DE Real Estate Law Exam

The Delaware Mortgage Loan Modification Services Act (MLMSA) requires mortgage loan modification service providers to obtain a ______ surety bond to provide coverage to consumers who suffer damages due to the provider's misrepresentation, wrongful acts, etc.

$100,000

The Marsdens recently sued their Delaware real estate broker for fraud and won their case. When the broker was only able to pay less than half of the amount the court awarded to the Marsdens, which was $300,000, they applied to the Guaranty Fund. What's the most the fund will give them for this single claim?

$25,000

After operating the firm for 17 years, Trethlon Manufacturing just sold its entire operation for $5.7 million. The adjusted purchase price was $3.9 million. While the corporation ran the business, it spent $970,000 on capital improvements. Real estate commissions and other costs of the sale were $358,000. What is Trethlon's capital gain?

$472,000; Trethlon's adjusted basis in the property is $3,900,000 + $970,000 + $ 358,000 = $5,228,000. $5,700,000 - $5,228,000 = $472,000.

Tina has fee simple ownership of her timeshare unit. Which of these is NOT an example of the type of ownership she may have? 1. Right-to-use 2. Interval ownership 3. Tenancy in common 4. Timeshare estate

1. Right-to-use, Right-to-use timeshare is a lease agreement, not an ownership interest.

Delaware resident Andie pays her rent in cash every month. How long does her landlord, Jenna, have to provide her with a receipt for her rent payment?

15 days

Angelique, a foreign investor, is getting ready to sell her urban condo. What percentage of withholding of the sales price will FIRPTA require?

15%

Licensees who take an out-of-state broker's licensing course of 99+ hours will earn ____ hours of CE credit in Delaware.

18

if the criteria is met, which of the following is deductible on an income tax return? 1. Closing costs 2. Furnishings 3. Loan origination fee 4. Travel

3. Loan origination fee

Which of these would void a deed intended to convey property? 1. The grantee is not mentally competent. 2. The grantee's signature is not acknowledged. 3. The grantor is not mentally competent. 4. The transfer includes no monetary consideration.

3. The GRANTOR is not mentally competent.

How many days do you have to notify the Delaware Real Estate Commission after you change your address?

30 days

Per FIRPTA, trusts with foreign beneficiaries must withhold what percentage from the sale of U. S. properties?

35%

Sussex County taxes at ______% of the assessed value.

50%

If licensees advertise they will buy a home that they can't sell, how many days do they have to purchase and close on the property if it hasn't sold when the listing period expires?

60 days

Subdivision financing usually comes from _____________________.

A combination of sources.

What is a principal meridian?

A north-south line used as a reference point in the rectangular government survey system

What is a section?

A one-square-mile square formed in the use of the rectangular government survey system

What is an annual percentage rate?

A standardized measure for interest rates and other costs of the loan

Which of the following is an example of constructive eviction?

A tenant moves out of the apartment after repeated unsuccessful requests to the landlord to repair the broken water heater.

Kenneth entered into a contract to sell his home to Valerie, who put down a $5,000 earnest money deposit. At the last minute, Valerie backed out of the deal and Kenneth kept the earnest deposit. This is an example of ______.

Accepting liquidated damages

Alluvion describes new deposits of land that are the result of what natural process?

Accretion

What's the term for a notice given directly to and received by a person?

Actual Notice

Related to the legal test of a fixture, in the acronym MARIA, what do the two As stand for?

Adaptability of item to land's use and agreement of the parties

Paulina is buying her first house. Which of these costs will she NOT be expected to pay?

Agent's commission

Kristy is a Delaware salesperson associated with RBJ Realty. When her broker is convicted of embezzlement, and his license is revoked, what happens to Kristy and the rest of the licensees at RBJ Realty?

All licensees would be in the same boat as Kristy, whose license would be under suspension until she signed on with another broker.

Will was sued for damages related to a car accident in which he was involved last year. As part of the proceedings, the court placed a lien against his primary residence. What type of lien is this?

Attachment

Ken, Barbie, and Skipper owned a property as a joint tenancy. When Skipper moved out of state, she sold her interest to Midge. Two years later, Ken died. How is the interest in the property divided?

Barbie owns two-thirds, and Midge owns one-third.

In a face-to-face closing, who meets with whom?

Both the buyer and seller

The ______ is usually responsible for ordering and reviewing the survey of the property.

Buyer

Clint was looking for alternatives to the traditional vacation condo rental for his family. He purchased the right to use a given set of facilities at any point throughout the year. What did Clint purchase?

Campground membership

What does the metes and bounds system use to develop a property's legal description?

Compass headings and directions

In a real estate transaction, which of the following is established when the parties enter into an agreement voluntarily with full understanding of the contract terms?

Consent

The ______ uses education, enforcement, and research to promote fairness and transparency for consumer financial services.

Consumer Financial Protection Bureau

In Delaware, the residents of one of these communities have a right to be notified of the community's impending sale and to take steps to become the community's owners themselves. Which one?

Cozy Cottage Mobile Home Park, a family-friendly mobile home community on eight acres

Kurt bought a vacant lot in a development that was 85% completed. When he started working with the builder to lay out where the house and driveway would be, they found he would need an easement because his driveway would spill over onto the adjacent lot by a few feet. Kurt owns the _______ estate or tenement.

Dominant

Which of the following scenarios is an example of novation?

Doug is buying Norm's farm, but has a serious accident and no longer wants to own a farm, so his daughter Linda decides to buy the property. Norm agrees to the substitution of Linda for Doug in the purchase contract, effectively creating a new contract.

Residents of Tinytown have been complaining to town officials that the village-like character of their town is being affected by the medium-rise condos that developers are building on the edge of town. In response, local government officials rezoned the areas on the edges of town as parklands. What type of zoning is this?

Downzoning

Kurt bought a vacant lot in a development that was 85% completed. When he started working with the builder to lay out where the house and driveway would lie, it was determined that he would need an easement because his driveway would spill over onto the adjacent lot by a few feet. What type of easement is this?

Easement appurtenant

Because of the topography of Elsie's and Lawrence's respective yards, Elsie had to install her fence at the top of a hill, which is actually two feet over Lawrence's property line. What word or phrase best describes Elsie's fence?

Encroachment

What is one of the many ways the Consumer Protection Unit protects Delaware citizens from fraud?

Enforcement action against violators

James Sawyer evicted his tenant, Kate Abbot, for nonpayment. However, she didn't vacate the apartment after the required 72 hours and has yet to move out. This is an example of _______.

Estate at sufferance.

Which type of leasehold lasts for a defined period of time and automatically terminates when that period ends?

Estate for years

Terry has a costume shop in a commercial building. He has a one-year lease that automatically renews for another year unless either Terry or the landlord terminates. What type of leasehold estate is this?

Estate from period-to-period

Which type of deed conveys real property from a decedents estate to a buyer?

Executor's Deed

Local authorities lack police power over which of the following?

Federal government construction projects.

What information does the Loan Estimate NOT provide to buyers under required disclosures law?

Final closing costs

Instead of paying part or all of the security deposit, tenant Terry decides to purchase a surety bond. His landlord agrees he can do this. From where must he purchase this bond?

From a carrier licensed by the Delaware Department of Insurance

What is an example of "good consideration" in real estate?

Gifting a house to a family member.

Mike missed the renewal date for his Delaware license. Which of these statements is true?

He can still renew if he does so within 60 days of expiration. He must meet his CE requirements and pay a late fee.

Which of the following specifies a requirement of pre-loan counseling for consumers?

Homeowner and Equity Protection Act

Your neighbor hires a middle school student to mow his lawn every two weeks. He draws up a written contract in which he clearly outlines the student's mowing responsibilities and the payment the student will receive in return. Which of the following is true in this situation?

If the neighbor and the student are content to uphold their agreement, the fact that it's not legally binding doesn't matter.

Which type of contract is the opposite of an express contract? 1. Bilateral 2. Executory 3. Implied 4. Voidable

Implied

In addition to reimbursing the guaranty fund for payments made on their behalf, what else will licensees have to pay?

Interest

One of the ways the Office of the State Bank Commissioner protects consumers from predatory lending practices is _____.

Investigating consumer complaints

From an agent's perspective, what's one benefit of a buyer representation agreement?

It defines how and how much the agent will be paid.

In a title theory state, which of the following is a true statement?

It's generally much easier for a lender to foreclose on a property.

The Delaware property Kelly is selling to John has a recorded easement for the utility company and a lien recorded against it because of Kelly's outstanding credit card debt. How will this affect the transfer of title from Kelly to John?

Kelly must deliver title to John clear of liens and encumbrances, though the recorded easement is allowed.

The CFPB uses education to accomplish its mission, such as the ______ publications

Know Before You Owe

Who usually represents the lender at a closing?

Lender's attorney

After Wynn and Lianne enter into a contract for Lianne to buy Wynn's house, Lianne finds out that there are serious problems with the foundation. Lianne has already signed the contract. Which of the following can she do, if anything?

Lianne can declare the contract void, since a possible misrepresentation of the property invalidated her consent.

Steven owns 114 acres of wooded, rural land. The abundance of wildlife on his property means that his friends are always asking for permission to hunt on it during various game seasons. If Steven gives a friend permission to hunt on his land, it can be said that he has given his friend a ______.

License

Mariel is buying a home and is looking forward to the tax deductions. She may deduct which of the following?

Loan origination fee

Which of the following is a true statement about police power and public land use controls?

Local governments and their planning boards control budgeting, site-plan review, and building codes.

Which type of legal description is this: "Plat of Block 28, Woodmen Heights Tract, recorded in Map Book 27, page 68, at the Eldor County Records Office"?

Lot & block

Which type of legal description do courts prefer?

Lot and block

Lucas, Ivan, Chad, and Trace own a property as joint tenants. After a few years, Ivan sells his interest to Tom (with permission from Lucas, Chad, and Trace). Chad dies intestate but is survived by a wife, Amy. Trace also then passes away but wills his property to Monique. Who owns the property after Trace's death?

Lucas and Tom

Delaware residents who convey real property _____.

Must check the box on Form 5403 that identifies them as state residents, and then file a separate Delaware resident income tax form

In which of the following situations does FIRPTA apply?

Nadia is a resident of Eastern Europe and is not a U.S. citizen. She sold her property located in the U.S.

In Delaware, a licensee who offers a commission rebate to a seller client is guilty of ______.

Nothing, since this is legal in Delaware

George has passed his pre-licensing course, and is ready to complete the requirements for a salesperson license. Which of these is NOT a requirement to obtain his Delaware license?

Obtain approval from the Delaware Association of REALTORS®.

A taxpayer can claim a capital gains exclusion _______.

Once every two years.

Under the terms of a Delaware commercial lease, tenants' property and goods can be seized and sold to pay past due rent not to exceed _________.

One year

Cluster zoning would include single-family homes, townhomes, apartments, and condominiums on a single parcel, provided that the developer leaves a portion ________.

Open for a playground, a park, and a walking path.

What might the government do if property owners fail to pay taxes on their property?

Place a lien on the property.

What does the lot and block system use to develop a property's legal description?

Plat references

Which of the following is a key consideration and starting reference for a metes and bounds description?

Point of beginning

Which of these acts has special provisions for borrowers who are victims of over-charging?

Real Estate Settlement Procedures Act

Two examples of loan adjustments or modifications are moratorium and ______.

Recasting

Cheng is selling his property to Jericho. What's the best method Jericho can use to ensure his interest in the property?

Record the deed in his name.

Which investment cycle is an investor in when there is depreciated basis and tax-deferral through 1031 exchanges?

Reversion

Elizabeth is financing a new home. She submitted her loan application on Monday, August 3. She's set to close on Thursday, September 21. By what date must her lender provide the Closing Disclosure?

September 18

If the Bakers allow their neighbors, the Crandalls, an easement or right of way through their owned field, the Bakers are the _________ tenement in this example.

Servient

When a consumer or another licensee files a complaint against a licensee, to which entity does the commission refer the complaint for an investigation?

The Division of Professional Regulation

Which of the following is the sunshine law based on?

The Freedom of Information Act

The Schmidts just sold their home to Jose and Maria Lopez, who have moved to the state from Mexico while Maria has a visiting professorship at the University of Delaware. The Lopezes intend to keep the property as a second home. What's true about the use of Form 5403, Declaration of Estimated Income Tax, in this situation?

The Schmidts won't have to pay when the form is filed but may still owe capital gains tax on their state income tax return.

If a supervising broker doesn't maintain associated licensees' CE certificates properly, what may happen?

The broker may be fined up to $1,000 per violation

Who's generally responsible for ordering and reviewing a survey of the property?

The buyer

Reuben purchased a property from a seller who gave him a general warranty deed. What's true of Reuben's deed to this property?

The deed provides the greatest protection available from a grantor to a grantee.

For tax years 2018 to 2025, a borrower can write off the interest on a home equity loan only if ______.

The funds are used to buy, build, or improve the home that secures the loan

Delaware buyer Morey agreed to pay for a type of survey called a mortgage survey plan. What will Morey receive from the surveyor?

The property improvements that are present, shown on a plat map, without setting corner markers that would identify the property boundaries

Which of the following is true about air rights?

They allow the owner to use the open space above buildings.

Ida and Barry are buying a home. They'll withdraw money from their traditional IRA to help with the down payment and closing costs. What's NOT true about this withdrawal?

They can exclude the amount of the IRA withdrawal when filing their income taxes.

Your buyer is worried that after she closes on her property, she'll find out someone else has a claim to its ownership. What can reassure her?

Title insurance

Which of the following will be issued only if title is acceptable and an attorney provides a certificate of title opinion?

Title insurance policy

Jennings has received a Closing Disclosure from his lender. What's the purpose of this form?

To detail all costs Jennings will owe at closing

What can be depreciated by an investor?

Tools and equipment

True or False: An implied agreement is not based on any formal agreement, either written or implied, between the principals.

True

You sign a contract to purchase a machine that will allow you to travel back in time and meet Abraham Lincoln. Assuming that time machines don't actually exist (for now), what type of contract is this?

Void

Ken signed a contract to purchase Debra's condo. Ken signed the contract two weeks prior to turning 18, which is the age of majority in his state. Debra found out about his age prior to the closing but honored the contract, and they closed on the condo a month after Ken's birthday. What was the status of the contract when Ken and Debra entered into it?

Voidable

Which of the following is NOT a right of the government to take private property?

Zoning

Devon invested in subdivided land and then sold the lots after making improvements to them. This makes Devon ______.

a developer