Real Estate Broker - Delaware State

Key Concepts

Purpose, Powers, and Composition

The Delaware Real Estate Commission operates under 24 Del.C. Ch. 29 and is administered through the Division of Professional Regulation (DPR). The Commission is authorized under 24 Del.C. §2906(a)(1) to adopt, amend, and enforce Rules and Regulations governing real estate licensees.

Key powers include: - Granting exceptions to Rules and Regulations upon a showing of good cause, provided exceptions don't conflict with 24 Del.C. Ch. 29 - Requiring each office location to operate under a licensed Broker with a minimum 5 years of continuous real estate experience for any Designated On-Site Supervisor (§2919(d)) - Disciplining both individual licensees and their sponsoring Broker (§2914)

Investigations, Hearings, and Appeals

• Complaints and disciplinary matters are handled through the Division of Professional Regulation
• Licensees must maintain a current address on file with the DPR; address changes must be reported within 30 days
• Confirmed delivery to the most recent address on file constitutes proper legal notice — failure to update does not excuse a licensee's responsibilities
• The Commission operates under the Administrative Procedure Act (29 Del.C. Ch. 101), which governs hearing and appeal procedures

Sanctions (24 Del.C. §2914)

The Commission may impose the following disciplinary sanctions: - Reprimand – formal written censure - Probation – continued licensure under specified conditions - Suspension – temporary loss of license privileges - Revocation – permanent loss of license - Fines – monetary penalties

Key Concepts

Activities Requiring a License

Anyone performing Real Estate Services for compensation must hold a Delaware license. The one notable statutory exemption: Auctioneers (as defined in 30 Del.C. §2301(a)(3)) are exempt — but only on the day of the auction itself. Pre-auction advertising is permitted. If the property is sold before or after the auction date by a broker, separate compensation rules apply under written cooperation agreements. [24 Del.C. §2901(e)(4); Rule 1.4.1.1]

Types of Licenses

Delaware issues three license types: - Salesperson — entry-level, must work under a sponsoring Broker - Associate Broker — licensed broker working under an employing Broker - Broker — may operate independently; must obtain a separate license for each office and each branch office [Rule 1.3.3]

Each branch office requires a Designated On-Site Supervisor who must be a Delaware licensee with a minimum of 5 years of continuous Real Estate Services experience, managing the branch on a full-time basis. [Rule 1.3.3]

Eligibility for Licensing — Salesperson

To qualify for a Salesperson license [24 Del.C. §2907; Rule 2.1]: - Complete the accredited Salesperson pre-licensing course through an approved provider - Pass both the general and State portions of the exam in no more than 3 attempts (per portion); if 3 attempts are exhausted, the pre-licensing course must be retaken - Apply within 12 months of completing the pre-licensing course; if more than 12 months pass, pro-rated continuing education must be submitted - Application must include: school certificate, written acceptance by a sponsoring Broker, and licensure history from any other jurisdiction (dated within 30 days of application) [Rule 2.2]

Key Concepts

Broker Responsibilities (24 Del.C. §§2902(a)(2), 2902(a)(11), 2919(d); Rule 1.3)

• The employing Broker is responsible for ensuring all licensees comply with Commission rules
• Brokers must verify all Salespersons and Associate Brokers are currently licensed, renew timely, and meet CE requirements
• Brokers must co-sign CE logs and retain CE certificates for at least 3 years after each renewal period
• Each office location — including branch offices — requires a separate broker license
• Designated On-Site Supervisor must be a Delaware licensee with minimum 5 years continuous real estate experience (documented on office application)
• Hiring a supervisor/manager does not relieve the Broker of responsibility

Agency Relationships

• Consumer Information Statement (CIS) must be presented at first substantive contact
• Presumed agency: if no written agreement exists, the licensee is presumed to represent the party they are working with
• Dual agency requires informed written consent from all parties
• Confidentiality: licensees cannot disclose a client's motivations, financial position, or negotiating position without consent
• Permitted actions in dual agency are restricted — a dual agent cannot advocate for one party over another

Disclosures

• Seller's Disclosure of Real Property Condition Report: required in most residential transactions; three forms exist depending on property type
• Exemption Property Certification form: used when a property qualifies for exemption from the full disclosure report
• Radon disclosure is required; exemptions apply (e.g., commercial property, new construction with radon-resistant features)
• Psychologically Impacted Properties: Delaware law does not require disclosure of murders, suicides, or alleged paranormal activity — these are NOT material facts
• Agricultural disclosures: required when property is adjacent to or near agricultural operations (Right-to-Farm…

Key Concepts

DUCIOA & Unit Property Act (Condos)

• Delaware Uniform Common Interest Ownership Act (DUCIOA) governs condos, cooperatives, and planned communities created after September 30, 2009. Older condos may still fall under the Unit Property Act.
• Resale Certificate is required when selling a unit in a common interest community. It must include: outstanding assessments, current budget, reserve fund status, pending litigation, HOA rules/bylaws, insurance info, and any right of first refusal.
• Buyer has 5 days to rescind after receiving the resale certificate.
• Homebuilder escrow deposits: New construction deposit funds must be held in escrow until settlement or written release by buyer.

Transfer Taxes

• Delaware imposes a realty transfer tax of 4% of the purchase price, split equally: 2% paid by buyer, 2% paid by seller (each party pays their half at settlement).
• First-time homebuyers receive a credit — the state's 1.5% share is waived, making the state portion 0.5% for the buyer.
• Form 5403 (Declaration of Estimated Income Tax) must be filed at settlement by non-resident sellers. Withholding is 6.75% of net proceeds for individuals and 8.7% for corporations.

Landlord-Tenant Code

• Governs residential rentals. Landlord must provide 12 days' notice to enter (except emergencies).
• Security deposit limit: 1 month's rent for leases over 1 year; no statutory limit for shorter leases, but customary practice is 1 month.
• Landlord must return deposit within 20 days of lease termination.

Key Concepts

Escrow Accounts

Brokers must maintain escrow/trust accounts separate from operating funds. Funds must be deposited promptly (within 2 banking days of receipt). The Broker is personally responsible for all escrow activity, including proper recordkeeping and reconciliation.

Examination of Records

The Commission has the right to examine a Broker's records at any time. Brokers must retain transaction records, continuing education certificates, and escrow documentation for a minimum of 3 years after the conclusion of each renewal period (§1.3.1).

Eligibility for Licensing

• Salesperson applicants must pass both general and state exam portions in no more than 3 attempts
• Application must be filed within 12 months of completing pre-licensing coursework
• If licensed in another jurisdiction, a licensure history dated within 30 days of application is required (§2.2.2)
• Written sponsoring Broker acceptance is mandatory

Place of Business — Supervision (§1.3.3)

• Each office location must have a licensed Broker in charge
• Branch offices require a Designated On-Site Supervisor (DOS) who must:
• Be a Delaware licensee
• Have a minimum of 5 years of continuous real estate services experience
• Manage the branch office full time
• Hiring a DOS or office manager does not relieve the Broker of supervisory responsibility (§1.3.5)
• If the sole licensed Broker is unexpectedly removed (death, resignation, illness, military service), a request for a temporary substitute Broker must be submitted to the Division of Professional Regulation (§1.3.4)