License law violations, penalties and the Recovery Fund
Last reviewed: November 2026
Violations of license law, penalties and procedures make up exam area VI, 3% of the Florida sales associate exam. The outline names the complaint process and the Real Estate Recovery Fund. Much of the area comes down to numbers: the largest fine, the longest suspension, the Recovery Fund caps and the deadlines. Each one is below, with the statute it comes from.
What the commission can do
If a licensee commits a violation, the Florida Real Estate Commission may take any one or more of these actions (s. 475.25(1), F.S.):
| Penalty | Limit in the statute |
|---|---|
| Deny an application or renewal | — |
| Reprimand | — |
| Probation | — |
| Administrative fine | Up to $5,000 for each count or separate offense |
| Suspension | Up to 10 years |
| Revocation | The license is revoked |
A license issued through the commission's mistake may be revoked or cancelled without prejudice to a later application (s. 475.25(2)).
Common grounds for discipline
Section 475.25(1) lists the grounds. Those most often taught:
- (b) fraud, misrepresentation, concealment, false promises, culpable negligence or breach of trust. It does not matter that the victim lost nothing or was later repaid.
- (c) false, deceptive or misleading advertising.
- (d) failing to account for or deliver money or property, such as an escrow deposit (see escrow rules).
- (f) a guilty finding, conviction or no-contest plea to a crime related to real estate activities or involving moral turpitude or fraud, regardless of adjudication.
- (h) paying a commission or referral fee to someone not licensed in Florida. A Florida broker may pay a broker licensed in another state.
- (j) giving an opinion that title is good without an attorney's opinion, or failing to advise a buyer to get an attorney's opinion or title insurance.
- (p) failing to tell the commission in writing within 30 days after a guilty or no-contest plea to, or a conviction of, any felony.
- (r) a listing agreement without a definite expiration date, description, price and terms, fee, and the principal's signature, or not giving the principal a copy within 24 hours.
Criminal penalties under s. 475.42
- Practicing as a broker or sales associate without a valid, current, active license: third-degree felony (s. 475.42(1)(a)).
- Any other violation in s. 475.42(1), such as working for someone who is not your registered employer, collecting money other than in your employer's name, or suing anyone except your registered employer for a commission (s. 475.42(1)(b), (d)): second-degree misdemeanor (s. 475.42(2)).
- A civil case, a criminal case and a license proceeding can all arise from the same facts. One does not stop the others (s. 475.42(2)).
The complaint process, as the statutes set it out
- Complaint. It must be in writing, signed and legally sufficient. Anonymous complaints may be investigated if they are legally sufficient and substantial and preliminary inquiry suggests they are true (s. 455.225(1)(a)).
- Investigation. DBPR gives the licensee a copy of the complaint; the licensee may respond in writing within 20 days (s. 455.225(1)(b)). For a minor first offense, DBPR may issue a notice of noncompliance instead, with 15 days to correct (s. 455.225(3)).
- Probable cause. A probable cause panel decides by majority vote within 30 days after receiving the final investigative report. It may issue a letter of guidance instead (s. 455.225(4)).
- Formal complaint. If probable cause is found, DBPR files a formal complaint and prosecutes it under chapter 120 (s. 455.225(4)).
- Hearing. If material facts are disputed, an administrative law judge holds a formal hearing and issues a recommended order (s. 455.225(5)).
- Final order. The commission issues the final order. Panel members who reviewed the case are excused (s. 455.225(6)).
- Review. A final order can be taken to court for judicial review under s. 120.68; the department itself also has standing to seek that review (s. 455.225(7)).
Timing: the complaint and investigation stay confidential until 10 days after probable cause is found, unless the licensee waives that (s. 455.225(10)). The licensee's broker is notified in writing after the same 10 days (s. 475.25(6)). An administrative complaint must be filed within 5 years of the act or of when it was or should have been discovered (s. 475.25(5)).
Real Estate Recovery Fund
The fund repays people who hold a court judgment for money damages caused by a licensee's violation of s. 475.25 or s. 475.42 in a Florida brokerage transaction. The licensee must have held an active license, must not have been a party, and must have acted only as a licensee (s. 475.482(1)).
| Rule | Statute |
|---|---|
| Up to $50,000 per claimant, actual or compensatory damages only. No treble damages, costs, attorney's fees or interest | s. 475.484(1)(a) |
| $50,000 total for all claims from one transaction | s. 475.484(3) |
| $150,000 total for judgments against one licensee | s. 475.484(4) |
| Claim within 2 years of the act or its discovery; never more than 4 years after the act | s. 475.483(1)(c) |
| Notice to the commission by certified mail when the lawsuit starts (without it, the commission may still honor an otherwise valid claim) | s. 475.483(1)(b) |
| Not eligible: the licensee's spouse; a licensee who acted as agent in the deal; a judgment against a brokerage entity | s. 475.483(2) |
| The license is automatically suspended when the fund pays. It cannot be reinstated until the licensee repays the fund in full, plus interest | s. 475.484(7) |
| Funded by $1.50 a year per sales associate license and $3.50 per broker license, plus all fines the commission collects | s. 475.482(3), (4) |
Example: three buyers in one transaction win unpaid judgments of $40,000, $30,000 and $20,000, which totals $90,000. The fund pays at most $50,000 for that transaction.
Exam traps
- $5,000 is per count; 10 years is the maximum suspension.
- Unlicensed practice is a felony; other s. 475.42 violations are misdemeanors.
- Recovery Fund: $50,000 per transaction, $150,000 per licensee.
- Payment from the fund suspends the license automatically, with no hearing.
- Felony plea: tell the commission within 30 days. Changing employers: 10 days (see license law).
Practice question
A buyer wins a judgment against a sales associate for $72,000 in compensatory damages plus $20,000 in attorney's fees. Nothing can be collected from the associate. What is the most the buyer can receive from the Recovery Fund?
A) $50,000. B) $72,000. C) $92,000. D) $150,000.
Answer: A. One claimant may recover the unpaid compensatory damages or $50,000, whichever is less. Attorney's fees are not recoverable (s. 475.484(1)(a)). $150,000 is the cap per licensee, not per claim.
Test yourself
The free Florida practice test includes the fine limit, the Recovery Fund cap and the rule on commission lawsuits, each with an explanation. For more area VI questions and timed exams, see the paid question bank.
Sources: ss. 455.225, 475.25, 475.42, 475.482–475.486, F.S. Real Estate Drill is an independent study tool, not legal advice. We are not affiliated with FREC, DBPR or Pearson VUE.