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TREC has two recovery funds available to reimburse consumers who suffer damages caused by TREC license holders:  The Real Estate Recovery Trust Account and The Real Estate Inspection Recovery Fund. Consumers may apply for reimbursement from the Real Estate Recovery Trust Account after filing suit and obtaining a court judgment for damages against a licensed real estate broker, sales agent, or easement/right-of-way agent. Consumers who suffer damages caused by a licensed inspector may apply for reimbursement from the Real Estate Inspection Recovery Fund after filing suit and obtaining a court judgment awarding damages against the inspector. These recovery funds are "funds of last resort" that provide consumers with an avenue of redress when a license holder's conduct results in damages to the consumer and the license holder is unable to pay for those damages. If you receive a payment or settlement from a license holder or the license holder's insurance company, the payment or settlement will reduce the amount you may recover from the TREC recovery funds.

What are the filing requirements and payment limits?

Each recovery fund has different filing requirements and payment limits.  The filing requirements and payment limits for the Real Estate Recovery Trust Account are found in Subchapter M of Chapter 1101, Texas Occupations Code. The filing requirements and payment limits for the Real Estate Inspection Recovery Fund are found in Subchapter H of Chapter 1102, Texas Occupations Code.

Consumers who apply for payment from the Real Estate Recovery Trust Account may recover up to $50,000 per transaction, with a maximum of $100,000 per license holder for multiple transactions. Consumers who apply for payment from the Real Estate Inspection Recovery Fund may recover up to $12,500 per transaction, with a maximum of $30,000 per license holder for multiple transactions.

Do I have to file a complaint with TREC before applying for a recovery fund payment?

No. You do not have to file a complaint with TREC before you file an application for payment from one of the recovery funds. But you must file a lawsuit in court and obtain a judgment for damages against a TREC license holder before filing an application for payment from one of the recovery funds. Your lawsuit must be filed within 2 years from the date of the event giving rise to your claim for payment from the applicable recovery fund.  If you file a complaint with TREC, do not wait until the TREC complaint process is finished before you file suit in court.  Otherwise, you risk filing suit too late for your claim to be eligible for payment from one of the recovery funds.

If you choose to file a complaint, TREC will investigate your complaint and may assess an administrative penalty to be paid as part of the disciplinary action taken against a license holder. But the administrative penalty will be paid to TREC for deposit into to the recovery funds. It will not be paid to the person who filed the complaint.

Do I need to hire an attorney?

No. You do not need to hire an attorney to file an application for payment from one of the recovery funds.  Many consumers who suffer damages caused by a TREC license holder file suit in small claims court, obtain a judgment, and seek payment from the TREC recovery funds all on their own.  But some consumers do hire an attorney to do this for them.  If you choose to hire an attorney, you may seek payment of reasonable attorney's fees as part of your application for payment from one of the recovery funds. Payment for attorney's fees is subject to the applicable payment limits for each recovery fund.

What if I have more questions?

If you have more questions about filing a application for payment from one of the TREC recovery funds, please review the Recovery Fund Page on our website. You may also send an email to recoveryfund@trec.texas.gov to ask questions about the process. Please understand that TREC staff may not give legal advice, but we are happy to answer questions about the process.