Chap3. Hi Licensing Laws Flashcards
Brokers & Property Managers are guided by 3 hawaii laws
1) . HRS 467 : state law regarding salespersons and brokers
2) . HRS 436B: covers all pro licenses under DCCA
3) . HAR TITLE 16, Chapter 99, clarifies and implements 467. Aka HAR16-99
Licensing laws protect the public regarding real estate transactions and
1) . Licensing requirements of real estate agents, brokerage firms and real estate school
2) . Acceptable & non-acceptable licensee Conduct towards clients and customers
3) . Responsibilities of the licensee (brokerage firm/ PB/BIC/ broker salesperson & salespersons
4) . Penalties incurred by violating licensing laws
Real Estate Commission
1) . Gov appoints and confirmed by Senate. 9 commissioners
2) . Commissioners must be US citizens w/ 3 yrs hi residency prior to appointment
3) . 4 commissioners licensed real estate brokers w/ 3 yrs in RE business
4) . 3 Commissioners must be licensed real estate (sales persons or brokers)
5) . 2 public members
6) . 4 Commissioners from City and County of Honolulu
7) . 1 Commissioners from. Kauai, maui, Big island
8) . Commissioners serve a 4 year term
9) . Commissioners do not receive compensation
Involuntary inactive forced to be inactive
1) . PB’s or brokerage firm becomes forfeited,inactive, suspended,revoked or terminated
2) . Brokerage firm no longer registered or has no approved place of business
3) . PB is absent for more than 30 days or moves out-of-state and no temporary PB or BIC is appointed
4) . The PB is not longer to act due to prolonged illness or death and a temporary PB has not been designated
5) . A PB or BIC inactivates a licensee’s. License
6) . A licensee fails to comply w/ continuing requirements
PRINCIPAL BROKER IS RESPONSIBLE FOR BROKERAGE AND ITS LICENSEES
Includes
All licensees are current w/ their licenses
All brokerage firm dealings must fo through the PB
Any form of compensation received by a licensee for any real estate transaction must go through and be approved by PB
PB pays the salespersons
A salesperson cannot accept compensation from anyone except the PB or BIC
Except if licensee earned commission from a previous broker and changed companies prior to transaction closing.
Real estate agent license
18 years
Us citizen or national, or alien authorized
High school diploma
Proof of reputation or competency,honesty, financial integrity, fair dealing , truthfulness
Salesperson
1) . 60 hrs of Pre licensing class
2) 70% score on school Pre-licensing score
3) . 70% on state Pre-licensing score
Broker
1) . 80 hrs of brokers Pre licensing class
2) 75% on Pre licensing brokers school exam
3) . 75% on state brokers exam
4) . Certification from an employing brokers that the candidate worked full time as salesperson for 3 of last 5 years
5) . Must have unencumbered hi real estate license or re license or broker license in another state or in a jurisdiction recognized by the Association of RE license law offices
6). Licensee has 2 years from passing school exam to passing all parts of broker license
Recovery fund
Aka fund of last resort
Recovery Fund
Per transaction. No matter how many parties are involved.
Real estate Commission pays. $25,000.00 maximum per transaction
$50,000.00 maximum for liability for licensee
Recovery fund process
1) . Consumer suffers loss doe to licensee wrongdoing
2) . Consumer Sue’s licensee (has 2 years to file)
3) . Consumer must win lawsuit
4) . Consumer receives court judgement (monetary award)
5) . Consumer tries to collect and is unsuccessful
6). Only then, can Court order theREC to pay out of Recovery Fund
If licensee loses suit and the REC has to pay out
The licensee’s license is terminated for at least 5 years
To get reinstated, licensee must repay Recovery Fund, plus interest
Licensee must apply as a RS licensee
Licensee must pay a fee upon receiving initial RS license
If balance of Recover Fund under $350,000.00– then DCCA will charge each licensee
License status
FISA
1) . Active
2) . Inactive
3) . Forfeited
4) . Suspended
Licensing Laws and Rules Do Not Apply SRT 5). Surrendered 6). Revoked 7). Terminated
Terminating a license is a result of:
Monies paid to consumer from recovery fund due to licencee’s wrongful act
Termination is for 5 years and only after licensee has paid back the recovery fund+ interest
The individual licensee forfeits for5 years. Or
A real estate brokerage firm forfeits license for1 year.
Brokerage firm has 2 Accounts
1) . A Business account
2) . A Trust Account or escrow account
Monies received but not earned
Rental deposits or earnest money. Must be deposited by next business day
After receipt
What is commingling
Putting client funds w/ brokers funds ( business account)
Exceptions to commingling law
1) . PB or BIC can hold a check until acceptance of an offer if directed by buyer or offerer if it is In Writing
2) A PB or BIC can hold an uncashed check if directed by seller or offeree
3) . A PB or BIC can use her own funds to maintain a minimum balance to keep account open.
Only PB or BIC can handle trust funds or give WRITTEN PERMISSION to an employee or a licensee to handle DEPOSITING trust funds
HOWVER, only PB or BIC can withdraw monies from a trust fund
For the real estate licensee the DCCA ( Dept. On commerce and consumer affairs is divided into divisions,offices and branches)
Which 3 areas are important to RE licensee?
1) . Office of Consumer Protection (OCP)
2) The Regulated Indusries Complaint Office (RICO)
3) The Professional and Vocational Licensing Division (PVL)
OCP DOES WHAT
Investigates consumer complaints for unfair or deceptive acts or practices
And deceptive advertising
Landlord Tenant Handbook. Disputes handled in small claims court
Decide if law has been broken
RICO what is it
Receives, investigate and PROSECUTES consumer complaints
No statute of Limitations to file a complaint
Does not have criminal jurisdiction
They can only fine, suspend, revoke and terminate a license
What is included in the PVL?
REB ( REal Estate Branch) assists the RE Commission (the commission)
What is puffery
Exaggeration of property aspects
As long as exaggeration is an opinion and not a false statement— the licensing law is not violated
No written law. Common law prevails
The US Ninth CIRCUIT COURT(usncc) has jurisdiction over federal appellate decisions in HI.
Specifically
1) transactional agency.
When a broker brings together a Willing buyer a Willing seller and assists them with the closin details.
No fiduciary relationship between the broker and seller or buyer
2). 1031 Exchange transaction. If a HI resident has relinquished property located in a community property state
5-5-5-5- Rules foe a RE Licensee Violating Hi Licensing Laws and Rules
1) . $5,000.00 maximum fine
2) . 5 year minimum a license must be terminated
3) . 5 years minimum a license is revoked
4) . 5 year minimum if a license is suspended
5). In addition.
If a client or his RE agent
Falsely testifies,
Files a false statement or document,
Forges a document—-
It is a misdemeanor punishable by 1 year max. In jail
