Delaware Real Estate Broker Exam — All Questions

A buyer under a written agreement to purchase a Delaware unit governed by the Unit Property Act obtains the treasurer's written statement of unpaid assessments. If that statement understates them, the buyer is:

• a.Jointly and severally liable with the seller for the full amount actually owed
• b.Liable for the shortfall only if the seller cannot be found within one year
• c.Liable for half the shortfall, with the council of unit owners absorbing the rest
• d.Not liable for any amount above the unpaid assessments the statement shows✓

25 Del. C. § 2237 makes the grantee jointly and severally liable with the grantor for unpaid common-expense assessments charged against the unit, and then supplies the escape: a person who has entered into a written agreement to purchase may obtain a written statement from the treasurer, and “if such statement does not reveal the full amount of the unpaid assessments as of the date it is rendered, neither the purchaser nor the unit shall be liable for the payment of an amount in excess of the unpaid assessments shown thereon.” So joint liability is the default the statement displaces, which is why the unqualified joint-and-several answer describes the position of a buyer who never asked. The one-year and half-share answers appear nowhere. The Unit Property Act is opt-in — § 2203 applies it only where the owners submit the property to it by a duly recorded declaration — and § 2201 makes it subject to DUCIOA in Chapter 81, which supersedes parts of it.

A Delaware unit owner asks the association for the resale certificate needed to sell. The association must furnish it within:

• a.Five business days of the request, and may charge no more than $50 for it
• b.Sixty days of the request, and may charge no more than $500 for it
• c.Ten days of the request, or it may charge no fee at all for that certificate✓
• d.Thirty days of the request, or it may charge no fee at all for that certificate

25 Del. C. § 81-409(b) requires the association, “within 10 days after a request by a unit owner,” to furnish the certificate, caps the fee at $200 (plus up to $50 more for a paper copy), and adds the sanction that “if the association fails to provide the requested certificate within the 10-day period, the association may not charge any fee for providing that certificate.” The other periods and fee figures are inventions. Two further deadlines travel with this one: § 81-409(a) makes the owner furnish the certificate and governing documents to the purchaser no later than the signing of the contract, with the information correct to within 120 days, and if the purchaser is not given it before executing the contract, the purchaser may cancel within 5 calendar days after first receiving it. Do not assume older communities are outside this: § 81-119 applies § 81-409 to common interest communities created before DUCIOA's 30 September 2009 effective date.

A Delaware one-year residential tenancy ends. The landlord must remit the deposit, or an itemized list of damages with payment of the difference, within:

• a.20 days, or owe the tenant double the amount wrongfully withheld✓
• b.30 days, or owe the tenant double the amount wrongfully withheld
• c.45 days, or forfeit the right to claim any damages from the tenant
• d.60 days, or owe the tenant treble the amount wrongfully withheld

25 Del. C. § 5514(e) and (f) both run on 20 days from expiration or termination — one for remitting the deposit, one for the itemized list of damages and estimated repair costs — and § 5514(f) adds that failing to send the list “shall constitute an acknowledgment by the landlord that no payment for damages is due.” § 5514(g)(1) then entitles the tenant to double the amount wrongfully withheld. Thirty days is the number most people carry over from other states and it is the trap here. The cap is conditional rather than absolute: § 5514(a)(2) limits the deposit to one month's rent where the rental agreement is for a year or more, § 5514(a)(3) extends that to month-to-month tenancies once they have lasted a year, and § 5514(a)(4) exempts furnished rental units altogether. A pet deposit is capped at one month's rent regardless of term.

A Delaware county has enacted the full 1½ percent local realty transfer tax, so the state rate on the transfer drops to 2½ percent. The resulting tax is:

• a.Paid entirely by the grantee when the deed is recorded
• b.Apportioned three quarters to the grantee, one quarter to the grantor
• c.Apportioned equally between the grantor and the grantee✓
• d.Paid entirely by the grantor when the deed is recorded

30 Del. C. § 5402(a) sets the state realty transfer tax at 3 percent “unless the municipality or county where the property is located has enacted the full 1½ percent realty transfer tax authorized by § 1601 of Title 22 or § 8102 of Title 9, in which case 2½ percent,” and closes with “said tax is to be apportioned equally between grantor and grantee.” The customary Delaware total of 4 percent is therefore 2 percent from each side, not a seller's or buyer's charge and not an uneven split. First-time buyers get relief but not an exemption: § 5402(c) reduces only the grantee's portion, by ½ percent of the lesser of the property's value or $400,000, and expressly does not relieve the grantor of the grantor's portion. § 5402(b) imposes no tax where the actual value transferred is less than $100.

A Delaware deed conveys land to two unmarried co-purchasers and says nothing about survivorship. They hold title as:

• a.Tenants in partnership, unless the deed provides some other tenancy
• b.Tenants in common, because survivorship has to be granted expressly✓
• c.Joint tenants with right of survivorship, which is the Delaware default
• d.Tenants by the entirety, which Delaware presumes for any co-grantees

25 Del. C. § 701 provides that no estate in joint tenancy shall be held or claimed under any grant, devise or conveyance to persons other than executors or trustees “unless the premises therein mentioned are expressly granted, devised or conveyed to such persons, to be held as joint tenants and not as tenants in common.” Delaware therefore presumes a tenancy in common and puts the burden on the drafting language, which is the opposite of the joint-tenancy default some states use. Tenancy by the entirety is not a presumption available to unmarried grantees; where it does apply, § 309(c) gives it its distinctive strength — “property held by the entireties shall not be subject to the claims of a creditor of only 1 spouse.” Tenancy in partnership answers to partnership law, not to a silent deed. § 311 confirms that a grantor may convey directly to himself and another as joint tenants with right of survivorship.

Which of these is a protected status under the Delaware Fair Housing Act but not under the federal Fair Housing Act?

• a.Familial status
• b.National origin
• c.Disability
• d.Source of income✓

6 Del. C. § 4603(b)(1) forbids discrimination in the sale or rental of a dwelling “because of race, color, national origin, religion, creed, sex, marital status, familial status, source of income, age, sexual orientation, gender identity, disability, military status, or housing status.” Familial status, national origin and disability are all on that list, but they are also three of the seven federal classes, so none of them is the Delaware-only answer. Source of income is, and it matters in practice because it reaches a housing voucher. Delaware also adds creed, marital status, age, sexual orientation, gender identity, military status, and housing status, the last defined in § 4602(18) as a person's current overnight residence regardless of permanence or habitability. Enforcement runs through the Division of Human and Civil Rights and the Delaware Human and Civil Rights Commission — renamed from the old Human Relations Commission — with a complaint due within one year under § 4610(a) and a private civil action within two years under § 4613(a).

A Delaware contract for unimproved land where central sewerage and water are not available is, under the statutory notice, contingent on all of the following except:

• a.The lot conforming with the applicable local zoning ordinance
• b.A DNREC permit already issued in the buyer's name before signing✓
• c.A satisfactory site evaluation allowing an approved on-site disposal system
• d.The availability of a water supply for the parcel being purchased

25 Del. C. § 313 requires every contract for the sale of unimproved real estate in Delaware to carry a conspicuous NOTICE TO BUYER, and where central sewerage and water are unavailable that notice makes the contract contingent on exactly three things: “(1) a satisfactory site evaluation that will allow the installation of an approved on-site disposal system, in accordance with the regulations promulgated by the Department of Natural Resources & Environmental Control, that is acceptable to the buyer; (2) the availability of a water supply; and (3) the lot conforming with the local zoning ordinance,” failing which the contract is null and void and all deposits are returned. A DNREC construction permit is a later step and is issued to the person installing the system, not a precondition to signing. The notice also fixes who requests the site evaluation and by what date, who pays, and lets the parties modify or the buyer waive the provisions by an addendum both sign.

An open-house directional sign is placed beside an interior street inside a Delaware residential subdivision that has a sidewalk. The clear zone from which the Department may immediately remove it runs from the pavement edge to:

• a.Seven feet, or the far sidewalk edge, whichever is the shorter distance✓
• b.Ten feet, measured perpendicular to the edge of the pavement
• c.The nearer edge of the sidewalk, whatever that distance turns out to be
• d.The front property line of the nearest lot fronting on that street

17 Del. C. § 525(b)(2) gives interior streets within residential subdivisions their own, tighter clear zone: from the edge of the pavement “for the shorter distance of either: a. Seven feet perpendicular to the pavement edge, or b. If there is a sidewalk adjacent to the street, the sidewalk edge further from the street.” Ten feet is the figure for every other road under § 525(b)(1), which is why it is the near miss. The nearer sidewalk edge and the front property line are not the statutory measures. Within the zone § 525(a) gives the Department immediate authority to remove non-official signs and other obstructions, § 525(c) imposes a $25 civil fine for each item removed, and § 525(d) charges a $15 recovery fee and lets the Department dispose of anything not reclaimed within 30 days. § 524(b) reaches signs stapled to utility poles in the right-of-way at any location, and § 526(a) bars commercial advertising signs from rights-of-way in unincorporated areas.

Every Delaware contract for the sale of real estate under which the seller agrees to provide financing must include, as an integral part of the contract:

• a.A title insurance commitment issued in the purchaser's name before signing
• b.A recorded purchase money mortgage naming the seller as the mortgagee
• c.An appraisal by a Delaware certified appraiser dated within the last 90 days
• d.A complete amortization schedule signed by the seller and the purchaser✓

25 Del. C. § 314(a) requires every seller-financed contract, improved or unimproved, to “include as an integral part of the contract a complete amortization schedule for all payments to be made under such financing agreement,” with a per-payment breakdown of principal and interest, the unpaid balance remaining after each payment, a statement that both sides have read and understand it, and the signatures of seller and purchaser. § 314(b) adds that the contract must state the principal amount of seller financing exclusive of interest, and that interest may not be folded into the stated purchase price. Nothing in the section requires a title commitment, a recorded mortgage or an appraisal — those are lender and closing practices, not statutory contract contents. Under § 314(e), failing to comply with subsection (a), (b) or (c) makes the contract voidable at the option of either party before settlement.

A Delaware parcel lies within a tax ditch. The taxes levied on it under the tax ditch chapter are:

• a.Collectible only on a sale of the parcel, out of the seller's net proceeds
• b.Unenforceable unless the ditch organization records a separate lien notice
• c.A first and paramount lien, subject only to the lien for state and county taxes✓
• d.Subordinate to every recorded mortgage and to all recorded mechanics' liens

7 Del. C. § 4180 provides that “all taxes levied under this chapter shall constitute a first and paramount lien against the lands to which they apply from and after the date of such levy, subject only to the lien for state and county taxes,” enforceable by sale in the same manner as the county tax lien. It therefore outranks mortgages rather than yielding to them, attaches at the levy rather than waiting for a sale, and needs no separate filing, because § 4195(c)(3) has the Resident Judge's confirming order recorded in the office of the Recorder of Deeds. The right-of-way surprises buyers: § 4105(a) sets it at 80 feet from the top of the bank for a ditch designed with a 0 to 4 foot bottom width and 120 feet for a 4 to 10 foot bottom width. Willfully obstructing a tax ditch draws a fine of up to $100 under § 4186(c), while structures already there on 17 July 2008 are grandfathered as a legal nonconforming use.

A Delaware manufactured home community owner decides to sell and serves the statutory notice. A homeowner association that wants to use the right must respond in writing within:

• a.30 calendar days of the mailing of the community owner's notice✓
• b.60 calendar days of the mailing of the community owner's notice
• c.10 business days of the mailing of the community owner's notice
• d.90 calendar days of the mailing of the community owner's notice

25 Del. C. § 7029(a) requires the homeowner association to respond in writing, by overnight service with signature receipt, “within 30 calendar days from the date of the mailing of the notice sent by the community owner to the association or to the Authority.” § 7029(d) supplies the consequence of missing it: the association loses the right to purchase for the remainder of the twelve-month period that began with the owner's notice. Note the name — § 7027(a) creates a right of first OFFER, triggered when the owner reaches a decision to sell, not a right of first refusal exercised against a third party's contract — and § 7029(e) makes it neither transferable nor assignable. § 7028 lists nine situations that require no notice at all, including a foreclosure sale, a transfer by gift, devise or operation of law, eminent domain, a transfer to an affiliate, and a section 1031 exchange. A willful failure to comply is a per se Consumer Fraud Act violation under § 7026(b), with treble damages available.

Delaware's Uniform Electronic Transactions Act governs a real estate transaction:

• a.Only where a Delaware notary has certified each of the electronic signatures
• b.Only where the parties have recorded the executed agreement electronically
• c.Only where each party has agreed to conduct transactions by electronic means✓
• d.In every transaction, because an electronic record is legally equivalent

6 Del. C. § 12A-105(b) is the gate: “this chapter applies only to transactions between parties each of which has agreed to conduct transactions by electronic means,” with agreement determined from the context and surrounding circumstances, including the parties' conduct. Consent is therefore the condition, not an afterthought, which is why the Act does not simply make every electronic record valid — and § 12A-105(c) adds that a party who agrees once may refuse to conduct other transactions electronically, a right that may not be waived by agreement. Notarization and electronic recording are not conditions of the Act's application: § 12A-111 says the opposite, treating a notarization requirement as satisfied where the authorized person's electronic signature is attached to or logically associated with the record. Once the Act applies, § 12A-107 makes an electronic record satisfy a writing requirement and an electronic signature satisfy a signature requirement; § 12A-103(b)(1) keeps wills and codicils outside it.

A seller who is not a Delaware resident sells a Delaware house. The estimated income tax declared on Form 5403 is:

• a.Waived wherever the seller has owned the Delaware property for over a year
• b.Remitted with the deed to the Recorder before the deed may be recorded✓
• c.Paid with the seller's annual Delaware income tax return the following April
• d.Collected by the buyer's lender and remitted within thirty days of closing

30 Del. C. § 1126(c) requires that the return or form “and the estimated tax reported due on such return or form, shall be remitted with the deed to the Recorder before the deed shall be recorded,” and that the payment be withheld from the net proceeds of the sale. Deferring it to the annual return would defeat the collection mechanism, which is precisely that the Recorder will not record without it; there is no lender-collection route and no holding-period waiver. § 1126(b) makes every nonresident individual selling or exchanging Delaware real estate file the declaration, applying the highest marginal rate under § 1102 — currently 6.6 percent of taxable income above $60,000 — to an estimate of the GAIN recognized, not to the sale price. Brokers should know § 1126(e), which provides that neither the settlement agent, the closing attorney, the lending institution nor the real estate agent or broker is liable for the amounts required to be collected.

Under the Delaware Consumer Fraud Act, concealing a material fact in connection with the sale of real estate is an unlawful practice:

• a.Only where a buyer relied on the concealment and suffered a monetary loss
• b.Only where the seller rather than a licensee did the actual concealing
• c.Only where the property is a one-to-four family residential dwelling
• d.Whether or not anyone was in fact misled, deceived or damaged by it✓

6 Del. C. § 2513(a) makes deception, misrepresentation or “the concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression, or omission, in connection with the sale, lease, receipt, or advertisement of any merchandise, whether or not any person has in fact been misled, deceived, or damaged thereby,” an unlawful practice. Those closing words remove reliance and damage from the elements, so a buyer who spotted the problem in time has not cured the violation. Real estate is squarely inside the Act, because § 2511(6) defines merchandise to include real estate, and nothing narrows it to one-to-four family homes or to sellers rather than licensees. § 2513(c) stretches “in connection with” to conduct before, during or after the sale. Several real estate statutes are enforced through this Act, including the new-home escrow duty in 6 Del. C. § 3603(b) and the manufactured-home right of first offer in 25 Del. C. § 7026(b).

A Delaware licensee's buyer asks who may inspect the house they are buying. Under Delaware law a person may act as a home inspector:

• a.Without a license, provided the buyer signs a written acknowledgment first
• b.Only if licensed by the Delaware State Board of Home Inspectors✓
• c.Only if licensed as a Delaware certified real estate appraiser
• d.Without any license, since Delaware regulates appraisers but not inspectors

24 Del. C. § 4107(a) bars any person from holding out as qualified to act as a home inspector, advertising, or engaging in the practice of inspecting homes “unless such person has been duly licensed under this chapter,” and § 4107(c) requires even a home inspector trainee to be registered with the Board. Delaware has licensed inspectors since 2013, so the claim that it regulates only appraisers is out of date, and no buyer acknowledgment substitutes for a license. The appraiser answer confuses two neighboring chapters — Chapter 40 of Title 24 is real estate appraisers, Chapter 41 is home inspectors. § 4102 limits a home inspection to a visual analysis of a residential building of four units or fewer, covering the listed components, and defines “home” so that it does not include the common areas of condominiums or cooperatives. Under § 4108(a)(8) an applicant must show that the applicant or the applicant's employer carries liability and errors and omissions insurance.

A Delaware deed restriction forbids any renewable-energy device on the roof of a single-family home. Under Title 25 that restriction is:

• a.Void as to a roof mounted solar system, but not as to a wind turbine✓
• b.Void as to roof mounted solar systems and to wind turbines alike
• c.Fully enforceable, since deed restrictions are contracts between the owners
• d.Void only once two thirds of the owners vote to strike the restriction

25 Del. C. § 318(b) voids and makes unenforceable any covenant, restriction or condition that “effectively prohibits or unreasonably restricts the owner of the property from installing or using a roof mounted system for obtaining solar energy on that owner's property.” The section is solar-only — the word wind does not appear anywhere in it — so a covenant banning a residential wind turbine survives, and treating the two technologies alike is the common error. The restriction is not simply enforceable either, and the two-thirds vote in § 318(e) is an amendment mechanism for a declaration with none of its own, not the condition on which the statutory voiding depends. § 318(c) preserves reasonable restrictions, meaning those that do not significantly increase cost or significantly decrease efficiency, and § 318(f) requires the owner to give 60 days' notice by certified mail to the association and to neighbors within 150 feet, who must respond no later than 30 days before installation or the owner may proceed as planned.