Question 118

The means by which an adequate balance is maintained in the Real Estate Guaranty Fund is by the assessment of fees upon issuance of licenses and additional assessments imposed upon all licensees by commission rule as needed.

The balance in the Real Estate Guaranty Fund is primarily sustained through the assessment of fees during the issuance of licenses and through periodic additional assessments imposed on all licensees as required by commission rule.

A) assessment of fees upon issuance of licenses and additional assessments imposed upon all licensees by commission rule as needed

This option accurately describes the mechanism used to maintain the balance in the Real Estate Guaranty Fund. By assessing fees at the time of license issuance and allowing for additional assessments as necessary, the fund ensures it has adequate financial resources to cover claims.

B) allocation to the Fund of fines collected by the real estate commission for violations of the license laws

While fines collected for violations of license laws may contribute to the overall revenue of the commission, they are not the primary means of maintaining the balance in the Real Estate Guaranty Fund. This option does not reflect the systematic approach of regular assessments as highlighted in the correct answer.

C) assessment of fees by order of the Governor

This option is incorrect because the assessment of fees for the Real Estate Guaranty Fund is handled by the commission rather than by direct orders from the Governor. The Governor's role does not encompass the specific financial operations of the Fund in this context.

D) reimbursement of fees by the sale of assets of licensees whose actions result in claims against the Fund

This option is not correct as it suggests a reactive measure rather than a proactive strategy. The maintenance of the Fund's balance relies on fee assessments rather than reimbursements from asset sales, which would occur only after claims have been made.

Conclusion

The correct answer, A, clearly illustrates the proactive measures taken to ensure the financial stability of the Real Estate Guaranty Fund through systematic fee assessments. The other options either misrepresent the process or describe reactive measures that do not contribute to maintaining the Fund's balance in the intended manner. Thus, A is the definitive choice for this question.