Sanctions include reprimand, license suspension, or license revocation.
Before you read
Test yourself first: 5 questions
Question 1 of 5
If the Maryland Real Estate Commission finds a licensee violated the license law, it may impose which of the following?
Answer: B. MREC may discipline licensees through reprimand, license suspension or revocation, and civil monetary penalties; criminal punishment requires the courts, not the Commission.
Question 2 of 5
After a disciplinary hearing, which of the following sanctions is within the Maryland Real Estate Commission's authority against a licensee found to have violated the license law?
Answer: B. As an administrative agency, the Commission may discipline licensees by reprimand, suspension, or revocation of the license and may impose civil monetary penalties. It cannot impose criminal imprisonment or award punitive damages; those are functions of the courts.
Question 3 of 5
A Maryland salesperson is convicted of a felony involving fraud during the term of an active license. Which action may the Maryland Real Estate Commission take?
Answer: B. Conduct demonstrating dishonesty, fraud, or untrustworthiness — including certain criminal convictions — is grounds for discipline. The Commission, after due process, may reprimand, suspend, or revoke a license, and may also impose civil penalties. The Commission's disciplinary authority is independent of any criminal proceeding.
Question 4 of 5
In Maryland, mixing client trust funds with a broker's own operating funds is known as which prohibited practice?
Answer: A. Commingling, mixing client/escrow money with the broker's personal or business funds, is prohibited and can subject the broker to discipline.
Question 5 of 5
Maryland maintains a fund to reimburse consumers harmed by a licensee's misconduct, called the:
Answer: B. Maryland operates a Real Estate Guaranty Fund that may reimburse consumers who suffer actual monetary loss from certain acts of a licensee.
Keep the streak going with more questions like these, each with a full rationale.
Must-know rules
- MREC may investigate complaints and discipline licensees for violations.
- Sanctions include reprimand, license suspension, or license revocation.
- MREC may impose civil penalties for each violation of the license law.
- Common grounds: fraud, misrepresentation, commingling, and dishonest dealing.
- Maryland maintains a Real Estate Guaranty Fund to reimburse harmed consumers.
- Guaranty Fund claims arise from a licensee's fraud or conversion of funds.
- Recovery from the Fund is capped per claim and per licensee by statute.
- MREC can suspend a licensee's license until any Fund payout is repaid.
Maryland License Discipline, Penalties & Guaranty Fund: FAQs
Is Maryland License Discipline, Penalties & Guaranty Fund on the real estate exam?
Yes. State License Law is a scored domain on the Maryland real estate licensing exam, and this topic appears in the state license-law portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
Does Maryland test this differently?
Maryland applies its own license law on top of the national portion. This page covers the Maryland rules specifically, which is what the state section of your exam tests.
