California Real Estate Practice Exam

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What are payments from the Real Estate Recovery Account used for?

To fund real estate educational programs
To compensate real estate fraud victims
To decorate real estate offices
To pay for real estate license exams

The correct answer is: To compensate real estate fraud victims

Payments from the Real Estate Recovery Account are specifically designed to compensate victims of real estate fraud. This fund is particularly important in cases where a licensed real estate agent or broker has committed acts of fraud or negligence that resulted in financial harm to a consumer. The purpose of the account is to provide financial recourse to individuals who may not otherwise have a remedy if the agent or broker cannot reimburse them due to lack of funds or bankruptcy. The other options, while related to the real estate industry, do not align with the primary purpose of the Recovery Account. For instance, funding educational programs or paying for license exams are not functions of this account. The Recovery Account is explicitly established to protect consumers and ensure they have a means to seek compensation when real estate professionals fail to fulfill their obligations.