CHAPTER 259

FORMERLY

HOUSE BILL NO. 454

AN ACT TO AMEND CHAPTER 29 OF TITLE 24 OF THE DELAWARE CODE BY REPEALING THE LAW RELATING TO BONDING OF REAL ESTATE BROKERS AND PROVIDING INSTEAD FOR THE ESTABLISHMENT AND MAINTENANCE OF A REAL ESTATE GUARANTY FUND.

Be it enacted by the General Assembly of the State of Dela ware:

Section 1. Amend Section 2921 of Title 24 of the Delaware Code by striking said section in its entirety and inserting in lieu thereof the following:

"§2921. Real Estate Guaranty Fund.

(a) The Commission shall establish and maintain a Real Estate Guaranty Fund (hereinafter referred to as the 'Fund') from which, subject to the provisions of this section, any person aggrieved by any action of a real estate broker or real estate salesman holding a certificate issued under the provisions of this chapter, by reason of theft or forgery (as defined in Title 11) or by reason of any fraud, misrepresentation or deceit by or on the part of any such real estate broker or real estate salesman or any employee thereof who does not hold a certificate, may recover, on order of the Commission with right of appeal to the Superior Court, compensation in an amount not exceeding in the aggregate the sum of ten thousand dollars ($10,000) in connection with any one transaction or claim, regardless of the number of persons aggrieved or parcels of real estate involved in such transaction or claim.

(b) Each real estate broker and real estate salesman entitled to renew his certificate on or after July 1, 1975, shall, when so renewing his certificate on or after July 1, 1975, pay in addition to the appropriate renewal fee a further fee of twenty-five dollars ($25) which shall be credited to the Fund, and any person who receives a real estate broker's or real estate salesman's certificate for the first time after July 1, 1975, shall pay said additional fee of twenty-five dollars ($25) in addition to all other fees payable, provided that in no case shall any real estate broker or salesman be required to pay said fee of twenty- five dollars ($25) more than once, unless assessed as provided in subsection (d).

(c) The Commission shall at all times after July 1, 1975, maintain the Fund at a level in excess of fifty thousand dollars ($50,000); and to this intent all moneys received pursuant to subsection (b) shall be credited to said Fund and held in a special account other than the General Fund prescribed by Section 6102(a) of Title 29. Said account shall be an interest-bearing account and the interest accruing from the funds on deposit in the account shall be credited to the Commission to defray the costs of administering the Fund.

(d) If the balance of the Fund should fall below the fifty thousand dollar ($50,000) level, the Commission shall, at the next certificate renewal date, assess each real estate broker and real estate salesman a prorata fee in such amount that the Fund will• be returned to the fifty thousand dollar ($50,000) level.

() No aggrieved person shall be entitled to recover compensation from the Fund unless his action against the real estate broker or real estate salesman is commenced within one (1) year from the accrual of the cause of action.

(1) When an aggrieved person commences an action which may result in collection from the Fund, he or • his attorney shall notify the Commission in writing within five (5) days of the commencement of the action. The written notification shall identify the parties to the action, the court in which the action is brought and the date the action was commenced, and shall state the relief sought in the action and shall state that the action may result in a claim against the Fund. A copy of the complaint, counterclaim or cross-claim, if any, setting forth the allegations of the action, shall be enclosed with written notification.

Upon receiving notice of an action pursuant to subsection (f), the Commission shall have the right to enter an appearance, intervene in or defend the action and may appeal from any judgment entered against a real estate broker or real estate salesman holding a certificate issued under the provisions of this chapter.

(g) If the aggrieved person obtains a final judgment against a real estate broker or real estate salesman holding a certificate issued under the provisions of this chapter for loss or damage sustained by reason of theft or forgery (as defined in Title 11) or by reason of fraud, misrepresentation or deceit by or on the part of such real estate broker or real estate salesman or employee thereof who does not hold a certificate, such aggrieved person may file a verified claim with the Commission seeking an order directing payment from the Fund of the amount unpaid upon the judgment, subject to the limitations stated in subsection (a) and this subsection (g). The commission shall proceed upon such claim in a summary manner, and upon the hearing thereof the aggrieved person shall be required to show:

(1) that he is not a spouse of the judgment debtor, or the personal representative of said spouse;

(2) that he has complied with all the requirements of this section;

(3) that he has obtained a final judgment as set out in this subsection, stating the amount thereof and the amount owing thereon at the date of the filing of his verified claim; and able remedies and taken all reasonable steps to collect the amount of the judgment, stating the total amount collected.

If the Commission is satisfied that the aggrieved person has satisfied all the requirements of this section and is entitled to recover compensation from the Fund, it shall enter an order requiring payment from the Fund of whatever sum it shall find to be payable upon the claim, subject to the limitations of subsection (a).

The Commission in its discretion may authorize payment of an amount from the fund less than the claim made pursuant to this subsection (g).

(h) If the Commission pays from the Fund any amount in settlement of a claim or toward satisfaction of a judgment against a real estate broker or real estate salesman holding a certificate issued under the provisions of this chapter, the certificate of such broker or salesman shall be automatically revoked; and, in the discretion of the Commission, such broker or salesman shall be ineligible to receive a new certificate until he has repaid in full, plus interest at the rate of five per cent (5%) per annum, the amount paid from the Fund on his account. A discharge in bankruptcy shall not relieve a person from the penalties and disabilities provided in this subsection.

() If at any time the money on deposit in the Fund is insufficient to satisfy any duly authorized claim or portion thereof, the Commission shall, when sufficient money has been deposited in the Fund, satisfy such unpaid claims or portions thereof in the order that such claims or portions thereof were originally filed pursuant to subsection (g), plus accumulated interest at the rate of five per cent (5%) per annum.

(a) Any person filing with the Commission any notice, statement or other document required under the provisions of subsections (f) or (g), which is false or untrue or contains any material misstatement of fact shall be fined not less than three hundred dollars ($300) nor more than three thousand ($3,000)

(k) When, upon the order of the Commission or pursuant to a compromise, the Commission has caused to be paid from the Fund any sum to a judgment creditor, the Commission shall be subrogated to all of the rights of the judgment creditor up to the amount paid; and the judgment creditor shall assign all of his right, title and interest in the judgment up to such amount paid to the Commission, and any sums recovered by the Commission on the judgment shall be deposited to the Fund.

(1) Any person aggrieved by any action, decision, order or regulation of the Commission may appeal to the Superior Court in the manner prescribed by this chapter."

Section 2. If any clause, sentence, paragraph or part of this Act or the application thereof to any person or circumstances, shall, for any reason, be adjudged by a court of competent jurisdiction, to be invalid, such judgment shall not affect, impair or invalidate the remainder of this Act.

Approved July 11, 1975