Title 17. Real Estate Brokers — Subtitle 4. Real Estate Guaranty Fund
Statutes in effect as of October 1, 2026.
Md. Code Ann., Bus. Occ. & Prof. § 17-401 (2026)
Title 17. Real Estate Brokers
Subtitle 4. Real Estate Guaranty Fund
§ 17–401LinkCopy Citation
This subtitle does not limit the authority of the Commission to take:
(1)
any action against a licensee under the disciplinary provisions of Subtitle 3 of this title; or
(2)
any other action authorized under this title.
Md. Code Ann., Bus. Occ. & Prof. § 17-402 (2026)
Title 17. Real Estate Brokers
Subtitle 4. Real Estate Guaranty Fund
§ 17–402LinkCopy Citation
(a)
The Commission shall:
(1)
establish a Real Estate Guaranty Fund; and
(2)
maintain the Guaranty Fund at a level of at least $250,000.
(b)
(1)
The Commission shall deposit all money collected to the credit of the Guaranty Fund with the State Treasurer for placement into a special account.
(2)
(i)
The State Treasurer may invest or reinvest money in the Guaranty Fund in the same manner as money in the State Retirement and Pension System.
(ii)
The investment earnings shall be:
(1)
credited to the Guaranty Fund; and
(2)
available for the same purposes as the money deposited into the Guaranty Fund.
(c)
The Commission may adopt regulations for the administration of a Guaranty Fund.
Md. Code Ann., Bus. Occ. & Prof. § 17-403 (2026)
Title 17. Real Estate Brokers
Subtitle 4. Real Estate Guaranty Fund
§ 17–403LinkCopy Citation
(a)
(1)
Subject to paragraph (2) of this subsection, before the Commission issues a real estate broker license, an associate real estate broker license, or a real estate salesperson license to any individual, the individual shall pay a fee of $20 to be credited to the Guaranty Fund.
(2)
Regardless of how many times an individual applies to the Commission for a license under this title, the Commission may charge the individual only once for the fee required under this subsection.
(b)
If the amount in the Guaranty Fund falls below $300,000, and the Commission is projected to have an operating surplus of at least $500,000 in the current fiscal year, the Commission may transfer up to $500,000 to the Guaranty Fund from the State Real Estate Commission Fund established under § 2–106.3 of the Business Regulation Article.
(c)
If the amount in the Guaranty Fund falls below $250,000, the Commission shall assess each real estate broker, each associate real estate broker, and each real estate salesperson a fee in an amount that will return the Guaranty Fund to a level of at least $250,000.
Md. Code Ann., Bus. Occ. & Prof. § 17-404 (2026)
Title 17. Real Estate Brokers
Subtitle 4. Real Estate Guaranty Fund
§ 17–404LinkCopy Citation
(a)
(1)
Subject to the provisions of this subtitle, a person may recover compensation from the Guaranty Fund for an actual loss.
(2)
A claim shall:
(i)
be based on an act or omission that occurs in the provision of real estate brokerage services by:
(1)
a licensed real estate broker;
(2)
a licensed associate real estate broker;
(3)
a licensed real estate salesperson; or
(4)
an unlicensed employee of a licensed real estate broker;
(ii)
involve a transaction that relates to real estate that is located in the State; and
(iii)
be based on an act or omission:
(1)
in which money or property is obtained from a person by theft, embezzlement, false pretenses, or forgery; or
(2)
that constitutes fraud or misrepresentation.
(b)
The amount recovered for any claim against the Guaranty Fund may not exceed $50,000 for each claim.
(c)
(1)
A person may not recover from the Guaranty Fund for any loss that relates to:
(i)
the purchase of any interest in a limited partnership that is formed for the purpose of investment in real estate;
(ii)
a joint venture that is promoted by a licensed real estate broker, a licensed associate real estate broker, or licensed real estate salesperson for the purpose of investment in real estate by 2 or more individuals; or
(iii)
the purchase of commercial paper that is secured by real estate.
(2)
A claim under the Guaranty Fund may not be made by:
(i)
the spouse of the licensee or the unlicensed employee alleged to be responsible for the act or omission giving rise to the claim; or
(ii)
the personal representative of the spouse of the licensee or the unlicensed employee alleged to be responsible for the act or omission giving rise to the claim.
(d)
A claim under this subtitle shall be submitted to the Commission within 3 years after the claimant discovers or, by the exercise of ordinary diligence, should have discovered the loss or damage.
Md. Code Ann., Bus. Occ. & Prof. § 17-405 (2026)
Title 17. Real Estate Brokers
Subtitle 4. Real Estate Guaranty Fund
§ 17–405LinkCopy Citation
A real estate broker shall include in each sales contract that is provided by the real estate broker a written notice to the buyer that the buyer is protected by the Guaranty Fund in an amount not exceeding $50,000.
Md. Code Ann., Bus. Occ. & Prof. § 17-406 (2026)
Title 17. Real Estate Brokers
Subtitle 4. Real Estate Guaranty Fund
§ 17–406LinkCopy Citation
(a)
Each claim against the Guaranty Fund shall be made in accordance with this section.
(b)
Each claim shall:
(1)
be in writing;
(2)
be made under oath;
(3)
state the amount of loss claimed;
(4)
state the facts on which the claim is based; and
(5)
be accompanied by any documentation or other evidence that supports the claim.
Md. Code Ann., Bus. Occ. & Prof. § 17-407 (2026)
Title 17. Real Estate Brokers
Subtitle 4. Real Estate Guaranty Fund
§ 17–407LinkCopy Citation
(a)
The Commission shall act promptly on a claim made under this subtitle.
(b)
Upon receipt of a claim, the Commission shall:
(1)
forward a copy of the claim:
(i)
to each licensee alleged to be responsible for the act or omission giving rise to the claim;
(ii)
to each unlicensed employee alleged to be responsible for the act or omission giving rise to the claim; and
(iii)
if the licensee alleged to be responsible for the act or omission giving rise to the claim is an associate real estate broker or a real estate salesperson, to each real estate broker with whom the associate real estate broker or the real estate salesperson is affiliated; and
(2)
request from each of those individuals a written response within 10 days to the allegations set forth in the claim.
(c)
(1)
The Commission:
(i)
shall review the claim and any response to the claim; and
(ii)
may conduct an investigation of the claim.
(2)
On the basis of its review and any investigation that the Commission conducts, it shall:
(i)
issue a proposed award under subsection (d) of this section;
(ii)
set the matter for a hearing; or
(iii)
if the claim is frivolous, made in bad faith, or legally insufficient, dismiss the claim.
(d)
(1)
(i)
If a claimant’s total claim arising from the conduct of one licensee does not exceed $5,000, the Commission may issue a proposed order to either pay the claim in whole or in part or to deny the claim.
(ii)
The Commission shall send the proposed order to the claimant and the licensee by personal delivery or by both regular and certified mail, return receipt requested.
(iii)
The proposed order shall be sent to the licensee at the most recent address on record with the Commission.
(2)
(i)
Within 30 days after the date of personal service of the proposed order or receipt of the proposed order by certified mail, the licensee or the claimant may request in writing a hearing before the Commission or file written exceptions to the proposed order issued under paragraph (1) of this subsection.
(ii)
On receipt of a written request for a hearing or written exceptions to the proposed order in accordance with subparagraph (i) of this paragraph, the Commission shall schedule a hearing on the claim.
(iii)
If a hearing is not requested or if timely exceptions are not filed to the proposed order, the proposed order shall become a final order of the Commission.
(e)
At any claim hearing, the burden of proof shall be on the claimant to establish the validity of the claim.
Md. Code Ann., Bus. Occ. & Prof. § 17-408 (2026)
Title 17. Real Estate Brokers
Subtitle 4. Real Estate Guaranty Fund
§ 17–408LinkCopy Citation
(a)
The Commission shall give the claimant and the licensee or unlicensed employee alleged to be responsible for the act or omission giving rise to the claim an opportunity to participate in the hearing before the Commission.
(b)
The Commission shall give notice of the hearing to:
(1)
the claimant;
(2)
each licensee alleged to be responsible for the act or omission giving rise to the claim; and
(3)
each unlicensed employee alleged to be responsible for the act or omission giving rise to the claim.
(c)
The Commission may not proceed with the hearing unless the records of the Commission show that all notices required under this subtitle were sent to each licensee and each unlicensed employee alleged to be responsible for the act or omission giving rise to the claim.
Md. Code Ann., Bus. Occ. & Prof. § 17-409 (2026)
Title 17. Real Estate Brokers
Subtitle 4. Real Estate Guaranty Fund
§ 17–409LinkCopy Citation
(a)
If a claim against the Guaranty Fund alleges that the act or omission giving rise to the claim was performed by a licensed real estate broker, a licensed associate real estate broker, or a licensed real estate salesperson, the Commission shall join the proceeding on the claim with any disciplinary proceeding against the licensee under this title arising from the same facts alleged in the claim.
(b)
(1)
For that part of a hearing on consolidated proceedings that relates to disciplinary action but does not relate to the Guaranty Fund claim against a licensee, the claimant:
(i)
may not be a party; and
(ii)
may participate only as a witness.
(2)
For that part of a hearing on consolidated proceedings that relates to the claim against the Guaranty Fund, the claimant is a party.
Md. Code Ann., Bus. Occ. & Prof. § 17-410 (2026)
Title 17. Real Estate Brokers
Subtitle 4. Real Estate Guaranty Fund
§ 17–410LinkCopy Citation
(a)
The Commission shall order payment of a claim by the Guaranty Fund if, on the hearing, the claimant:
(1)
proves that the claimant has a valid claim under this subtitle; and
(2)
presents evidence, satisfactory to the Commission, that the claimant is not:
(i)
the spouse of the licensee or the unlicensed employee alleged to be responsible for the act or omission giving rise to the claim; or
(ii)
the personal representative of the spouse of the licensee or the unlicensed employee alleged to be responsible for the act or omission giving rise to the claim.
(b)
(1)
The Commission may order payment by the Guaranty Fund only for the actual monetary loss suffered by the claimant as a result of the claim proven by the claimant.
(2)
For any claim, the Commission may not order a payment by the Guaranty Fund of more than $50,000.
(c)
A payment may not be made by the Guaranty Fund under an order of the Commission until:
(1)
the expiration of the time provided under Title 10, Subtitle 2 of the State Government Article for seeking judicial review of the Commission’s order; or
(2)
the expiration of any judicial stay of the order of the Commission.
(d)
The Commission shall order payment of each claim due in the order in which the claim was awarded.
(e)
If, at the time a payment is due, the money in the Guaranty Fund is insufficient to satisfy fully the order for payment, the Commission:
(1)
immediately shall pay to the claimant the amount that is available in the Guaranty Fund; and
(2)
when sufficient funds are available in the Guaranty Fund, shall pay the claimant:
(i)
the balance due on the order; plus
(ii)
interest calculated on that balance at an annual rate of 10%.
Md. Code Ann., Bus. Occ. & Prof. § 17-411 (2026)
Title 17. Real Estate Brokers
Subtitle 4. Real Estate Guaranty Fund
§ 17–411LinkCopy Citation
(a)
After payment of a claim by the Guaranty Fund, a licensee who the Commission finds responsible for the act or omission that gave rise to the claim shall reimburse the Guaranty Fund in full for:
(1)
the amount paid by the Guaranty Fund; and
(2)
interest on the amount paid by the Guaranty Fund at an annual rate of at least 10%, as set by the Commission.
(b)
Each licensee who the Commission finds responsible for the act or omission that gave rise to a claim is jointly and severally liable for the claim.
(c)
If a licensee does not reimburse the Guaranty Fund as provided in subsection (a) of this section, the Commission or the State Central Collection Unit, as assignee of the Commission, may bring an action against the licensee for the amount that has not been reimbursed.
(d)
The Commission or the State Central Collection Unit, as assignee of the Commission, shall be entitled to a judgment for the amount that the licensee has not reimbursed the Guaranty Fund if the Commission proves that:
(1)
payment was made by the Guaranty Fund based on an act or omission for which the Commission found the licensee was responsible;
(2)
a period of at least 30 days has passed since payment was made by the Guaranty Fund; and
(3)
the licensee has not reimbursed the Guaranty Fund for the amount for which the judgment is sought.
(e)
(1)
If a person liable for reimbursing the Guaranty Fund under this section receives a demand for reimbursement and fails to reimburse the Fund, the reimbursement amount and any accrued interest or cost are a lien in favor of the State on any real property of the person if the lien is recorded and indexed as provided in this subsection.
(2)
The lien in favor of the State created by this subsection may not attach to specific property until the State Central Collection Unit records written notice of the lien in the office of the clerk of the court for the county in which the property subject to the lien or any part of the property is located.
(3)
The lien in favor of the State created by this subsection does not have priority as to any specific property over any person who is a lienholder of record at the time the notice required under paragraph (2) of this subsection is recorded.
(4)
The notice required under paragraph (2) of this subsection shall contain the name and address of the person against whose property the lien exists, the amount of the lien, a description of or reference to the property subject to the lien, and the date the Guaranty Fund paid the claim giving rise to the lien.
(5)
Upon presentation of a release of any lien in favor of the State created by this subsection, the clerk of the court in which the lien is recorded and indexed shall record and index the release and shall note in the lien docket the date the release is filed and the fact that the lien is released.
(6)
The notice required under paragraph (2) of this subsection and any release filed under paragraph (5) of this subsection shall be indexed with the judgment lien records maintained by the office of the clerk of the court where the notice is recorded.
(7)
The clerk may collect a reasonable fee for recording and indexing each notice of lien or release of any lien under this subsection.
(f)
For the purpose of excepting to a discharge of a licensee under 11 U.S.C. § 523, the Commission or the State Central Collection Unit, as assignee of the Commission, is a creditor of the licensee for the amount that was paid by the Guaranty Fund but that has not been reimbursed by the licensee.
Md. Code Ann., Bus. Occ. & Prof. § 17-412 (2026)
Title 17. Real Estate Brokers
Subtitle 4. Real Estate Guaranty Fund
§ 17–412LinkCopy Citation
(a)
If the Commission orders payment by the Guaranty Fund of a claim based on an act or omission for which a licensee is responsible, the Commission immediately and without further proceedings shall suspend the license of the licensee.
(b)
The Commission may not reinstate a license that is suspended under this section until the individual whose license was suspended:
(1)
repays in full:
(i)
the amount paid by the Guaranty Fund; and
(ii)
the interest due under § 17-411(a)(2) of this subtitle; and
(2)
applies to the Commission for reinstatement of the license.
(c)
Regardless of whether the disciplinary sanction was imposed for the same act or omission that gave rise to the claim against the Guaranty Fund, the reimbursement of the Guaranty Fund by a licensee does not affect any sanction imposed by the Commission against an individual under the disciplinary provisions of Subtitle 3 of this title.