Delaware Real Estate Broker Exam — All Questions

A Delaware broker opens the brokerage's escrow account. The account must be opened:

• a.In the broker's individual name, with the brokerage named as beneficiary
• b.In the name of the client whose deposit is largest at the time of opening
• c.In a title company's name, with the broker as an authorized signatory
• d.In the brokerage organization's name and designated as an escrow account✓

24 Del. C. § 2923(a)(1) requires that escrow “accounts shall be opened in the name of the brokerage organization and designated as an escrow account,” in a federally insured banking institution with offices in Delaware, with the broker as a signatory on each. Rule 6.5 tightens it further: the brokerage name on the account must match the name on the license, including any d/b/a. The other three all break the identification the statute is buying — an account in the broker's own name is indistinguishable from personal money, an account named for one client cannot hold the others' deposits, and a title company's account is not the broker's escrow account at all. One widely repeated figure does not belong here: the “$100 of the broker's own funds” allowance comes from a 1999 proposed regulation the Commission's later final order replaced, and the current text carries no dollar cap — § 2923(a)(3) allows only the bank's minimum balance and money to cover bank fees.

Delaware escrow records must show the amount of the broker's personal funds in escrow at all times, and must be kept for at least:

• a.one year
• b.three years✓
• c.five years
• d.seven years

24 DE Admin. Code 2900 § 6.3 requires the broker to keep a complete record of all moneys received or escrowed — sources, date of receipt, depository, date of deposit, and final disposition once a transaction closes — adds that “the records shall clearly show the amount of the Broker's personal funds in escrow at all times,” and closes with “such records shall be retained for at least 3 years.” The other periods match no Delaware requirement, although three years recurs elsewhere in the rules: § 1.3.1 and § 14.5 make the broker keep continuing education certificates for affiliated licensees for at least three years after each renewal period. The records must sit at, or be electronically available at, the broker's approved place of business, and 24 Del. C. § 2923(e) opens them to inspection or audit by the Commission and its authorized agents during regular business hours.

Over and above the associate broker requirements, a Delaware broker applicant must show active practice as a licensed salesperson or associate broker for:

• a.the five years immediately preceding application
• b.the seven years immediately preceding application
• c.the three years immediately preceding application✓
• d.the one year immediately preceding application

24 DE Admin. Code 2900 § 4.1.1 requires the broker applicant to submit evidence of having “been actively engaged in the practice of Real Estate Services, either as a licensed Salesperson or licensed Associate Broker for 3 years immediately preceding application.” The five-year figure is the near miss, and it is a real requirement in the neighboring rule: § 4.1 folds in the whole of § 3.0, so a broker applicant must separately have been actively licensed for five continuous years under § 3.1.1 and list at least thirty completed sale or lease transactions from the last five years under § 3.2.4. One and seven years match nothing. The applicant must also apply for a real estate office permit, attest to being responsible for the day-to-day management and supervision of the office, and show compliance with the escrow provisions of 24 Del. C. § 2923(a).

A Delaware broker opens a branch office. The designated on-site supervisor named on the branch application must be a licensee with:

• a.a minimum of five years of continuous real estate services experience✓
• b.a minimum of three years of continuous real estate services experience
• c.a broker license and at least two years supervising other licensees
• d.an associate broker license and any amount of Delaware experience

24 Del. C. § 2919(d) requires the branch office application to state the address and the designated on-site supervisor, and provides that “the designated on-site supervisor shall be a licensee with a minimum of 5 years of continuous real estate services experience, which shall be documented on the branch office application.” Note what the statute does not demand: the supervisor need only be a licensee, so requiring a broker license or a separate supervisory tenure adds a condition Delaware left out, and dropping the experience requirement removes the one it kept. Rule 1.3.3 adds that the supervisor must be a Delaware licensee managing the branch on a full-time basis. None of this shifts responsibility: § 2919(d) puts the branch, its licensees and the supervisor under the broker's direction, and rule 1.3.5 says employing an on-site supervisor does not relieve the broker of any duty.

Under Delaware's Mortgage Rescue Fraud Protection Act, a foreclosure consultant may not claim, charge or collect any compensation until:

• a.The consultant has registered with the Attorney General and posted a surety bond
• b.The lender has agreed in writing to postpone the scheduled foreclosure sale
• c.Every service the consultant contracted or represented to perform is performed✓
• d.The homeowner's three-business-day right to rescind the consulting contract has run

6 Del. C. § 2415B(a)(1) forbids a foreclosure consultant to “claim, demand, charge, collect, or receive any compensation until after the foreclosure consultant has fully performed each and every service the foreclosure consultant contracted to perform or represented that the foreclosure consultant would perform.” The advance-fee ban is the heart of the chapter, so nothing short of full performance unlocks payment. The three-day period is real but belongs to a different transaction: § 2423B(b)(5) gives the homeowner until midnight of the third business day after signing to rescind a foreclosure RECONVEYANCE of the deed, whereas the consulting contract itself is cancellable at any time without penalty under § 2413B(e). Registration with the Attorney General and a bond are requirements of the separate Mortgage Loan Modification Services Act in chapter 24C. Brokers should note § 2403B(8), which puts a licensed real estate broker or salesperson outside chapter 24B while engaging in any activity for which the person is licensed, and § 2402B(11), which limits “residence in default” to owner-occupied property of no more than four dwelling units on which the mortgage is at least 60 days in default.

A Delaware manufactured home is sold and the buyer applies to the Division of Motor Vehicles for a certificate of title. The Division may not transfer that title until:

• a.A Delaware real estate licensee has certified the agreed sale price in writing
• b.All county taxes levied by the jurisdiction where the home sits are paid in full✓
• c.The home has been permanently affixed to a foundation and its title retired
• d.The manufactured home community owner has consented in writing to the sale

21 Del. C. § 2301(d) provides that “the Department shall not transfer the title of a mobile home or house trailer to a new owner until all county taxes levied by the jurisdiction in which the trailer is located have been paid in full,” which is why the county tax certification letter is the document that actually holds up these settlements. The affixation answer describes a practice with no Delaware statute behind it: nothing in Title 21 retires a manufactured home's certificate of title when the home is set on a foundation, and the only primary-source trace of the Class C recording idea is 9 Del. C. § 9605(i), which is limited to Kent County and conditioned on the county first authorizing it by ordinance. The community owner gets notice, not a veto: 25 Del. C. § 7013(c)(1)a.2 requires the homeowner to notify the community owner in writing no less than three weeks before the sale, with the buyer's name and address and the agreed price and terms. No licensee certification exists, though 21 Del. C. § 2302(e) makes a licensed Delaware dealer responsible for immediately submitting the title application.

Unfinished work turns up at the final settlement on a Delaware new home. The New Home Buyer Protection Act requires the seller to set aside from the proceeds a sum equal to:

• a.One percent of the contract price of the new home, held to settlement
• b.Ten percent of the contract price of the new home, held to settlement
• c.The buyer's own estimate of the cost, doubled as a statutory penalty
• d.The full contractual cost required to complete that unfinished work✓

6 Del. C. § 3602(a) requires the vendor or seller “to set aside from the proceeds of the sale a sum of money equal to the contractual cost required to complete any such unfinished work,” or the fair market value of completing it where the contract sets no cost, with the escrow agreement specifying the work at issue. The one percent figure is the trap and it is the most common error in Delaware study material: § 3602(d) uses one percent of the contract price as the THRESHOLD that brings the section into play, singly or in aggregate, not as the amount escrowed. Ten percent and a doubled buyer estimate appear nowhere in the chapter. Under § 3602(c) the money is released to the buyer if the work is not remedied within 90 days of final settlement or a date the parties set in the escrow agreement, and § 3602(b) allows it to be held no longer than 30 days after the work is finished. § 3602(e) turns the section off where the buyer unilaterally moves settlement earlier than the agreed date.

A Delaware broker is owed a commission on a shopping-center lease and wants to record an affidavit and notice of broker's lien. Under the Commercial Real Estate Broker's Lien Act that document may be filed only by:

• a.The recorder of deeds for the county in which the property is located
• b.An attorney-at-law admitted to the Delaware bar and in good standing there✓
• c.The broker personally, who must swear the affidavit before a notary public
• d.The brokerage organization's designated on-site supervisor for that office

25 Del. C. § 2604(c) says that “notwithstanding any other provision in this chapter, the affidavit and notice of broker's lien may only be filed by an attorney-at-law admitted to the bar of the Supreme Court of the State of Delaware and in good standing.” Delaware puts a lawyer between the broker and the land records, so a broker who swears and files the affidavit personally has not perfected anything, and neither a branch supervisor nor the recorder of deeds is a substitute — the recorder receives the filing rather than makes it. The rest of the chapter is equally particular: § 2605 requires recording within 90 days of the failure to pay and gives the notice a one-year life, § 2608 makes a late or irregular filing void and unenforceable, § 2602(1) excludes associate brokers and salespersons from the definition of broker, and § 2602(4) excludes one-to-four residential units, so this is a commercial remedy only. Every section of the chapter carries the bracket “[For application of this section, see 79 Del. Laws, c. 18, § 2]”.

A Delaware seller finances the sale of a single-family house. Unless the contract satisfies the conditional-sale requirements, it may not remain executory for longer than:

• a.Six months, renewable once by written agreement for up to six more✓
• b.Twelve months, renewable once by written agreement for up to twelve more
• c.Three months, with no renewal permitted anywhere in the statute
• d.Twenty-four months, renewable at the buyer's option before default

25 Del. C. § 314(c) provides that no seller-financed contract for consumer purpose property “shall remain executory for a period exceeding 6 months,” and that “the parties may renew the executory contract, by written agreement, for a period not exceeding more than an additional 6 months” — twelve months from execution to final settlement at the outside. Consumer purpose property is defined in the same subsection as one-to-four family residential real property used primarily for personal, family or household purposes, so apartment buildings and commercial property fall outside it and the other periods answer to nothing. A genuine contract for deed is still possible, but only through § 314(d), which permits deferring settlement to the last installment if the agreement states a periodic rental value no greater than 75 percent of the installment, a 120-day right to redeem after written notice of default, automatic conversion to a landlord-tenant agreement retroactive to the default, and treatment of the down payment as a security deposit. § 314(a) separately requires a complete amortization schedule signed by both parties.

A Delaware broker negotiates a loan modification with the lender on a distressed home. The broker falls outside the Mortgage Loan Modification Services Act only if:

• a.The broker holds an active license and reports the negotiation to the Commission
• b.The homeowner signs a written waiver of the Act before the negotiation begins
• c.The broker registers with the Attorney General and posts a $100,000 surety bond
• d.The brokerage has the home listed for sale and charges no extra fee to negotiate✓

6 Del. C. § 2403C(4) exempts “a person licensed as a real estate broker or real estate salesperson under Title 24 while negotiating with the mortgage loan holder on a dwelling that is listed for sale by the broker or brokerage organization as long as no additional fee is charged for the negotiation.” Both conditions have to hold, which is why a bare license plus a report to the Commission is not enough and why a short-sale negotiator who bills a separate negotiation fee drops straight back inside the Act. A consumer cannot waive it. Registration with the Attorney General, a $1,000 fee and a $100,000 corporate surety bond under § 2404C are what a non-exempt provider must do, so that option describes compliance rather than exemption. Note that this exemption is narrower than the one in the neighboring foreclosure-consultant chapter, where § 2403B(8) covers a licensee engaging in any activity for which the person is licensed.