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DE Real Estate practice questions

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Question 1Agency Relationships and Contracts

Which fiduciary duty requires a licensee to place the client's interests ahead of the licensee's own interests?

  1. Reasonable care
  2. Accounting
  3. Loyalty Correct answer.
  4. Disclosure

Explanation

Loyalty obligates the agent to act solely for the client's benefit and to avoid undisclosed self-dealing or conflicts of interest. The other fiduciary duties address recordkeeping, information sharing, and competence rather than prioritizing the client's interests.

Question 2Agency Relationships and Contracts

In Delaware, a licensee must deliver the written agency disclosure to a prospective buyer or seller at what point?

  1. Before a brokerage agreement is signed or at first substantive contact Correct answer.
  2. Within ten days after a brokerage agreement has been signed
  3. Only at the closing table, after all inspections and financing are complete
  4. Only after the buyer and seller have signed a purchase agreement

Explanation

Delaware requires the agency disclosure to be given and acknowledged before the consumer commits to a brokerage agreement, or at the first substantive contact if that comes earlier. The purpose is to let consumers know whom the licensee represents before they share confidential information.

Question 3Agency Relationships and Contracts

Under Delaware law, when a brokerage represents both the buyer and the seller in the same transaction, designated agency means that:

  1. The same licensee represents both parties with full advocacy for each
  2. The brokerage withdraws and the parties proceed unrepresented
  3. Different licensees in the brokerage represent each party Correct answer.
  4. The broker becomes a dual agent and may not be paid twice

Explanation

Designated agency allows the broker to assign one affiliated licensee to represent the buyer and a different affiliated licensee to represent the seller. Each party then receives full representation from an individual agent while the broker itself remains neutral.

Question 4Agency Relationships and Contracts

A licensee may act as a dual agent in a Delaware transaction only if:

  1. The broker's manager approves the arrangement in writing
  2. Both parties are represented by the same salesperson
  3. The commission is reduced to a single fee paid by the seller
  4. All parties give written informed consent Correct answer.

Explanation

Dual agency requires the written informed consent of every party to the transaction. Without that consent the licensee may not represent both sides and must limit the relationship.

Question 5Agency Relationships and Contracts

After an agency relationship ends, the licensee's duty of confidentiality in Delaware generally:

  1. Continues for a period of time set by statute Correct answer.
  2. Ends immediately when the listing expires
  3. Transfers to the broker who takes the next listing
  4. Applies only if the client requests it in writing

Explanation

Confidentiality survives termination of the agency relationship for the period established by Delaware law. Ending the listing does not free the licensee to reveal the former client's confidences.

Question 6Agency Relationships and Contracts

A broker claims a commission even though another licensee wrote the offer. The claim is strongest when the broker can show he was the:

  1. Broker named in the MLS entry
  2. Licensee who attended the closing
  3. Agent who prepared the listing paperwork
  4. Procuring cause of the sale Correct answer.

Explanation

The broker who is the procuring cause, meaning whose efforts set in motion an unbroken chain of events leading to the sale, is the one entitled to the commission. Being named in the MLS or attending settlement does not establish that causal link.

Question 7Agency Relationships and Contracts

A Delaware real estate salesperson may receive compensation for brokerage services from:

  1. The client directly, if the broker agrees verbally
  2. Any cooperating broker involved in the transaction
  3. Only the salesperson's employing broker Correct answer.
  4. The title company at settlement

Explanation

A salesperson is licensed under a broker and may be paid for brokerage services only by that employing broker. Any fee paid by a client or cooperating broker flows to the brokerage and is then divided by the broker.

Question 8Agency Relationships and Contracts

Under an exclusive right-to-sell listing, the seller owes the broker a commission:

  1. Only if the seller refuses to sell to a ready buyer
  2. Only when a cooperating broker brings the buyer
  3. Only when the broker is the procuring cause
  4. Even if the seller personally finds the buyer Correct answer.

Explanation

An exclusive right to sell entitles the broker to a fee no matter who produces the buyer, including the seller. The seller gives up the right to sell the property during the listing term without paying the broker.

Question 9Agency Relationships and Contracts

In an open listing, the seller:

  1. Owes a commission to every broker who shows the property to a buyer
  2. Must withdraw the listing from the MLS before the seller may sell
  3. May employ several brokers and pay only the one who brings the buyer Correct answer.
  4. Must pay a full commission even if the seller personally finds the buyer directly

Explanation

An open listing is non-exclusive: the seller may give it to multiple brokers and owes a commission only to the broker who produces a ready, willing, and able buyer. If the seller finds the buyer, no commission is owed.

Question 10Agency Relationships and Contracts

Which event ends an agency relationship by operation of law?

  1. The client dies Correct answer.
  2. The broker completes the sale and is paid
  3. The client revokes the agency agreement
  4. The broker and client agree to cancel the listing

Explanation

Death of the client terminates the agency automatically, without action by either party, which is what makes it termination by operation of law. Revocation, mutual cancellation, and completion of the purpose are all brought about by the parties.

Question 11Agency Relationships and Contracts

An agency relationship that the principal cannot revoke because the agent has been given an interest in the property itself is called:

  1. A gratuitous agency that carries no compensation
  2. An implied agency created by the conduct of the parties
  3. A general power of attorney granted to the broker
  4. An agency coupled with an interest Correct answer.

Explanation

When the agent holds an interest in the property that is the subject of the agency, the agency is coupled with an interest and cannot be unilaterally revoked. This protects the agent's stake in the property.

Question 12Agency Relationships and Contracts

Under Delaware's statute of frauds, a contract for the sale of real property must be:

  1. Recorded in the county where the property sits
  2. In writing and signed by the party to be charged Correct answer.
  3. Approved by the Real Estate Commission
  4. Witnessed by two disinterested parties

Explanation

Contracts for the sale of an interest in land must be in writing and signed by the party against whom enforcement is sought. The writing must identify the parties, the property, and the essential terms.

Question 13Agency Relationships and Contracts

Which set of elements is required to form a valid real estate contract?

  1. Offer, earnest money, inspection, and mortgage financing
  2. Offer, counteroffer, deposit, and a completed title search
  3. Offer, acceptance, consideration, capacity, and legality Correct answer.
  4. A listing agreement, a disclosure, and a settlement statement

Explanation

A valid contract requires mutual assent through offer and acceptance, consideration, competent parties, and a lawful purpose. Financing, inspections, and deposits are common contract terms but are not formation requirements.

Question 14Agency Relationships and Contracts

When a buyer submits an offer and the seller responds with a change in the purchase price, the seller's response is:

  1. An option contract that the buyer must accept in writing
  2. A counteroffer that rejects the original offer Correct answer.
  3. A unilateral mistake that voids the buyer's offer
  4. A binding acceptance that immediately binds both parties

Explanation

A response that changes the terms of an offer is a counteroffer, which operates as a rejection of the original offer and creates a new offer for the other party to accept or reject. An acceptance must mirror the offer exactly.

Question 15Agency Relationships and Contracts

Earnest money deposited by a buyer is typically held:

  1. In a trust or escrow account by the broker Correct answer.
  2. By the Delaware Real Estate Commission
  3. By the seller in a personal checking account
  4. By the buyer's mortgage lender until the settlement date

Explanation

Earnest money is held in a trust or escrow account maintained by the broker or another designated escrow holder until closing or until the contract directs its release. Trust fund rules prohibit commingling these funds.

Question 16Agency Relationships and Contracts

A financing contingency in a purchase agreement protects the buyer by:

  1. Letting the buyer cancel and recover the deposit if the loan is denied Correct answer.
  2. Guaranteeing the buyer a mortgage loan at the interest rate stated in the offer
  3. Giving the buyer's lender the right to approve or reject the sale price
  4. Requiring the seller to pay all of the buyer's loan and closing costs

Explanation

A financing contingency allows the buyer to terminate the contract and recover the earnest money if the buyer cannot obtain the specified loan. It protects the buyer from being forced to close without funding.

Question 17Agency Relationships and Contracts

A seller breaches a purchase agreement by refusing to convey. The buyer's remedy of specific performance means the court will:

  1. Award the buyer the amount of the earnest money deposit
  2. Cancel the contract and return both parties to their prior positions
  3. Order the seller to convey the property Correct answer.
  4. Require the buyer to buy a comparable property in the same area

Explanation

Specific performance is an equitable remedy that compels the breaching seller to convey the property as agreed, because land is treated as unique. The buyer must be ready, willing, and able to perform.

Question 18Agency Relationships and Contracts

A purchase agreement states that if the buyer defaults, the seller may retain the earnest money as agreed damages. This provision is best described as:

  1. A liquidated damages clause Correct answer.
  2. A due-on-sale clause
  3. An acceleration clause
  4. A penalty clause that courts will not enforce

Explanation

A liquidated damages clause sets an agreed sum in advance as compensation for a default, and earnest money is commonly used for this purpose. Courts enforce such clauses unless the amount is grossly disproportionate to the anticipated harm.

Question 19Agency Relationships and Contracts

When a buyer transfers all rights and obligations under a purchase agreement to a third party and the seller agrees to release the original buyer, the correct term is:

  1. Subordination
  2. Ratification
  3. Assignment
  4. Novation Correct answer.

Explanation

Novation substitutes a new party for the original one with the consent of all parties, releasing the original obligor. A mere assignment transfers rights but typically leaves the original party liable.

Question 20Agency Relationships and Contracts

Which statement about the term of a Delaware brokerage agreement is correct?

  1. It renews automatically unless either party objects
  2. It must be at least 90 days long
  3. It must state a definite termination date Correct answer.
  4. It may run indefinitely until the property sells

Explanation

A Delaware brokerage agreement must contain a definite termination date so the client knows when the representation ends. Open-ended agreements are not permitted.

Question 21Agency Relationships and Contracts

A licensee who only performs ministerial acts for a buyer, such as handing out a brochure at an open house, has:

  1. Become the buyer's designated agent by operation of law
  2. Created no agency relationship with the buyer Correct answer.
  3. Created an implied agency relationship with the buyer
  4. Become a dual agent for both sides of the deal

Explanation

Ministerial acts such as distributing printed information or answering routine questions do not by themselves create an agency relationship. Agency arises from an express agreement or from conduct showing consent to represent.

Question 22Agency Relationships and Contracts

A licensee working with a buyer as a customer, not a client, owes the buyer:

  1. The same duties of loyalty that are owed to a client
  2. Full fiduciary duties, including loyalty, advocacy, and confidentiality
  3. No duties of any kind, because no agency exists
  4. Honest dealing and disclosure of known material defects Correct answer.

Explanation

A customer is entitled to honesty and fair dealing and to disclosure of known material defects, but not to the fiduciary duties owed to a client. The distinction matters because the customer has no representation or advocacy.

Question 23Agency Relationships and Contracts

A licensee wants to buy a property that her own brokerage has listed. She must:

  1. Resign from the brokerage before she submits any offer
  2. Disclose her license status and agency role in writing Correct answer.
  3. Have another licensee in the office write the offer
  4. Wait until the listing expires before making an offer

Explanation

A licensee who acts as a principal in a transaction must disclose her licensed status and any agency relationship in writing so the other party can make an informed decision. Disclosure, not resignation, addresses the conflict of interest.

Question 24Agency Relationships and Contracts

A licensee representing a seller learns that the basement floods after heavy rain. The licensee must:

  1. Wait for the buyer's home inspector to discover it
  2. Tell only buyers who ask directly about water problems
  3. Keep the information confidential because it belongs to the seller
  4. Disclose the defect to prospective buyers Correct answer.

Explanation

A seller's agent must disclose known material defects to prospective buyers; confidentiality never authorizes concealing a condition that the law requires to be revealed. Waiting for an inspector risks misrepresentation.

Question 25Agency Relationships and Contracts

A licensee tells a buyer that a property has "the best view in the county." This statement is best characterized as:

  1. Negligent misrepresentation by the licensee
  2. Puffing, which is generally not actionable Correct answer.
  3. A material latent defect that must be disclosed
  4. Fraudulent misrepresentation of a material fact

Explanation

A statement of opinion or sales talk, commonly called puffing, is generally not actionable. Only misstatements of material fact can support a claim for fraud or misrepresentation.

Question 26Real Property Ownership, Interests, and Land Use

Which estate in land is of unlimited duration, freely inheritable, and subject to no conditions or limitations?

  1. Life estate
  2. Fee simple determinable
  3. Estate for years
  4. Fee simple absolute Correct answer.

Explanation

The fee simple absolute is the largest estate recognized by law: it lasts indefinitely, descends to heirs, and carries no conditions that could cut it short. A fee simple determinable, by contrast, ends automatically on the happening of a stated event.

Question 27Real Property Ownership, Interests, and Land Use

A person owns an interest in land that will last only as long as that person is alive. That interest is:

  1. An easement by necessity
  2. A life estate Correct answer.
  3. A fee simple subject to a condition subsequent
  4. A remainder interest

Explanation

A life estate is a freehold estate measured by a human life; when the measuring life ends, the estate ends and possession passes to the holder of the future interest. The holder of the life estate is called the life tenant and may use the property but may not commit waste.

Question 28Real Property Ownership, Interests, and Land Use

Which form of concurrent ownership gives each owner an undivided share of the property with no right of survivorship?

  1. A life estate
  2. A tenancy by the entirety
  3. A joint tenancy
  4. A tenancy in common Correct answer.

Explanation

Tenants in common each hold a separate, undivided interest that passes by will or intestacy rather than to the other owners. The distinguishing feature of joint tenancy and tenancy by the entirety is the right of survivorship.

Question 29Real Property Ownership, Interests, and Land Use

An easement that benefits the parcel of land to which it is attached and passes automatically with that parcel when it is transferred is:

  1. A license
  2. An easement in gross
  3. A prescriptive easement
  4. An easement appurtenant Correct answer.

Explanation

An easement appurtenant benefits a dominant parcel and burdens a servient parcel, and it runs with the land, so it transfers automatically with the dominant estate. An easement in gross benefits a person or entity rather than a parcel.

Question 30Real Property Ownership, Interests, and Land Use

A tenant whose lease has expired but who remains in possession without the landlord's consent holds:

  1. A tenancy at will
  2. A periodic tenancy
  3. A tenancy at sufferance Correct answer.
  4. A tenancy for a term of years

Explanation

A tenancy at sufferance arises when a tenant who lawfully took possession stays after the lease ends without the landlord's agreement. The landlord may treat the occupant as a trespasser or as a holdover tenant and demand rent.

Question 31Real Property Ownership, Interests, and Land Use

An owner's lot is unusually shaped and cannot satisfy the required side-yard setbacks, which would cause hardship if strictly enforced. The owner should apply for:

  1. A nonconforming use designation
  2. A variance Correct answer.
  3. A rezoning of the parcel
  4. A special exception

Explanation

A variance is administrative relief from a zoning requirement granted when strict enforcement would cause hardship arising from the property itself. A special exception, by contrast, permits a use the ordinance already lists as permissible in the district.

Question 32Real Property Ownership, Interests, and Land Use

The constitutional power that allows government to take private property for a public purpose upon payment of just compensation is:

  1. Police power
  2. Eminent domain Correct answer.
  3. The taxing power
  4. The power of escheat

Explanation

Eminent domain is the power of condemnation, and the constitutional limit on it is that the taking be for a public purpose with just compensation paid. Police power regulates the use of property without compensation and is a distinct power.

Question 33Real Property Ownership, Interests, and Land Use

Which item is generally treated as a fixture when real property is sold?

  1. A freestanding bookcase
  2. A potted plant
  3. A built-in bookcase Correct answer.
  4. A throw rug

Explanation

A fixture is personal property that has been permanently attached to or integrated into the realty, so it transfers with the land. A bookcase built into the wall is attached and intended as part of the structure, unlike movable furnishings.

Question 34Real Property Ownership, Interests, and Land Use

A grantor conveys land "to the City, so long as the parcel is used as a public park." The City holds:

  1. A fee simple determinable Correct answer.
  2. A fee simple subject to a condition subsequent
  3. A life estate
  4. A fee simple absolute

Explanation

Words such as "so long as" and "while" create a fee simple determinable, which ends automatically when the stated use stops, leaving the grantor a possibility of reverter. No action or re-entry by the grantor is required for the estate to terminate.

Question 35Real Property Ownership, Interests, and Land Use

A grantor conveys Blackacre "to Ann for life, then to Beth." Beth holds:

  1. An executory interest
  2. A remainder Correct answer.
  3. A reversion
  4. A right of entry

Explanation

Because Beth's interest is created in the same conveyance and will become possessory when Ann's life estate ends, Beth holds a remainder. A reversion would arise only if the grantor had kept the future interest.

Question 36Real Property Ownership, Interests, and Land Use

A seller conveys an interior parcel that has no access to any public road, and the deed grants no easement. The buyer most likely acquires:

  1. An easement by necessity Correct answer.
  2. An easement in gross
  3. A license coupled with an interest
  4. A prescriptive easement

Explanation

When a conveyance leaves a parcel landlocked, the law implies an easement by necessity over the grantor's remaining land so the parcel can be reached. The necessity must exist at the time of severance and the right ends when the need ends.

Question 37Real Property Ownership, Interests, and Land Use

For several years a neighbor openly drives across another owner's land to reach the road, without permission and without excluding the owner from the land. This use most likely establishes:

  1. Title by adverse possession
  2. An easement by estoppel
  3. A prescriptive easement Correct answer.
  4. A license

Explanation

Open, adverse, continuous, and notorious use of another's land for the statutory period creates a prescriptive easement, a right of use rather than ownership. Adverse possession requires possession that is exclusive, which a shared roadway use generally is not.

Question 38Real Property Ownership, Interests, and Land Use

Several liens encumber the same property. Which lien generally has priority regardless of the order in which the liens were recorded?

  1. A mechanic's lien for work performed last week
  2. A recorded second mortgage
  3. A property tax lien Correct answer.
  4. An earlier-recorded judgment lien

Explanation

Real property tax liens are typically given first priority by statute because they secure revenue essential to government, and they survive foreclosure of junior liens. Recording order governs most other competing liens but generally does not displace the tax lien.

Question 39Real Property Ownership, Interests, and Land Use

In most states, a mechanic's lien relates back to which date for purposes of priority?

  1. The start of the work Correct answer.
  2. The date of the owner's deed
  3. The date of recording
  4. The date payment is due

Explanation

The relation-back doctrine gives a mechanic's lien priority as of the commencement of the work or the making of the contract, so later-recorded liens cannot leap ahead of it. The lien must still be perfected by recording within the statutory period, but its priority dates to the earlier event.

Question 40Real Property Ownership, Interests, and Land Use

Deed restrictions in a residential subdivision are most commonly enforced through:

  1. The county recorder
  2. The local zoning board of adjustment
  3. The state building code office
  4. Private enforcement by owners Correct answer.

Explanation

Restrictive covenants are private contractual limitations on land use, enforced by injunctive relief or damages at the suit of benefited owners or a homeowners association. Zoning is public regulation and is enforced by the municipality instead.

Question 41Real Property Ownership, Interests, and Land Use

A use that lawfully existed before the zoning ordinance was adopted but does not comply with the new rules is:

  1. A spot zone
  2. A variance
  3. A special exception
  4. A legal nonconforming use Correct answer.

Explanation

Because the use predates the ordinance, it is protected as a legal nonconforming use and may continue, although it usually cannot be expanded or resumed after abandonment. A variance is granted after the ordinance exists for hardship arising from the property.

Question 42Real Property Ownership, Interests, and Land Use

Soil that builds up gradually along the shore of a river or lake through natural deposit belongs to:

  1. The public by dedication
  2. The adjacent upland owner Correct answer.
  3. The state
  4. The federal government

Explanation

Accretion is the gradual and imperceptible addition of land by natural causes, and the upland owner gains title to the addition without compensation. Sudden shifts, such as avulsion during a flood, leave the original boundary undisturbed.

Question 43Real Property Ownership, Interests, and Land Use

A tenant farmer whose lease expires before the crops are ready to harvest may usually re-enter to harvest them under the doctrine of:

  1. Partition
  2. Emblements Correct answer.
  3. Waste
  4. Estovers

Explanation

Emblements give a tenant the right to harvest annual crops planted during the tenancy when the lease ends through no fault of the tenant. The right applies to cultivated crops such as grain and vegetables, not to trees or perennial plants.

Question 44Real Property Ownership, Interests, and Land Use

Two people hold title as joint tenants. One of them conveys her interest to a third party. As a result:

  1. The property becomes a tenancy by the entirety
  2. The conveyance is void unless the other joint tenant consents
  3. The joint tenancy is severed Correct answer.
  4. The joint tenancy continues with the new owner as a joint tenant

Explanation

Joint tenancy depends on the unity of time, title, interest, and possession, so a conveyance by one joint tenant destroys that unity. The parties then hold as tenants in common, and the original owner's former joint tenant keeps a half interest free of survivorship.

Question 45Real Property Ownership, Interests, and Land Use

A landowner grants a neighbor an easement appurtenant for a driveway across the landowner's parcel. The neighbor later purchases the landowner's parcel. The easement:

  1. Must be re-recorded within one year
  2. Becomes an easement in gross
  3. Is extinguished by merger Correct answer.
  4. Continues in force because it is appurtenant

Explanation

When one person acquires ownership of both the dominant and servient parcels, the easement is extinguished by merger because an owner cannot hold an easement over her own land. If the parcels are later separated again, the easement does not automatically revive.

Question 46Real Property Ownership, Interests, and Land Use

A homeowner has enjoyed unobstructed sunlight across a neighbor's land for many years but has no written agreement. Under the usual rule, the homeowner cannot claim an easement for light and air because:

  1. It requires an express grant Correct answer.
  2. Prescriptive rights in light and air vest after fifty years
  3. Light and air cannot be the subject of an easement
  4. The state owns all sunlight crossing another's land

Explanation

Easements for light, air, and solar access are recognized, but courts generally hold that they cannot be acquired by prescription; they must be created by express grant or written agreement. This protects owners from losing development rights simply because a neighbor enjoyed unobstructed light for a period of time.

Question 47Real Property Ownership, Interests, and Land Use

A purchaser of a cooperative apartment unit typically receives:

  1. A life estate measured by the corporation's charter
  2. Shares of stock and a proprietary lease Correct answer.
  3. Fee title to a unit plus an undivided interest in the common elements
  4. A tenancy in common interest in the entire building

Explanation

In a cooperative, a corporation owns the building and the resident buys shares of stock and receives a proprietary lease to a unit. In a condominium the buyer instead receives a deed to the unit together with an undivided interest in the common elements.

Question 48Real Property Ownership, Interests, and Land Use

A grantor conveys land "to Alan for life, then to Alan's heirs." Alan's heirs hold:

  1. A vested remainder
  2. A reversion
  3. A contingent remainder Correct answer.
  4. An executory interest

Explanation

No living person has heirs, since heirs are determined only at death, so the persons who will take cannot be identified yet. A remainder in unascertainable persons is contingent, and it becomes possessory only when Alan dies.

Question 49Real Property Ownership, Interests, and Land Use

A neighbor fences and farms a strip of another owner's land for the statutory period, honestly believing the strip is her own. Under the majority rule, her claim to title by adverse possession:

  1. It succeeds, because hostility means lack of permission Correct answer.
  2. It succeeds only if she also pays the property taxes for the statutory period
  3. It fails, because mistaken possession can never ripen into title
  4. It fails, because a good-faith mistake defeats the hostility element

Explanation

Under the majority objective test, hostility means possession without the owner's permission, so a claimant's mistaken belief that she owns the land does not defeat the claim. A minority of states requires good faith or payment of taxes, but that is not the general rule.

Question 50Real Property Ownership, Interests, and Land Use

A zoning amendment reclassifies one small parcel for a use inconsistent with the surrounding neighborhood and benefiting mainly its owner. The amendment is most likely vulnerable to challenge as:

  1. A nonconforming use
  2. A use variance
  3. A special exception
  4. Spot zoning Correct answer.

Explanation

Spot zoning is the singling out of a small parcel for treatment inconsistent with the comprehensive plan and surrounding uses, and courts may invalidate it as arbitrary. A valid amendment must be consistent with the comprehensive plan and serve the general welfare rather than one owner.