Key Takeaways
- Delaware licensees must adhere to standards of conduct outlined in state law and regulations
- Licensees must disclose all known material defects in property condition
- All offers must be presented promptly unless client directs otherwise in writing
- Licensees cannot make false or misleading statements about property
- Proper handling of deposits and escrow funds is required with specific timelines
Delaware Licensee Duties and Standards of Conduct
Delaware law and regulations establish specific duties that all licensees owe in real estate transactions.
Key Licensee Duties
Disclosure Requirements
Licensees must disclose to all parties:
| Disclosure | Requirement |
|---|---|
| Material defects | Known defects in property condition |
| Agency relationship | Who the licensee represents |
| Financial interest | Any personal interest in transaction |
| Referral arrangements | Affiliated business arrangements |
Material Defect Disclosure
A material defect is a condition that:
- Affects the value of the property
- Affects the desirability of the property
- Would influence a buyer's decision
- Is not readily observable
Licensees must disclose material defects they know about. Delaware also requires seller disclosure forms for residential properties.
Offer Presentation
Prompt Presentation Required
Licensees must present all offers:
- Promptly - Without unreasonable delay
- To the client - Present to the represented party
- All offers - Even if property is under contract
When Presentation Not Required
A licensee may skip presentation only if:
- The client has previously directed in writing not to receive certain offers
- The direction is specific and documented
Caution: Always document any direction from clients to not present offers.
Prohibited Conduct
Delaware law prohibits licensees from:
| Prohibited Act | Description |
|---|---|
| Misrepresentation | False statements about property |
| Fraud | Dishonest dealings |
| Commingling | Mixing escrow funds with personal funds |
| Self-dealing | Undisclosed personal interest |
| Discrimination | Fair housing violations |
| Unlicensed activity | Acting without proper license |
| Incompetence | Failure to act with reasonable skill |
Deposit and Escrow Handling
Deposit Requirements
| Requirement | Timeframe |
|---|---|
| Deposit to broker | Promptly (typically next business day) |
| Broker to escrow | Within specified time in agreement |
| Escrow account | Federally insured, designated escrow |
Deposit Holding Options
Delaware allows deposits to be held by:
- Broker's escrow account
- Title company/settlement agent
- Attorney's escrow account
- Other as agreed by parties
Interest-Bearing Accounts
If deposits are placed in interest-bearing accounts:
- Must have written agreement from all parties
- Agreement specifies who receives interest
- Proper accounting required
Record Keeping
Required Records
Brokers must maintain:
- Transaction documents
- Escrow account records
- Agreements and contracts
- Correspondence
- Disclosure forms
Retention Period
| Record Type | Retention |
|---|---|
| Transaction records | 3 years minimum |
| Escrow records | 3 years minimum |
| From transaction completion | 3 years |
Advertising Requirements
Required Elements
All advertising must include:
- Broker's name as registered with Commission
- Accurate representation of property
- No misleading statements
Prohibited in Advertising
- Advertising in salesperson's name only
- Misleading claims about property
- Discriminatory language
- False statements about terms
How long must Delaware brokers retain transaction records?
What must be included in all Delaware real estate advertising?