CHAPTER 103

FORMERLY

SENATE BILL NO. 136

AS AMENDED BY SENATE AMENDMENT NOS. 1 AND 2

AN ACT TO AMEND TITLE 24, DELAWARE CODE RELATING TO REAL ESTATE BROKERS, SALESPERSONS AND APPRAISERS

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend subsection (c), § 2903, Title 24, Delaware Code by striking the words "no disciplinary action shall be taken without the affirmative vote of at least 5 members" and substituting the words "no certificate issued under this Chapter shall be suspended or revoked nor any civil penalty imposed without the affirmative vote of at least 5 members " in lieu thereof.

Section 2. Amend subsection (a), § 2912, Title 24, Delaware Code by striking the words "suspend or revoke any certificate issued under the provisions of this chapter or reprimand any licensee" and substituting the words "discipline a certificate-holder in accordance with the provisions of § 2914 of this Title" in lieu thereof.

Section 3. Amend § 2913, Tide 24, Delaware Code by striking the words "suspending or revoking any certificate" in the first paragraph and substituting the words "imposing disciplinary action upon a certificate-holder" in lieu thereof, and further by striking the words "the certificate shall be suspended or revoked" in the last paragraph and substituting the words "such certificate-holder shall be subject to discipline in accordance with the provisions of § 2914 of this Title" in lieu thereof.

Section 4. Amend present § 2914, Title 24, Delaware Code by redesignating it §

2915 and redesignating each succeeding section accordingly.

Section 5. Add a new § 2914, Title 24, Delaware Code designated as "Remedial Actions and Disciplinary Sanctions" which new section shall read as follows:

"(a) The Commission may impose any of the following sanctions, partially, singly or in combination, when it finds that one of the conditions or violations set forth in § 2912 of this Title applies to a certificate-holder regulated under this Chapter:

(1) publicly reprimand;

(2) issue a public letter of reprimand;

(3) place a certificate-holder on probationary status and require the certificate-holder to:

a. report regularly to the Commission upon the matters which are the basis for the probation; and/or

b. limit all practice and professional activities to those areas prescribed by the Commission; and/or

c. continue or renew his/her professional education until the required degree of skill has been attained in those areas which are the basis of the probation. Documentation of this professional education must be submitted to the Commission;

(4) impose a civil penalty;

(5) suspend or revoke any certificate issued under this Chapter

(b) The Commission may withdraw or reduce conditions of probation when it finds that deficiencies requiring such action have been remedied.

(c) Where the Commission has placed a certificate-holder on probationary status under certain restrictions or conditions, and the Commission has determined that such restrictions or conditions are being or have been violated by the certificate-holder, it may, after a hearing on the matter, suspend or revoke the certificate-holder's certificate.

(d) No civil penalty imposed by the Commission may exceed $1,000 for each violation of this Chapter, nor shall the Commission impose a civil penalty on a certificate-holder where the certificate of such certificate-holder has been revoked by the Commission for such violation. The power and authority of the Commission to impose such civil penalties is not to be effected by any other proceeding, civil or criminal, concerning the same violation, nor shall the imposition of such civil penalty preclude the Commission from imposing other sanctions short of revocation. The certificate of any certificate-holder upon whom a civil penalty has been imposed by the Commission may be suspended by order of the Commission until the civil penalty is paid. The Commission may seek judicial enforcement of civil penalty imposed by the Commission.

(e) The Commission may temporarily suspend a certificate-holder's certificate in advance of a final adjudication, or during the appeals process, with 24 hours' written notice to the certificate-holder, but only in cases where there is a clear and immediate danger to the health, safety or welfare of the public if the certificate-holder is allowed to continue to practice. Such suspension may be appealed to the Superior Court.

(f) Where a certificate has been suspended due to the disability of the
certificate-holder, the Commission may reinstate such certificate, if, after a hearing, the Commission is satisfied that the certificate-holder is able to practice with reasonable skill and safety.

(g) As a condition for reinstatement of a suspended certificate, or removal
from probationary status, the Commission may impose such disciplinary or corrective measures as are authorized under this Chapter."

Section 6. Amend present § 2921, Title 24, Delaware Code (to be redesignated §

2922 pursuant to Section 3 of this Bill) by striking said Section in its entirety and substituting the following in lieu thereof:

"§ 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 this section, any person who obtains a final judgment against a real estate broker or salesperson holding a certificate issued under this chapter, for loss or damage sustained 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 salesperson or any employee thereof who does not hold a certificate, may recover, on order of the Commission, compensation in an amount not exceeding in the aggregate the sum of $25,000 in connection with any 1 transaction or claim, regardless of the number of persons aggrieved or parcels of real estate involved in such transaction or claim.

(b) When an aggrieved person commences an action which may result in collection from the Fund, his/her attorney shall notify the Commission in writing within 60 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 such written notification. Upon receiving notice of an action pursuant to this subsection, 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 salesperson holding a certificate issued under this chapter.

(c) If the aggrieved person obtains a final judgment against a real estate broker or salesperson holding a certificate issued under 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 salesperson 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 any amount unpaid upon the judgment, subject to the limitations stated in subsection (a) of this section and this subsection. 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/she is not a spouse of the judgment debtor, or the personal representative of said spouse;

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

(3) that he/she 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/her verified claim; and

(4) that he/she has fully pursued and exhausted all available 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) of this section. The Commission in its discretion may authorize payment of an amount from the Fund less than the claim made pursuant to this subsection.

(d) 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 salesperson holding a certificate issued under this chapter, the certificate of such broker or salesperson may be suspended or revoked by the Commission; and, in the discretion of the Commission, such broker or salesperson shall be ineligible to receive a new certificate until he has repaid in full, plus interest at the legal rate, 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.

(e) 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 (d) of this section, plus accumulated interest at the legal rate.

(f) Any person filing with the Commission any notice, statement or other document required under subsection (b) or (d) of this section, which is false or untrue or contains any material misstatement of fact shall be fined not less than $300 nor more than $3,000.

(g) 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/her 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.

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

(i) The Commission shall at all times after December 31, 1997, maintain the
Fund at a level in excess of $250,000; and to this intent all moneys received pursuant to subsection (h) of this section shall be credited to said Fund and held in a special account other than the General Fund prescribed by § 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; for seminars within the State and for continuing education for licensees within the State; and to reimburse Commissioners, their administrative staff and legal counsel for expenses paid to attend meetings of the National Association of Real Estate License Law Officials.

(j) If the balance of the Fund should fall below the $250,000 level, the
Commission shall, at the next certificate renewal date, assess each real estate broker and real estate salesperson a prorata fee in such amount that the Fund will be returned to the $250,000 level.

(k) 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.

(l) Upon receipt of a written complaint filed against a certificate holder pursuant to this Chapter, the Commission shall inform the complainant(s) that a Real Estate Guaranty Fund is available and of the steps necessary to comply with the provisions of this section to recover compensation from the Fund."

Approved June 30, 1997