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Section 16: Delaware License Laws, Rules,
and Regulations Questions and Answers
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The Delaware Real Estate Commission - ✔✔The Delaware Real Estate Commission is the ultimate enforcer of real estate laws and regulations in Delaware. Commission Members and Qualifications - ✔✔-Composed of nine members, all appointed by the governor.
- All commission members must have resided in Delaware for 5 or longer directly prior to their appointment.
- Of the 9 members, 5 are real estate professionals: 3 brokers (one from each county), 1 associate broker, and 1 salesperson:
- The brokers and associate broker must have held active licenses for 5 or more years
- salesperson must have held an active license for 4 or more years.
- The governor appoints the remaining 4 members from the public at large: one from each county and the last from Wilmington.
- In the 8 years prior to appointment, no public member or an immediate family member may have held a real estate license, worked for a broker or brokerage, had financial interests in any business goods or services provided to licensees, or in any way be directly connected to the real estate industry.
- Further, none of the 9 members may serve as an elected official or in a leadership capacity of any other professional association of the real estate industry. Service Terms - ✔✔-Commission members serve a three-year term and may be reappointed to serve an additional term. In case of a vacancy, the governor may appoint someone to serve the remainder of the vacating member's term.
- Members earn $50 per meeting they attend, up to a maximum of $500 (or 10 meetings) annually.
Order and Meetings - ✔✔-Each year, members will elect a chairperson, vice chairperson, and a secretary to serve for one year only. This election should be held the same month annually.
- Business meetings should be held regularly and at least once per quarter. The chairperson or a majority of members may call for extra meetings as necessary. Special meetings require a quorum to attend.
- Copies of recorded meeting minutes will be provided to the Division of Professional Regulation, which oversees the real estate commission. Meetings that serve as hearings at which evidence will be given are required to be recorded in such a way that a verbatim transcript may be made. The person who requested the hearing must pay for the transcript's preparation. Suspension and Dismissal - ✔✔-The governor has the authority to suspend or dismiss members on the grounds of misfeasance, neglect of duty, misconduct, incompetence, unprofessional behavior, and the like. Neglect of duty includes three consecutive meeting absences without adequate reason, as well as the failure to attend more than half of the regular meetings during one calendar year.
- Members under investigation in disciplinary hearings will be suspended from commission business until the matter is satisfactorily resolved. They've Got the Power: Delaware Real Estate Commission - ✔✔The Delaware Real Estate Commission's main purpose is to protect the public with regard to real estate services. Unsafe or unfair practices, diminished competition that limits consumer choices, and the like not only harm Delaware citizens, but they also harm the entire real estate profession. To keep things on the up and up, the commission oversees real estate activities throughout the state. Duties and power of the commission - ✔✔-Developing standards for the industry
- Creating rules and regulations
- Granting and renewing licenses
- Conducting audits
- Monitoring complaints
- Conducting formal hearings and imposing sanctions Licensure - ✔✔-The commission has the power to develop licensure qualifications and to evaluate candidates based on these criteria. The commission then both grants and renews licenses of candidates who meet the requirements. Applicants' certified records may be assessed for evidence of unfair or illegal practices and other offenses before license approval.
licensing laws - ✔✔State laws that authorize persons who meet specified qualifications to engage in a business or profession. Licensing helps ensure that licensees have adequate: - ✔✔-Education knowledge, and supervision, and it provides regulatory oversight, and the ability to discipline those who violate the rules of the profession.
- In Delaware, only people who hold real estate licenses may represent themselves to the public as a real estate professional or provide real estate services for consumers
- Business entities that provide real estate activities must engage a licensed real estate broker at minimum. The broker may supervise licensed associate brokers and salespersons. Violation - ✔✔-Anyone in violation may be called before the justices of the peace for a misdemeanor hearing, and disciplinary sanctions may be imposed.
- Financial penalties include fines between $500 and $5,000 for a first offense. Second convictions carry fines between $1,000 and $10,000 per offense. The justices of the peace have jurisdiction over all such violations. Exemptions - ✔✔-Owners, lessors, buyers, or lessees (or their employees) who perform real estate activities on their own behalf
- Companies, subsidiaries, or divisions that perform real estate activities for their own properties in the regular course of management or investment business
- Anyone acting as an attorney in fact under an executed power of attorney whose duties include real estate transactions
- Attorneys-at-law performing legal services for a client or their salaried employees
- Receivers or trustees in bankruptcy, or persons acting under court order
- Trustees selling real property under a deed of trust
- Auctioneers Review the activities that require a real estate license and the exceptions, take a look at your resource and indicate the actions that require a real estate license. A.) Joan has noticed a huge real estate boom in her neighborhood, and she wants to get in on the action so she can earn money selling real estate.
B.) Enrique has designed the most amazing marketing materials for some houses for sale and plans to have fliers printed up with his contact info and commission rates on them. C.) To get a jump start on the housing boom in town, Beverly joins a few professional associations and introduces herself as a commissioned real estate professional at the meetings. D.) Howard sees an ad for a foreclosure sale in Smyrna. When he goes to check it out, he gets the idea that he might like to buy and sell real estate. - ✔✔A, B, & C Review this list and select the activities that require a license in Delaware. A) Referring to yourself as a CRB—certified real estate broker B) Adding "real estate professional" after your name on your business cards C) Earning your primary income through owning rental properties D) Working as a personal assistant to a licensed real estate broker - ✔✔A & B Review each scenario and determine if a person performing the activity needs a license or not. - ✔✔Doesn't:
- Kurt's personal assistant, Goldie, makes calls on his behalf to set appointments for showings.
- Homer and Marge decide to sell their vacation home as a For Sale by Owner because the market is hot. They already know plenty of potential buyers and don't need an agent to market their home.
- Jamie has been appointed as executor of Justin Willis's estate. Justin recently passed away, leaving no heirs or will, but he owned a ranch in Sussex County that Jamie must sell. Does need:
- Bill just had magnetic signs made for his car that say "Bill Fry, the House Guy—CRB."
- Jean has made business cards that read: "Home is where you put your heart and your junk! Let an accredited and certified real estate professional find your heart and junk the perfect place."
- Lex is busy networking at a real estate conference. He bought booth space and plans to market his services as a professional real estate broker. Situations that would render someone ineligible for licensure include: - ✔✔-Any disciplinary actions involving real estate services in Delaware or elsewhere, such as fines, formal reprimands, license
*Reserves three hours for an examination. Students mustpass each of these three exams with a score of at least 70%. Proctoring is not required. A Salesperson has to take both the & - ✔✔general and state segments of the salesperson exam with an approved testing service and pass in no more than three attempts If applicants can't pass the exam in three or fewer attempts, they'll need to re-take the salesperson pre- licensing course to be eligible to attempt the exam again. Associate Broker / Broker - ✔✔23+ years of age 96+ hrs of accredited broker pre-licensing education:
- 30 hrs of Sales Management and Business Management
- 6 hrs of Real Estate Documents
- 6 hrs of Valuing Real Property
- 9 hrs of Financing
- 9 hrs of Landlord Tenant Code/Property Management/Condos
- 15 hrs of Legal and Governmental Aspects of Real Estate
- 12 hrs of Real Estate Investment
- 6 hrs of Ethics
- 3 hrs of Review of Basic Real Estate Math *Take and pass a course exam with a score of 75% or better When applicants are licensed as brokers in other areas besides Delaware, any broker pre-licensing course hours they've completed elsewhere may go toward course hours in Delaware. An Associate Broker / Broker has to take both the & - ✔✔general and state segments of the broker exam with an approved testing service and pass in no more than three attempts
If applicants can't pass the exam in three or fewer attempts, they'll need to re-take the broker pre- licensing course to be eligible to attempt the exam again. Experience requirements for broker applicants - ✔✔• Associate broker candidates must have held a salesperson license in Delaware or elsewhere for 5 concurrent years prior to applying.
- Broker candidates must submit proof that they've been actively working in real estate as either a licensed salesperson or licensed associate broker for 3 years just prior to applying for broker licensure. Which License? (Examples) - ✔✔-Karen has been a licensed real estate professional for 22 months and has a degree in education with a minor in communications. (Salesperson)
- Joey used his real estate license for seven years in his friend's house flipping business. He's just finished 96 hours of coursework and passed his exams. (Associate Broker)
- Gus has made a successful career in real estate for four years and plans to go out on his own. He wrapped up the required coursework, passed the exams, and applied for his new license—which came in the mail today. (Broker) The Next Steps in Obtaining Your Delaware Real Estate License - ✔✔-Interview brokers
- Make a reservation or appointment to take the state exam
- Pay the examination fee
- Submit your salesperson exam results and your license application and pay the applicable fees. Division of Professional Regulation will notify applicant of... - ✔✔of approval/denial and reasons after receipt of application and supporting documentation. Salesperson License Application Steps - ✔✔- 99 - hour Delaware pre-licensing course with a commission- approved course provider.
- Pass the salesperson exam in 3 or fewer attempts (If unable to pass in three attempts, the applicant must re-take the salesperson pre-license course).
- Create a user account on the Delaware Professional Regulation Online Service (DELPROS) (https://delpros.delaware.gov /).
- Complete the online application & Upload any supporting documentation (such as a copy of the certificate(s) of course completion, as well as a broker's written acceptance via the Statement of Broker
Reciprocity - ✔✔Delaware's license application will ask whether you are applying by examination or reciprocity. If you hold a current, active real estate license in another jurisdiction (state, U.S. territory or District of Columbia), you can apply for a reciprocal license, otherwise, applicants who do not hold a current, active license in another jurisdiction will select examination. PATH TO YOUR DELAWARE REAL ESTATE LICENSE - ✔✔1. Successfully complete final exams for all pre- licensing courses
- Start interviewing brokers for affiliation. This is an important decision. Do not take this lightly!
- Make a reservation or appointment to take the state exam
- Pay the exam fee
- Successfully pass the state exam
- Submit your salesperson exam results and your license application, and pay your fees Important Considerations when affiliating with a Broker in Delaware - ✔✔-Firm Location, Longevity, and Size
- Firm Reputation
- Firm Specialities
- Training and Administrative Support
- Compensation
- Policies and Procedures
- Culture
- Personality Broker affiliation means - ✔✔that you select a qualifying broker who'll maintain your license in the broker's office. This broker agrees to supervise and train you and is responsible for your actions while your license is under that broker. During the period of your affiliation, all listing and buyer representation agreements you sign, and all real estate services and marketing activities you perform, are done in your broker's name. Affiliating with a Second (or More) Broker - ✔✔Affiliating with a second, or more broker allows you to gain additional experiences and explore other interests. For example, you may choose to affiliate with a broker who specializes in construction and realize you also have an interest in commercial properties so you chose to affiliate with another broker with that specialty.
The steps to affiliating with a Second (or More) broker - ✔✔-Give written notice to each broker with whom you're currently affiliated that you plan to affiliate with an additional broker and obtain written approval from each one.
- Obtain a written commitment from the additional broker with whom you'd like to affiliate.
- Obtain an additional license for the new broker's firm. Important Considerations when affiliating with a Broker in Delaware: Firm Specialities - ✔✔Some firms work mostly with resale, construction, or commercial properties, while others specialize in property management. Is the firm's specialty an area you like? If you already have a neighborhood in mind, sometimes a top producer will have it "sewn up," and marketing there may step on toes and get you nowhere, so it's best to know that up front. Important Considerations when affiliating with a Broker in Delaware: Compensation - ✔✔As a licensee, you'll likely be an independent contractor. You'll be responsible for finding your own business, and you won't get a paycheck unless you make a sale. Your commission will be a "split," or percentage, of what the brokerage receives from each transaction you complete. The amount of the split varies with the brokerage and should be considered in addition to other elements of your agreement. Some firms, for instance, may allow you a larger split but also will charge a desk fee of, say, $20,000 per year that you'll pay out of the commissions that you earn. Those fees (if charged) will come straight out of your paycheck; the broker takes 50% of your split until the fees are paid off. If you use transaction or advertising services, those fees may also need to be paid from your commission. Important Considerations when affiliating with a Broker in Delaware: Policies and Procedures - ✔✔You should ask to see a copy of the firm's policies and procedures manual. A good broker will have policies clearly spelled out to protect everyone from liability. The thoroughness of a policies and procedures manual can speak to the professionalism of the office. License Changes in Delaware may occur when: - ✔✔-Transferring to a new broker
- Placing a license in inactive status
- Requesting to terminate
- Cancelling a license
- Changing a name or address, either personal or business
- Changing broker type
However, for lapsed-must reinstate status, you'll need to apply for a license reinstatement in DELPROS. Without reinstating your license, you can't legally perform real estate activities. The commission needs to review these applications at its monthly meeting, so make sure the commission receives these request before 4:30 p.m. 10 business days before the commission's next meeting to ensure you're application will be reviewed. The commission may reject applications not completed within one year of filing. The commission may also require you to re-take portions of the licensing exam. License reactivation requirements - ✔✔If your license has been on inactive status, and you're ready to reactivate it and get back in the business, submit a 'Reactivation of Inactive Licenses' service request. Renewal Period - ✔✔the 2 - year period immediately before the renewal date. Delaware licensees renew their licenses to practice real estate (either active or inactive) biennially and before the expiration date of April 30 in even-numbered years (e.g., 2018, 2020, etc.). The commission mails renewal notices a few weeks before the expiration date. However, if the commission fails to send a notice or you fail to receive one, you're still responsible for renewal, and your license will become invalid after the expiration date. Renewal process - ✔✔License renewals are contingent upon licensees with active licenses satisfying the continuing education requirements and paying the renewal fee. Renewals in Delaware are completed online at https://delpros.delaware.gov/, and a credit card is required for payment. During the renewal process, you'll need to electronically attest to your CE completion, and your broker will need to ensure that all affiliated licensees have completed their CE requirements and to maintain CE certificate copies for at least three years. Should you be selected for a random CE compliance audit, you'll need to provide your certificate of CE course attendance, as well as your attestation. Inactive Licenses - ✔✔Licensees with inactive licenses must still renew. However, no CE is required, and they may not practice in Delaware with an inactive license. They must reactivate their license to get back into the business. Late Renewal - ✔✔If you neglect to renew before the expiration date, your license will expire, and you may not practice real estate until your license is renewed. You may apply late for renewal up to 60 days after the expiration date, but you'll have to pay a late fee in addition to the renewal fee.
If you don't renew in 60 days, your license will terminate, and you'll need to reinstate it before you can practice real estate in Delaware. Reinstating a License - ✔✔-In order to reinstate a terminated license, you'll have to provide proof of meeting CE requirements, pass any exams the commission may require, and pay all fees.
- If 6 months pass and you still haven't reinstated your license, you'll be required to re- take the state segment of the real estate exam.
- If 2 years pass, you'll need to pass both the state and the general segments of the exam. Getting a New License After a Revocation Anyone whose license is revoked must wait 2 years from the date of revocation before the commission will allow re-licensing. The following requirements apply: - ✔✔-Take and pass the appropriate real estate course for salespersons or brokers
- Take and pass the licensing exam
- Meet any other conditions the commission may set Even so, the commission isn't compelled to issue the applicant a new license. And if a former license holder's license has been permanently revoked, re-licensing isn't an option. That individual is permanently barred from the business. License Services for Military Personnel - ✔✔-License/Permit Continuation for Active Military: A qualified licensee may apply to have their real estate license remain active while deployed. The licensee is protected from expiration under this provision; however, all licensure requirements must still be met.
- Provisional License: A qualified service member or their spouse may apply for a provisional license to practice real estate in Delaware for up to six months while their application for a Delaware professional real estate license is pending. When does a real estate license in Delaware need to be renewed? - ✔✔Biennially and before the expiration date of April 30 in even years. How many hours of CE are you required to take after your first renewal period? - ✔✔ 21 hours
course completion; 21 hours of CE between 18 and 24 months after course completion; and then two hours of CE for each biennial renewal period 24 months after course completion. CE Compliance Audits - ✔✔-When the commission selects licensees for audits, it will notify licensees 60 days after June 30 of each two-year renewal period.
- Licensees who renew their licenses late under the late-renewal provision are subject to a CE audit.
- Selected licensees have 20 days to submit CE verification, which should include any necessary information regarding whether their coursework meets CE requirements. Acceptable verification includes official certificates of completion from the course provider.
- The commission will review all documents submitted for a CE audit. If the commission decides that a licensee hasn't met the CE requirements, it will notify the licensee and hold a hearing per the Administrative Procedure Act. Waivers - ✔✔-The commission may waive or postpone such requirements for illness, injury, family or financial hardship, etc. But these requests must be made no later than 60 days before the biennial license renewal date. CE Substitutions - ✔✔-Commission members who attend 80% or more of commission meetings during a biennial licensure period earn one CE hour for each meeting attended.
- Licensees who complete an approved Delaware broker's licensing course will earn 21 hours of CE credit.
- Licensees who take an out-of-state broker's licensing course of 99+ hours will earn 18 hours of CE credit.
- Licensees who successfully complete six or more hours of a national accreditation program and earn a nationally recognized designation or provide proof of successfully completing a section in a nationally recognized designation program earn six hours of CE. Salesperson applicants must be at least of age to be eligible for a Delaware real estate license. - ✔✔ 18 If you choose to affiliate with more than one broker, which of these is a step you must take? - ✔✔Obtain an additional license for the new broker's firm.
What is a requirement of ALL levels of real estate licensure in Delaware? - ✔✔Be competent to transact the business for which the individual is licensed, and do so in a manner that safeguards the public's interests. Which of the following may a person who doesn't hold a Delaware real estate license do? - ✔✔Sell property as an executor of a will Which of these is a complete list of the types of real estate licenses in Delaware? - ✔✔Broker, associate broker, salesperson Avoid the following violations: - ✔✔-Misrepresentations or false promises that would presumably persuade or influence a consumer
- Persistent misrepresentation or false promises through advertising
- Failure to account for or submit escrow funds within a reasonable time period
- Negligent or incompetent real estate activities
- Commission, compensation, or valuable consideration violations, including written disclosure rules violations
- Rules and regulations violations
- Misrepresentation of the seller's disclosure of real property conditions or radon disclosure
- Fraudulent or deceptive practices in gaining or renewing a real estate license or representation as a real estate professional
- Conviction of a crime significantly related to real estate
- Disciplinary actions in another jurisdiction, such as license suspension or revocation, including failure to notify the commission of such disciplinary actions
- Illegal practice of real estate or assistance to another person to practice real estate illegally Investigations - ✔✔-After complaint is filed the director will fill out a complaint card, issue a complaint number, and log the complaint in the division's records within 15 days. Then the director will assign an investigator to look into the complaint details.
- A commission member, who isn't allowed to discuss anything about the investigation, may be selected to serve as a confidential advisor on the investigation. If a hearing will be held, the member may be excused from regular commission duties to assist with the hearing.
Revoked License Reinstatement - ✔✔Licensees with a revoked license must wait at least two years before they'll be considered for a new license. The following requirements apply:
- Take and pass either the salesperson or broker licensing course, whichever applies
- Pass the appropriate exam
- Meet any other requirements the commission sets The commission has the discretion to deny the application even after these requirements have been met. Once a license is permanently revoked, the former licensee is no longer eligible for a real estate license. Guaranty Fund - ✔✔When a person wins a judgment against a licensee for any losses or damages due to theft, forgery, fraud, misrepresentation, or other deceit, the person may be awarded compensation. The commission maintains a real estate guaranty fund for situations in which aggrieved persons have trouble collecting the entire amount of the judgment. To receive compensation from the fund, the injured party should - ✔✔file a claim with the commission for any amount of the judgment that remains unpaid within 60 days of the final judgment. This claim needs to include a copy of the complaint, any counter-claim, a certified copy of the judgment, and copies of any documentation regarding the party's attempts to collect on the judgment. To collect from the fund, an aggrieved person: - ✔✔-May not be married to the judgment debtor or be the spouse's personal representative
- Must comply with all requirements
- Must have obtained a final judgment stating the amount of compensation and the amount remaining to be paid when the claim was filed
- Must have taken steps to collect the full amount, albeit unsuccessfully, and attempted all other remedies If the requirements to collect funds are met, the commission may order payment from the fund in an amount still uncollected on the claim or another amount at the commission's discretion, up to
- ✔✔$25,000 per one transaction or claim. If the fund doesn't hold sufficient funds to cover an authorized claim, either in full or in part, the commission will cover unpaid claims (and accrued
interest) up to $25,000 per the maximum, in the order they were filed once sufficient deposits have been added to the fund account. How much can one get fined for filing a false claim? - ✔✔Anyone who files a false claim will be fined between $500 and $5,000. Delaware Real Estate Guaranty Fund Partial Payments - ✔✔In cases of a compromise or at the commission's discretion, the sum awarded from the fund will be less than the total judgment. The judgment creditor will then release the commission from the responsibility to pay more and will also pass on the right, title, and interest in the judgment to the commission. Any funds the commission is able to recover from the judgment debtor (the licensee) will be deposited into the guaranty fund. Delaware Real Estate Guaranty Fund Licensee responsibilities - ✔✔Licensees against whom judgments are made and funds are collected from the fund may have their licenses suspended or revoked. The commission may opt to continue a suspension or revocation until a licensee can repay any amount disbursed from the fund on behalf of the licensee in full, plus interest. Bankruptcy is not a defense. Maintaining the Guaranty Fund - ✔✔Delaware licensees must each pay a $25 fee to be deposited into the guaranty fund. This is a one-time fee unless the fund balance falls below $250,000, at which point an assessment will be required. The fund account must bear interest, and accrued interest will cover items such as:
- The commission's costs to administer the fund
- Seminars and continuing education for licensees in the state
- Reimbursement for commissioners, staff, and attorneys for expenses related to attending the Association of Real Estate License Law Officials meetings In order to receive compensation from the real estate guaranty fund, how much time does an aggrieved party to file a claim after the final judgment is issued? - ✔✔60 days Buyer Darrin believes his real estate agent talked him into paying too much for the condo he bought. He's angry and wants to file a complaint against the agent. What should he do? - ✔✔File a written
