NOTICE: If you feel you have been defrauded in a real estate transaction within the State of Louisiana, please contact your attorney, explain the details and they will advise you of the next steps.
The Louisiana Real Estate Recovery Fund was established for the purpose of reimbursing persons adjudged to have suffered monetary damages in the course of a real estate transaction wherein a real estate licensee violated the Louisiana Real Estate License Law. The fund is maintained at a minimum level of four hundred thousand dollars.
Eligibility for the fund is established when a claimant pursuing recovery from a licensee in civil court proceedings has exhausted all avenues of collection from the judgment debtor pursuant to receiving a full judgment in a court of competent jurisdiction. At the time the civil court action is initiated, the claimant must notify the Commission by certified mail and the Commission may intervene in the judicial proceedings.
Payments for claims arising out of the same transaction shall not exceed the aggregate limit of twenty thousand dollars, regardless of the number of claimants or parcels of real estate involved in the transaction. Payments for claims based on a judgment against any one licensee shall not exceed the aggregate limit of fifty thousand dollars.
The Commission may allow an aggrieved party to submit a claim by notarized affidavit when the claim is based on actions of one or more licensees who have been sanctioned by the Commission in an adjudicatory proceeding. if the hearing record corroborates the affidavit submitted by the claimant and the amount of the claim does not exceed two thousand dollars.
Payment from the recovery fund may not be made as reimbursement for any damages other than actual damages suffered by the claimant. Payment from the fund for other costs related to or pursuant to civil proceedings, such as attorney fees, court costs, medical damages and punitive damages, is prohibited.
The right to recover shall be forever barred unless application is made within one hundred eighty days from the date a person established eligibility to recover from the Fund.
Detailed requirements for establishing eligibility to recover from the Recovery Fund are specified below.
Frequently Asked Questions
Is there a form prescribed for submitting applications for recovery from the Recovery Fund?
No. Applications are to be submitted by letter to the Commission requesting payment from the Fund. Enclose the original or certified copies of all documents filed by or on behalf of the claimant with a court of competent jurisdiction and documents issued by a court or other entity in connection with the effort to recover.
What steps must be taken to institute action to recover from the Recovery Fund?
The Louisiana Real Estate License Law specifically requires claimants to notify the Commission by certified mail at the time action to recover is initiated. This is accomplished by sending a letter to the Commission with a copy of the petition bearing a stamp that indicates the date on which the petition was filed with the court.
Can a licensed real estate broker or salesperson, who acted as a principal in a real estate transaction, submit a claim to the Commission for recovery from the Recovery Fund?
Yes, provided the conditions for establishing eligibility for recovery have been satisfied.
How do I contact the Recovery Fund?
You may email the Recovery Fund at recovery@lrec.gov.
§1462. Conditions for recovery; eligibility
A.(1) Any person shall be eligible to seek recovery from the recovery fund if all of the following conditions have been met:
(a) The claimant has received final judgment in a court of competent jurisdiction in this state in any action wherein the cause of action was based on any violation prescribed in this Chapter.
(b) At the time the action was commenced, the claimant gave notice thereof to the Real Estate Commission by certified mail. When the Real Estate Commission receives notice of any action, as required, the commission may intervene, enter an appearance, file an answer, defend the action, or take any action it deems appropriate on behalf of, and in the name of, the defendant and take recourse through any appropriate method of review on behalf of, and in the name of, the defendant.
(c) The claimant has made such judgment executory, and the return of the constable or sheriff showing that executing the same has made a return showing that no personal or real property of the judgment debtor can be found, or that the amount realized on the sale of the judgment debtor’s property pursuant to such execution was insufficient to satisfy the judgment.
(d)(i) The claimant has made all reasonable searches and inquiries to ascertain whether the judgment debtor is possessed of real or personal property or other assets subject to being sold or applied in satisfaction of the judgment, and by his search he has discovered no property or assets, or that he has discovered property and assets and that he has taken all necessary action and proceedings for the application thereof to the judgment and that the amount thereby realized was insufficient to satisfy the judgment.
(ii) The claimant has diligently pursued his remedies against all the judgment debtors and all persons liable to him in the transaction for which he seeks recovery from the recovery fund. If the recovery fund claim is based on the actions of a corporation, partnership, or limited liability company, the claimant must have diligently pursued all possible remedies against the qualifying broker for the corporation, partnership, or limited liability company.
(iii) If the judgment debtor has sought protection under the federal bankruptcy law, the claimant must provide a stamped copy of the proof of claim submitted to the bankruptcy court handling the case of the judgment debtor.
(e) Any amount recovered by the claimant from the judgment debtor, or from any other source, has been applied to the damages awarded by the courts.
(f) The right to recovery under this Subsection shall be forever barred unless application is made within one hundred eighty days from the date of the final judgment of all judicial proceedings, including appeals.
(g) After proper review, the commission may, after receiving written approval of the state attorney general’s office, pay the claim or offer such compromise as is deemed just and equitable.
(2) Consent judgments shall not be eligible for payment from the recovery fund unless the commission has intervened in the lawsuit and is a party to the consent judgment.
B.(1) The commission may, in lieu of meeting all the conditions for recovery set forth in Paragraphs (1) through (5) of Subsection A, allow the aggrieved party to submit a claim to the commission by notarized affidavit giving all the pertinent facts to the claim, when the claim is based on the actions of one or more licensees who have been sanctioned by the commission in an adjudicatory proceeding, the record of which corroborates the affidavit submitted by the claimant, and the amount of the claim does not exceed two thousand dollars.
(2) The right to recover under the provisions of this Subsection shall be forever barred unless application is made within one hundred eighty days from the effective date of the order issued by the commission pursuant to an adjudicatory proceeding pertaining to a claim submitted by a notarized affidavit, including appeals.
(3) Claims submitted by notarized affidavit may be paid by the commission after receiving written approval of the attorney general’s office.
Acts 1978, No. 514, §1; Acts 1983, No. 379, §1; Acts 1986, No. 836, §1; Acts 1989, No. 655, §1, eff. Jan. 1, 1990; Acts 1995, No. 1207, §§1, 2; Acts 1997, No. 845, §1; Acts 1999, No. 452, §2; Acts 2007, No. 35, §1.
§1463. Payment from the fund
A.(1) Any claimant who meets all of the conditions prescribed in this Chapter may apply to the Louisiana Real Estate Commission to cause payment to be made to such claimant from the recovery fund, in an amount equal to the unsatisfied portion of the claimant’s judgment or twenty thousand dollars, whichever is less, and only to the extent and amount reflected in the judgment as being actual damages.
(2) The commission shall not make any payment, be liable, cast in judgment, or pay any portion of any claim or judgment representing an award or claim for attorney fees, court costs, damages for physical or mental injury, medical expenses, loss of income or profits, punitive damages, or any other type of damages other than the actual damages suffered by the claimant.
B. Upon receipt by the claimant of the payment from the recovery fund, the claimant shall assign his additional right, title and interest in the judgment, to the extent of such payment to the commission and thereupon the commission shall be subrogated to the right, title and interest of the claimant; and any amount subsequently recovered on the judgment by the commission, to the extent of the commission’s right, title and interest therein, shall be for the purpose of reimbursing the recovery fund.
C. Payments for claims arising out of the same transaction shall be limited in the aggregate to twenty thousand dollars regardless of the number of claimants or parcels of real estate involved in the transaction.
D. Payments for claims based upon judgment against any one licensed real estate broker or real estate salesperson shall not exceed in the aggregate fifty thousand dollars.
E. If at any time the monies in the recovery fund are insufficient to satisfy any valid claim, or portion thereof, the commission shall satisfy such unpaid claim or portion thereof as soon as a sufficient amount of money has been deposited in the fund.
F. All payments and disbursements from the recovery fund shall be made by the commission upon a voucher signed by the chairman of the commission, or his designee.
G. Upon payment of any amount from the recovery fund in settlement of a claim in satisfaction of a judgment against a licensed broker or salesperson, the license of such broker or salesperson shall be automatically revoked. A discharge of bankruptcy shall not relieve a person from the penalties and disabilities provided in this Section.
Acts 1978, No. 514, §1; Acts 1986, No. 836, §1; Acts 1989, No. 655, §1, eff. Jan. 1, 1990; Acts 1995, No. 1207, §1; Acts 1997, No. 845, §1.