The Maryland Real Estate Commission (MREC) is the regulatory agency that provides licenses to real estate brokers and agents. Their office receives hundreds of consumer complaints annually. MREC is a special funded entity in which license fees fund MREC operations as well as the Real Estate Guaranty Fund.
Maryland Realtors have provided a good synopsis of the Guaranty Fund and its function. The Guaranty Fund is in place to cover a consumer’s losses when a real estate licensee’s conduct results in a financial loss to a consumer. The consumer may seek recovery from the Guaranty Fund up to $50,000. The Real Estate Guaranty Fund balance has varied over the years. In 2024, the Guaranty Fund balance was at $1.3 million.
Although the Maryland Real Estate Broker’s Act requires a licensee to reimburse the Guaranty Fund when the licensee’s conduct results in an award paid by the Fund, the reality is that licensees who have harmed a consumer often fail to repay the Fund. The statute now requires the Fund to maintain a minimum balance of $250,000. Should the Fund balance drop below $250,000, the Commission is required to recapitalize the Fund by imposing a surcharge on real estate license renewals. All new real estate licensees contribute $20 to the fund, but no further contribution is collected upon renewing licensees.
The existence of the Real Estate Guaranty provides consumers with greater confidence to engage a real estate agent and complete the transaction. The Guaranty Fund offers consumers an administrative remedy should a licensed real estate sales professional conduct him or herself in a manner that does not comply with Maryland law or regulation. If not for the Real Estate Guaranty Fund, consumers would have no recourse other than a lawsuit against a negligent or intentional professional action by a licensed Maryland real estate broker or agent. To function properly, the fund must remain solvent.
Lauren Bunting is a Broker with Keller Williams Realty of Delmarva in Ocean City, Maryland.
