Richards Layton & Finger
 

Delaware Real Estate Law Update: Substantive Changes to Real Estate Broker Licensing Law

November 21, 2011

On August 3, 2011, Governor Jack Markell signed into law Senate Bill 154, as amended, which completely rewrites the section of the Delaware Code addressing the licensing of real estate brokers and salespersons. Although much of the legislation purports to be an effort to provide new language and terms that reflect current real estate practices and to make the legislation easier to read by practitioners and the public, in some instances the legislation can be read as substantively changing the law governing individuals who provide real estate services.

For example, the new legislation makes clear that a person providing property management services involving physical maintenance or administrative and financial matters is not subject to the requirement for licensing of real estate brokers and salespersons. While expressly excepting these activities from licensing requirements, the legislation also makes clear that the practice of leasing activities, which may be customarily performed by some property management companies, is regulated by the statute and requires appropriate licensing. The new legislation also makes clear that, once the applicable regulations have been adopted, marketing and advertising property for sale or lease is likely to be within the scope of regulated real estate services requiring appropriate licensing.

Other changes to current law are found throughout the statute and may affect individuals involved in real estate activities in Delaware, such as the establishment by the legislation of a new concept of imputed statutory agency for transactions involving the sale of one-to-four-family residential properties. Although the process of providing new regulations under the new legislation has commenced, it is not clear yet when revised regulations will be issued. The new legislation will be effective six months after it was signed by the governor.
 

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