The Mississippi Real Estate Recovery Fund
Mississippi maintains a Real Estate Recovery Fund to compensate consumers harmed by licensee misconduct when they cannot collect from the licensee. This chapter explains how the fund works and its effect on the responsible licensee.
Purpose of the Fund
The Mississippi Real Estate Recovery Fund reimburses a member of the public who obtains a final court judgment against a licensee based on conduct that violates the license law, such as fraud, misrepresentation, or conversion of trust money, and who is unable to collect the judgment. The fund is a consumer-protection backstop, not a substitute for the licensee's own liability.
Claims and Limits
A claimant must generally exhaust reasonable efforts to collect the judgment before applying to the fund, and the statute caps the amount payable per transaction and, in the aggregate, per licensee. The Commission reviews claims and pays valid ones from the fund. These statutory limits mean the fund does not necessarily make a consumer whole for every loss.
Effect on the Licensee
When the fund pays a claim on a licensee's behalf, that licensee's license is automatically suspended or revoked until the licensee repays the fund in full, typically with interest. This gives the fund a strong incentive for licensees to deal honestly and to satisfy judgments themselves. A responsible broker should understand that firm-level misconduct can trigger a fund payout and license suspension.