law

Connecticut Real Estate Guaranty Fund

A fund under §§20-324a to 20-324k that compensates people harmed by a licensee's embezzlement, false pretenses, forgery, fraud, misrepresentation, or deceit. Each licensee pays a one-time $20 fee on applying. The claimant must first obtain a final judgment, arbitration award, or administrative decision, show collection failed, and apply within two years. Recovery is capped at $25,000 per transaction, and the fund ceiling is $500,000. The licensee cannot be relicensed until the fund is repaid with 10% interest.

Exam tip: '25 per deal, 500 in the pot, 20 to join, 2 years to file.' The fund pays only for dishonesty, not ordinary negligence or contract disputes.
Example: A salesperson pockets a $30,000 deposit and the buyer's judgment goes unpaid. The buyer can recover at most $25,000 from the fund.

1. What is the maximum the Connecticut Real Estate Guaranty Fund will pay in connection with any one real estate transaction or claim?

Answer & explanation

Answer: A. §20-324a caps compensation at $25,000 per transaction or claim, regardless of the number of persons harmed. $500,000 is the ceiling on the fund's total balance, not the per-claim cap.

Related terms & state variants

conversion fraud recovery fund

Sources

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Last verified: 2026-10-23