Chap3. Hi Licensing Laws

Question 1

Brokers & Property Managers are guided by 3 hawaii laws

Answer 1

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

Question 2

Licensing laws protect the public regarding real estate transactions and

Answer 2

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

Question 3

Real Estate Commission

Answer 3

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

Question 4

Involuntary inactive forced to be inactive

Answer 4

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

Question 5

PRINCIPAL BROKER IS RESPONSIBLE FOR BROKERAGE AND ITS LICENSEES

Answer 5

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.

Question 6

Real estate agent license

Answer 6

18 years
Us citizen or national, or alien authorized
High school diploma
Proof of reputation or competency,honesty, financial integrity, fair dealing , truthfulness

Question 7

Salesperson

Answer 7

1) . 60 hrs of Pre licensing class
2) 70% score on school Pre-licensing score
3) . 70% on state Pre-licensing score

Question 8

Broker

Answer 8

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

Question 9

Recovery fund

Answer 9

Aka fund of last resort

Question 10

Recovery Fund

Answer 10

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

Question 11

Recovery fund process

Answer 11

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

Question 12

If licensee loses suit and the REC has to pay out

Answer 12

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

Question 13

License status

Answer 13

FISA

1) . Active
2) . Inactive
3) . Forfeited
4) . Suspended

Licensing Laws  and Rules Do Not Apply
SRT
5). Surrendered
6). Revoked
7). Terminated

Question 14

Terminating a license is a result of:

Answer 14

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.

Question 15

Brokerage firm has 2 Accounts

Answer 15

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

Question 16

What is commingling

Answer 16

Putting client funds w/ brokers funds ( business account)

Question 17

Exceptions to commingling law

Answer 17

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

Question 18

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?

Answer 18

1) . Office of Consumer Protection (OCP)
2) The Regulated Indusries Complaint Office (RICO)
3) The Professional and Vocational Licensing Division (PVL)

Question 19

OCP DOES WHAT

Answer 19

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

Question 20

RICO what is it

Answer 20

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

Question 21

What is included in the PVL?

Answer 21

REB ( REal Estate Branch) assists the RE Commission (the commission)

Question 22

What is puffery

Answer 22

Exaggeration of property aspects

As long as exaggeration is an opinion and not a false statement— the licensing law is not violated

Question 23

No written law. Common law prevails

Answer 23

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

Question 24

5-5-5-5- Rules foe a RE Licensee Violating Hi Licensing Laws and Rules

Answer 24

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