Alabama License Law
The Alabama Real Estate Recovery Fund provides compensation to:
ALicensed agents who lose money on transactions
BMembers of the public who suffer financial loss due to a licensee's fraudulent or dishonest acts✓ Correct
CBrokers whose offices are damaged by natural disasters
DBuyers who overpay for property
Explanation
The Alabama Real Estate Recovery Fund compensates consumers who suffer actual financial losses caused by a licensee's fraudulent, dishonest, or negligent conduct. Recovery is subject to maximum limits per claim.
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Key Terms to Know
Agency
A legal relationship in which a licensee (agent) acts on behalf of a principal (buyer or seller) in a real estate transaction.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Title InsuranceInsurance protecting against financial loss from defects in a property's title that existed before closing but were unknown at the time of purchase.
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