfied,” and supporting documents before voting to authorize the payouts.
Commission staff said the first application came from a purchaser, identified in the record as Mr. Layton, who obtained a default judgment after the seller and a broker failed to respond to pleadings. Staff described the central allegation as a material nondisclosure in the property condition report: the condition report listed the property as served by public sewer when in fact it was on a failing septic system. Elizabeth, Consumer Protection Department staff, summarized the department’s position: “The application is for the full $25,000 authorized from the guarantee fund.” The court entered a default judgment against the broker defendant for damages related to the failing septic system; state-marshal writs of execution returned unsatisfied, indicating no collectible assets.
On that claim commissioners voted to approve the full $25,000 cap available under the guarantee fund for a single application. Staff noted the judgment itself exceeds the amount requested but that the guarantee fund’s maximum per claim is $25,000.
The second claim involved a tenant dispute. Commission staff said the case originated as a leasing dispute in which a landlord and licensed real-estate salesperson—identified in the file as Michael Ma—failed to return a full security deposit. Staff explained the judgment included the $1,300 award plus filing fees and that the court-authorized collectible amount available for payment from the guarantee fund was $1,405 (the $1,300 award plus a $105 fee). As staff put it, “what the department and the real estate commission has authorized is only what the court has said is collectible.” Commissioners approved payment of the court-authorized amount.
Commissioners discussed enforcement follow-up in both matters. Staff said the guarantee-fund payment does not by itself revoke a license; licensees who receive a guarantee-fund payment must reimburse the fund to renew a license, and the department is conducting separate investigations into potential discipline. In the Layton case the broker had not responded to court proceedings and had not paid toward the judgment, and staff said the broker’s license remained on the record but that payment to the fund would be sought as part of license-renewal or enforcement processes.
Claimants and their representatives were told staff will follow up with next steps and provide claimants with information about reimbursement and any related enforcement action.
The commission’s formal actions on the two claims were recorded as votes approving payment from the guarantee fund.
