Delaware Real Estate Licensing Exam Practice Questions & Key Concepts

What type of deed is the standard-customary deed used in Delaware?

Special Warranty.

What granting clause phrase is required to create a special warranty deed in Delaware?

"Grant and convey"

What is the primary method used in Delaware for describing real property in a deed?

Metes and bounds & lot and blocks

Where must a licensee place their for sale sign in Delaware?

Outside the "clear zone".

Where can you find information regarding tax ditches affecting real property in Delaware?

The Prothonotary (also at DNREC and Recorder of Deeds).

What type of deed provides the grantee with the least amount of protection?

Quitclaim.

What type of deed provides the grantee with the greatest amount of protection?

General Warranty.

What is the realty transfer tax payable in a conveyance between grandson and grandfather in Delaware?

Is fully paid (half by grandfather half by grandson)

Where in Delaware would a person file a Fair Housing violation?

State Human Relations Commission.

What is listed as a Fair Housing protected class in the Delaware Residential Landlord-Tenant Code that is not listed under the State's Fair Housing Code?

Occupation

How many hours of Continuing Education are required for newly licensed individuals in Delaware?

Twelve hours of CE within 90 days

What information is not required on a Resale Certificate under the Delaware Uniform Common Interest Ownership Act?

Number of units that are non-owner occupied.

When must the seller furnish the Resale Certificate to the buyer under the Delaware Uniform Common Interest Ownership Act?

No later than the time of execution of the Agreement of Sale.

How long is the information in the Resale Certificate valid under the Delaware Uniform Common Interest Ownership Act?

120 days.

If the seller provides the Resale Certificate after the Agreement of Sale, how many days does the buyer have to cancel?

Five (5) days from receipt of the Resale Certificate.

What protected classes does the Delaware state Fair Housing Code protect that are not protected under the Federal Fair Housing Code?

Creed, Sex, Marital Status, Age, Sexual Orientation, Gender Identity, Source of Income and Housing Status.

What does a tax ditch affecting real property in Delaware create?

A tax ditch district where property owners pay a tax for maintenance of drainage ditches.

How do you convert a mobile home from being considered a vehicle to real property in Delaware?

By a process known as "retiring the title".

What is the transfer tax paid on the transfer of a mobile home in Delaware?

3.75% of purchase price.

What must a person performing a home inspection in Delaware do?

Be licensed as a Home Inspector by the Delaware Board of Home Inspectors.

Who appoints the members of the Delaware Real Estate Commission?

Appointed by the Governor.

How many members are in the Delaware Real Estate Commission?

Nine members, four public and five professional.

What is the best way for Dave to reserve a right to cross his sold parcels to access the public lake?

By reserving an easement in gross over 2 parcels

Who signs the listing agreement for the sale of a parcel co-owned by a husband and wife if the husband dies without a will?

The wife

When must a licensee renew their license with the Delaware Real Estate Commission?

April 30th biennially.

To whom does a licensee pay licensing fees for being licensed as a salesperson or broker?

The division of professional regulation.

What effect does a disciplinary sanction against a Salesperson have on their employing Broker?

No effect on the Broker unless the Broker had knowledge of the acts that resulted in the sanction.

What is the effect of the revocation of the Broker's license on the real estate service provider's licenses employed by the Broker?

No effect on the real estate service provider's licenses who are employed (directly or indirectly) by the Broker.

How long does the Broker have to deposit the earnest money deposit in the Broker's escrow account after receipt?

Within 72 hours of signing the agreement of sale by all parties, or by dates defined therein, excluding weekends and federal holidays.

How long does a salesperson have to pay over the earnest money deposit to their Broker after receipt?

Within 72 hours of signing the agreement of sale by all parties, or by dates defined therein, excluding weekends and federal holidays.

What happens if the balance of the Guaranty Fund falls below its minimum level of $250,000?

At the next license renewal date, assess each licensee a pro-rated fee in such amount that the Guaranty Fund will be returned to $250,000.00.

How does the Commission obtain the initial funding for the Guaranty Fund?

By a $25 fee paid by each licensee at each renewal period.

What is the pump out requirement for a septic system under Delaware Department of Natural Resources and Environmental Control Rules?

Once every five (5) years.

What is the total Realty Transfer Tax percentage in Delaware assuming no applicable transfer tax exemptions?

Will always be a total of 4%.

Who customarily pays the Realty Transfer Tax in Delaware?

Half by buyer and half by seller.

Which of the following is not required to have a license to negotiate loan modifications in Delaware?

Licensed home inspector.

What must be made available at an open house in Delaware?

The Consumer Information Statement.

What is the defined clear zone for placing for sale signs in Delaware?

10 feet from the paved edge of the public road.

When must the Consumer Information Statement (CIS) be delivered to the consumer?

No later than (a) the first scheduled appointment, (b) the first showing of a property; or (c) making an offer.

Who is required to receive a copy of the Agreement of Sale under the Real Estate Commission Rules?

Buyer and seller.

What common law water rights do you have with respect to a non-navigable stream adjacent to your property?

Riparian.

What happens when a father transfers ownership of a farm to his son for the son's life and the son transfers his ownership to Dave?

When father dies, Dave will be deemed the owner without son's life estate interest.

What do you own when you own a Condominium Unit?

Fee simple title to the space within the Condominium Unit and co-own an undivided percentage interest in the common elements with the other condominium unit owners.

What coverage does the owner's title insurance policy provide?

Protects both the buyer and buyer's lender when there is a title defect.

Which of the following is not considered a Psychologically Impacted Property?

An occupant of the property was infected by human immunodeficiency virus (HIV).

What is the Realty Transfer Tax status when a mother sells her real property to her son for $200,000?

Exempt.

To whom does the Delaware Fair Housing law not apply?

A dwelling occupied by two families living independent of one another, and the owner is NOT occupying one of such living quarters.

What happens if you fail to renew your Delaware license by the renewal date?

You may renew on a late basis for a period not to exceed 30 days with the submission of a late fee and shall not practice until renewed.

What period of time does the buyer have after a default to redeem the property in an installment sales contract in Delaware?

120 days.

Certificate of occupancy

issues once the completed structure has been inspected and found satisfactory

must be issued before anyone moves in and usually before a lender will allow closing

Licensee terminated by his broker because of unprofessional conduct…

Broker shall immediately notify the DREC

Under Delaware law, when are salespeople required to turn over escrow deposits to their brokers?

Promptly

Licensee accepts earnest money from a buyer. When are the funds required to be deposited into the broker's escrow account?

Within 72 hours of signing the agreement of sale.

The following party's/transaction are all exempt from transfer tax:

**transfers between parent and child

religious organizations

volunteer fire companies

Which transfer of property requires a Seller's Disclosure of Real Property Condition Report?

A sale of rural property.

the lease comes a month to month lease if the 60 days notice is not given before the expiration

The creation of the condominiums in Delaware require

a declaration
a declaration plan
and code of regulations

All of the following are exempt from the Delaware licensing laws

1. a property owner who sells or leases their own property
2.resident property manager at an apartment complex
3.power of attorney acting as owner of the property

Home inspectors statute

Home inspectors in Delaware must be licensed and registered with the state Board of Home Inspectors.

The licensee working with the consumer must deliver the CIS to the consumer no later than the earliest of:

The first scheduled appointment

The first showing of a property

The time when an offer is being made

Buyers/Sellers Agents Obligation's CIS

The (Seller’s) licensee is not required to provide the CIS to the buyer if they have (buyer’s) agent.

A buyer's licensee is not required to give a CIS to a seller who is working with a (seller’s) licensee

The Consumer Information Statement (CIS) is required for all transactions involving:

1 to 4 family residential properties

single lots intended for 1 to 4 family residences.

Tax Ditch

The tax ditch law provides the government the means to create, finance, oversee, and dissolve tax ditch organizations in Delaware to benefit the public’s health, safety, and welfare.

The seller must disclose the presence of a tax ditch on or bordering a property.

Real Estate Tax Return - Tax Form 5403

used to ensure that non-residents, corporations not incorporated or registered in Delaware, and pass-through entities pay income tax on capital gains from the sale of Delaware real estate.

Installment sales contract ( installment land contract or a contract for deed):

an agreement in which the buyer pays the seller the purchase price over time in a series of installments until the contract has been paid in full.

Seller holds the deed to the property until the purchase price is paid.

In Delaware, a purchase contract:

may not remain executory for longer than six months, with one six-month extension allowed if the parties agree in writing. (only 1-4 residential units, not larger or commercial)

Purchase Money Mortgages

must include an amortization schedule showing all payments the buyer must make according to the agreement.

All of the parties must sign it.

The purchase price in the contract must not include any interest from financing.

The commission can temporarily suspend a license without a hearing if:

it believes the licensee’s actions put the public in danger. In this case, the commission must hold a hearing within 60 days and render a decision within 30 days of the hearing.

Special Warranty Deed:

Protection only for the seller’s period of ownership

(mostly in commercial and REO)

Title insurance

Protects the buyer

Deed/Title Information

Any encroachments or title issues must be disclosed on the Seller’s Disclosure of Real Property Condition Report.

Inducement

anything a seller or agent offers to persuade someone to enter a real estate transaction

must be disclosed and not discriminatory

How many days does a licensee have to purchase and close on the property if it hasn't sold when the listing period expires?

60 Days

Broker’s license suspended, what immediately happens to all affiliated salespersons in the office?

license would be under suspension until signed on with another broker

In Delaware, the CIS form for Consumers Seeking to Rent Residential Property must be given to which of the following parties?

Prospective residential tenants who want to sign a lease for at least 120 days

Licensee Unathorized Practices of Law:

Real estate licensees are not authorized to practice law and must be careful to not mislead customers/clients with respect to their ability to assist with legal issues.

Drafting any legal document, including contingencies and addenda

Offering, giving, or attempting to give legal advice, whether directly or indirectly

How are common profits distributed in a condominium?

split among the unit owners based on each owner’s percentage share of the building’s common areas.

Seller’s disclosure of real property condition must be given:

to seller’s agent: before the property is shown or listed (at time of listing agreement)

to the buyer: before the buyer signs the agreement of sale.

→ must receive before making an offer or at the time of making the offer

CE license expiration:

If a licensee needs a waiver for completion of Delaware CE requirements, request must be submitted No later than 60 days before the biennial license renewal date

He may file a late renewal application up to 30 days after the expiration date in DELPROS

Condo meeting votes

At any meeting of unit owners, each unit owner is entitled to the same number of votes as the percentage of ownership in the common elements assigned to that unit owner

8% of ownership → 8 votes

Resale certification

When a unit owner requests a resale certificate from the association, the association has up to 10 days to provide the certificate.

may charge 250 for hard copy and 200 for electronic (only within the 10 days)

If the resale certificate isn’t provided to the buyer prior to signing the purchase contract, the buyer may cancel the contract within five days of receiving the resale certificate

When selling a home with a septic system in Delaware:

Inspect → Pump → Report → Repair if needed → Provide documents before closing.

pumped within 12 months of settlement!

Flood insurance:

must get through a private insurance company

→ not in standard insurance or required for all transactions

LT Code:

landlord must give free copy to tenant, along with free copy of lease

Renewal of licenses

must renew biennially by April 30th of even numbered years

Stigmatized Properties:

1. Properties that are the site of a homicide, suicide or felony (other than arson)

• Cannot disclose without client’s informed consent

• Unless the buyer makes a specific written request

• Then, Seller and agents must disclose what they know, but have no duty to investigate

2. Properties inhabited by a person with AIDs or HIV

• Never ever never disclose anything no matter what a buyer asks or puts in writing

3. Properties where sex offender lives near by

• No duty to disclose

Who disciplines licensees and brokers?

DREC

New licensees:

must do 12 hours of Newly Licensed courses within 90 days of licensure IN ADDITION to CE requirements

How many days before closing must the Closing Disclosure be provided to the borrower under Delaware law?

3 business days

When is the radon disclosure form required in Delaware real estate transactions? 

 for all residential property sales

Who creates and enforces the realtor code of ethics, provides education, resources, and advocacy for real estate professionals nationwide?

National Association of Realtors or (Delaware Association of Realtors DAR)

Who issues licenses to real estate agents and brokers, handles complaints and disciplinary actions, oversees forms, education requirements, and continuing education?

DREC

When do agents pay the guaranty fund?

One-time fee of $25. initial licensure