Delaware Real Estate Broker Exam — All Questions

An affiliated licensee, acting within the scope of authority, misrepresents a material fact to a buyer. Under agency law, who may also be held responsible?

• a.Only the individual licensee
• b.The supervising broker, under vicarious liability✓
• c.The buyer, for failing to investigate
• d.No one, if the misstatement was unintentional

A broker acts as a general agent of the brokerage and is responsible for supervising affiliated licensees. Under respondeat superior and agency principles, a broker can bear vicarious liability for acts a licensee commits within the scope of authority, including misrepresentation. That is why supervision, training, written policies, and file review are core broker duties. The buyer's own investigation does not erase the firm's responsibility for a licensee's material misrepresentation.

A licensee wants to represent both the buyer and the seller in the same transaction. Under general agency principles, when is this permitted?

• a.Never, under any circumstances
• b.Automatically, because the broker holds both listings
• c.Only with the informed written consent of both parties✓
• d.Only if the buyer and seller are related

Dual agency, representing both buyer and seller in one transaction, creates a conflict of interest and is permitted only with the informed written consent of both parties. A dual agent may not advocate price or terms for either side and must protect each party's confidential information. Some states instead use designated agency, where different agents in one firm each represent one party, or a non-agency transaction-broker role. A broker must ensure no licensee slips into an undisclosed dual agency.

The fiduciary duties an agent owes a client are often remembered as OLD CAR. Which duty requires the agent to keep the client's motivation and bargaining position private, even after the transaction?

• a.Confidentiality✓
• b.Obedience
• c.Accounting
• d.Disclosure

Confidentiality requires the agent to protect the client's private information, such as the client's motivation, financial position, or the highest price a buyer will pay, and this duty generally survives the end of the transaction. Obedience is following lawful instructions; accounting is properly handling the client's money and documents; and disclosure is revealing material facts to the client. A broker must train agents that leaking a client's bargaining position, even casually, breaches the fiduciary duty of confidentiality.

A brokerage classifies its agents as independent contractors for tax purposes. What does this mean for the broker's duty to supervise them?

• a.The broker has no duty to supervise independent contractors
• b.Supervision passes to the multiple listing service
• c.Only the agents' own errors-and-omissions policy applies
• d.The broker must still supervise them under real estate license law✓

The independent-contractor classification is a tax and payroll concept; it does not relieve the broker of the license-law duty to supervise affiliated licensees. Regardless of tax status, the broker must train agents, review files, maintain written policies, and correct violations. Failure to supervise is itself a frequent ground for discipline against the broker even when the underlying mistake was the agent's. This distinction is a classic broker-exam trap that separates broker-level knowledge from salesperson-level knowledge.

A property manager is hired to operate an owner's apartment building over time with broad, ongoing authority. This licensee is best described as what kind of agent?

• a.A special agent
• b.A general agent✓
• c.A subagent of the tenants
• d.A dual agent

A property manager is typically a general agent, hired to handle a range of ongoing tasks (leasing, rent collection, maintenance, recordkeeping) with continuing authority to act for the owner. A special agent, by contrast, is hired for one specific task, like a listing agent selling a single property. The manager represents the owner, not the tenants, and is not a dual agent. Recognizing the general-agent role explains why the manager can bind the owner across many routine decisions.

To whom does a listing agent owe honesty and the disclosure of known material defects, but not loyalty or confidentiality?

• a.The seller who is the client
• b.The listing broker's other agents
• c.The buyer, who is a customer✓
• d.No one outside the brokerage

In a single-agency listing the seller is the client, owed full fiduciary duties. The buyer is a customer, owed honesty, fair dealing, and disclosure of known material defects, but not loyalty or confidentiality. A licensee must not misrepresent facts to a customer or conceal known latent defects, yet must still put the client's interests first. Brokers must ensure agents understand this client-versus-customer line so they neither over-promise to customers nor under-serve clients.