§16-99-2 Definitions

§16-99-3 Conduct

§16-99-3.1 Disclosure of agency

§16-99-4 Client's account; trust funds; properties other than funds

§16-99-5 Notification and filing of names, addresses, and changes

§19-99-5.1 Involuntary inactive license status

§16-99-6 Display of license

§16-99-7 Renewal of license

§16-99-8 Restoration of forfeited license

§16-99-9 Reinstatement of suspended license

§16-99-10 Revoked license

§16-99-10.5 Other requested material

§16-99-10.6 Surrender of real estate license

§16-99-11 Advertisement

§16-99-12 Exam site solicitation

 §16-99-17 Forms and instructions

§16-99-18 Examination application

§16-99-19 Licenses application

§16-99-20 Repealed

§16-99-21 Denial

§16-99-22 Demand for a hearing

§16-99-23 Proceedings upon demand for hearing

§16-99-24 Certification of experience

§16-99-25 Falsification of application

§16-99-29 Examination for broker and salesperson license

§16-99-30 Examination subject matter

 §16-99-36 Education requirement

§16-99-37 Education waiver

§16-99-38 Experience requirement

§16-99-39 Equivalent experience

§16-99-40 Repealed

§16-99-41 Repealed

§16-99-42 Repealed

§16-99-43 Repealed

§16-99-44 Repealed

§16-99-45 Repealed

§16-99-46 Real estate education fund

 [For full text refer to Hawaii Administrative Rules, Chapter 99]

 §16-99-75 Administrative practice and procedure

 §16-99-79 Recovery fund settlement procedures

§16-99-83 Oral testimony

[For full text refer to Hawaii Administrative Rules, Chapter 99]

§16-99-147 Registration

§16-99-148 Fidelity bond

§16-99-149 Client's trust funds, accounting, and records

§16-99-150 Conduct

  §16-99-1 Objective. This chapter, adopted by the real estate commission, hereafter referred to as "commission," is intended to clarify and implement chapter 467, Hawaii Revised Statutes, as amended, to the end that the provisions thereunder, for the protection of the general public in its real estate transactions, may be best effectuated and the public interest most effectively served. [Eff 12/26/74; am and ren §16-99-1, 4/27/81; am and comp 6/28/82; comp 3/3/84; comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §467-4)

§16-99-2 Definitions. As used in this chapter:

"Approved curriculum" means the curriculum or courses approved by the commission as satisfying the education requirements established for real estate broker and salesperson license examination applicants.

"Branch office" means any place of business other than the principal place of business or site office, from which real estate business is conducted. Each branch office shall be licensed by the real estate commission and conform with the permitted use under the zoning code of the county in which the branch office is situated.

"Broker-in-charge" means the broker licensee designated by the principal broker as the person directly in charge of and responsible to the principal broker for the real estate operations conducted at a branch office. The principal broker may designate a broker licensee as the broker in charge for the real estate operation conducted at the principal place of business.

"Broker-salesperson" means a broker licensee who places that person's own license under another broker as an employee or independent contractor.

"Commingling" means to mingle or mix, such as a deposit of client's funds in the broker's personal account.

"Franchise" means a contract or agreement, either expressed or implied, whether oral or written, between two or more persons by which:

"Franchise fee" means any charge or fee that a franchisee or sub-franchisor is required to pay or agrees to pay for the right to enter into and operate a business under a franchise agreement.

"Franchisee" means the person to whom a franchise is granted.

"Franchisor" means the person who grants a franchise.

"Inactive" means that a licensee holds a current license which is not forfeited, suspended, revoked, or terminated and cannot transact any real estate business until the license is reinstated to active status. When a licensee is placed on an "inactive status" the licensee shall surrender to the commission the certificate of license together with the licensee's last active license identification card.

"Involuntary inactive" means the commission has placed the licensee in an inactive status because the licensee's employing or associating broker, principal broker, broker-in-charge, or branch office license has been forfeited, suspended, revoked, terminated, or placed inactive pursuant to section 16-99-5.1.

"Licensee" includes corporations, copartnerships, or persons licensed as a real estate broker or real estate salesperson under chapter 467, HRS.

"Place of business" means the physical place where business is conducted other than a post office box, telephone, telephone answering service, letter or mail drop service, or motor vehicle within the State. The place of business shall conform with the permitted use under the zoning code of the county in which the place of business is situated. The commission may use as guidelines but is not limited to the following factors in finding that a broker is maintaining a place of business: physical presence of the broker during reasonable scheduled office hours; on-site maintenance of confidential client's file which are immediately accessible to the real estate commission upon request; the broker's prominent display of the firm name which is registered with the real estate commission and the listing of the firm name where permissible in the building directory; the broker's operation of a place of business directly accessible to the public; the broker's keeping of personnel and compensation records of all real estate salespersons employed or associated with a broker. Client files as used in this definition includes but is not limited to: real estate contracts, escrow records, trust account records, and confidential client data. "Place of business" does not include the operation of a place of business designed to evade the requirements of the definition as set forth in this paragraph.

"Principal broker" means the person directly in charge of and responsible for all of the real estate operations of the licensed firm. An independent broker is considered a firm.

"Site office" means a temporary place of business approved by the commission for a period of six months, subject to extension by the commission for good cause, upon a request made prior to the expiration of the six months, being other than the principal place of business or branch office from which real estate sales transactions are engaged in relative to a new real estate condominium project, real estate subdivision, or time share project. The office shall be situated on or adjacent to the specific property, condominium project, subdivision, or time share project to be considered a site office, and the broker shall present evidence that the site office conforms with the respective county or city and county requirements pertaining to temporary land use. The provisions of section 16-99-5(f) shall apply to site offices.

"Supervision" means the act of directing, inspecting, and reviewing.

"Trust properties" includes funds in the form of cash or checks and personal property, other than cash or checks, received by the licensee to be held in trust for the benefit of the depositor of the property and or for the benefit of third persons.

"Wall certificate" means a certificate of license issued by the real estate commission to a qualified individual either as a salesperson or broker. [Eff 12/26/74; am and ren §16-99-2, 4/27/81; am and comp 6/28/82; am and comp 3/3/84; am 9/29/86; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §§467-4, 467-4(2), 467-25.5)(Imp: HRS §§467-1.5, 467-7, 467-8, 467-11, 467-12, 467-14, 467-25.5)

§16-99-3 Conduct. (a) To fully protect the general public in its real estate transactions, every licensee shall conduct business, including the licensee's own personal real estate transactions, in accordance with this section.

(b) The licensee shall protect the public against fraud, misrepresentation, or unethical practices in the real estate field. The licensee shall endeavor to eliminate any practices in the community which could be damaging to the public or to the dignity and integrity of the real estate profession. The licensee shall assist the commission in its efforts to regulate the practices of brokers and salesperson in this State.

(c) The licensee shall not be a party to the naming of a false consideration in any document, unless it be the naming of an obviously nominal consideration.

(d) The licensee shall recommend that title be examined, survey be conducted, or legal counsel be obtained when the interest of either party requires it.

(e) The broker shall keep in special bank accounts, separated from the broker's own funds, moneys coming into the broker's possession in trust for other persons, such as escrow funds, trust funds, client's moneys, rental deposits, rental receipts, and other like items.

(f) The licensee, for the protection of all parties with whom the licensee deals, shall see the financial obligations and commitments regarding real estate transactions, including real estate property rental management agreements, are in writing, reviewed by the principal broker or broker-in-charge of the licensee, expressing the exact agreements of the parties, and set forth essential terms and conditions, and that copies of those agreements, at the time they are executed, are placed in the hands of all parties involved.

When working with a seller in a "For Sale By Owner" or a "Courtesy to Broker" situation, the licensee shall disclose who, if anyone, the licensee represents and who will pay a commission, if any.

(g) The licensee shall not acquire, rent, lease, or exchange an interest in or buy, rent, lease, or exchange for one's self, any member of the licensee's immediate family or firm, or any entity in which the licensee has any ownership interest, property listed with the licensee, licensee's firm, or listed with any other firm or licensee without making the true position known in writing to the listing owner or property owner. When offering for sale, lease, exchange, or rental, property which the licensee owns or has an interest in, the licensee shall fully inform the principal broker of the licensee's intention to sell, lease, exchange, or rent, and of the licensee's interest in the property. The licensee shall reveal the interest to the purchaser, lessee, or tenant in writing prior to accepting any offer.

(h) When acting as agent in the management of property, the licensee shall not accept any commission, rebate, or profit on expenditures for or from an owner, without the owner's and principal broker's knowledge and consent.

(i) The broker shall not submit or advertise property without written authorization, or franchise, and in any offering the price quoted shall not be other than that agreed upon with the owner as the offering price.

(j) A licensee shall transmit immediately all written offers in any real estate transaction as defined in section 16-99-3.1 to the listing broker who has a written unexpired exclusive listing contract covering the property. Each written offer, upon receipt by the listing broker, shall be transmitted to the seller immediately. In the event that more than one formal written offer on a specific property is made before the owner has accepted an offer, any other formal written offer presented to the broker, whether by a prospective purchaser or another broker, shall be immediately transmitted to the owner for decision. If any offer or counter offer is rejected, the rejection shall be noted on the offer or counter offer, or in the event of seller's or buyer's neglect or refusal to do so, the broker for the rejecting party shall note the rejection on the offer or counter offer and a copy returned immediately to the originator of the offer or counter offer.

(k) The broker shall not compensate a licensee of another broker in connection with a real estate transaction without paying, directly or causing the payment to be made directly to the other broker. This requirement shall not apply in cases where the licensee is receiving compensation from a former broker for commission earned while affiliated with that former broker.

(l) A licensee shall not place any sign or advertisement indicating a property is for sale, rent, lease, or exchange, without the written authorization of the owner or seller and approval of the principal broker or broker-in-charge.

(m) There shall be a principal broker or a broker-in-charge at the principal place of business and a broker-in-charge at a branch office who shall be immediately responsible for the real estate operations conducted at that place of business.

(n) A broker shall maintain a place of business located in this State at a business address registered with the commission from which the broker does, in fact, conduct business and where the broker's books and records are maintained.

(o) Prior to the time the principal broker or the broker-in-charge is absent from a place of business or branch office for more than fourteen calendar days, the principal broker shall advise the commission in writing about the absence. During those periods of absence another broker shall be designated, in writing, as the temporary principal broker or temporary broker-in-charge. In case of prolonged illness or death where the principal broker or broker-in-charge is unable to act, another broker shall be designated as the temporary principal broker or broker-in-charge within thirty days of the illness or death. A temporary principal broker or broker-in-charge arrangement shall not exceed a period of six months, with the right to extend prior to expiration for another six months for good cause and with the approval of the commission.

(p) No licensee shall act as a broker, broker-salesperson, or salesperson for more than one firm or office except that this subsection shall not apply to those situations as described in subsection (o).

(q) Within ten days of receiving a written request, it shall be the responsibility of the principal broker or the firm to provide broker applicants formerly or presently employed or associated with them with an accurate experience certification statement in the form provided by the commission and an affidavit and documentary evidence of the required real estate transactions. Falsification of information contained in the certification form shall be cause for revocation or suspension of the broker's or firm's license and of the salesperson's license if that person is a party to the falsification.

(r) A broker licensee shall not sit for any Hawaii real estate broker or salesperson examination during the period the licensee has a real estate broker license unless specifically permitted by the commission.

(s) A salesperson licensee shall not sit for any Hawaii real estate salesperson examination during the period the licensee has a real estate salesperson license unless specifically permitted by the commission.

(t) An exclusive listing shall state a definite termination date.

(u) The licensee shall not add to or modify the terms of an instrument previously signed or initiated by a party to a transaction without written consent of all the parties.

(v) The licensee shall not convert other people's moneys to the licensee's own use.

(w) Violation of any part of this chapter may be cause for revocation or suspension of license. [Eff 12/26/74; am and ren §16-99-3, 4/27/81; am and comp 6/28/82; am and comp 3/3/84; am 9/29/86; am 7/11/87; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §467-14)

§16-99-3.1 Disclosure of agency. (a) As used in this section:

"Buyer" includes a vendee, lessee, party to an exchange, or grantee of an option.

"Buyer's agent" means a real estate broker who acts as the agent of the buyer.

"Contract between the buyer and seller" includes a "deposit, receipt, offer and acceptance," an option, an offer to purchase, a sales contract, an offer to lease, or a lease.

"Listing broker" means the real estate broker who obtains a listing of real estate for sale, lease, exchange (residential, timeshare, industrial, or commercial) or for an interest in a residential cooperative housing corporation.

"Seller" includes a vendor, lessor, party to an exchange, or grantor of an option.

"Selling broker" means a real estate broker who acts in cooperation with a listing broker and who finds and obtains a buyer in a transaction.

"Subagent" means a real estate broker or salesperson to whom an agent delegates agency powers.

"Transaction" means any sale, lease, rent, or exchange of real estate (residential, timeshare, industrial, or commercial) transaction or a sale or exchange of, or option involving, an interest in a residential cooperative housing corporation, but excluding leases for one year or less.

(b) At the time a listing broker obtains a listing, the listing broker shall disclose the following:

The disclosure shall be in writing, dated, and signed by the seller and the listing broker.

(c) Prior to preparing any contract between the buyer and the seller, the following disclosure shall be made at least once to the buyer, in writing or orally:

(d) Prior to presenting a contract between the buyer and the seller to the seller, the following disclosure shall be made at least once to the seller, in writing or orally:

(e) Any disclosure required by subsections (c) and (d) shall be confirmed in writing in a separate paragraph titled "AGENCY DISCLOSURE" in the contract between the buyer and the seller. The title shall be in no less than ten-point bold print. No particular disclosure language is required. To assist licensees, the commission approves the following language:

_____________________________, and all licensees

(Print name of Selling Broker,)

(or Listing Broker is acting alone)

(Buyer or Seller)

____________________ ____________________

Buyer's initials Seller's initials"

(f) Unless specifically restricted by the real estate broker in writing, any real estate salesperson, employed by or associated with a real estate broker, shall be authorized to make the required disclosures on behalf of the real estate broker. Failure to make the disclosure required by subsections (b), (c), and (d) or to obtain the written confirmation thereof shall subject the real estate broker and the real estate salesperson to disciplinary action by the commission.

(g) A licensee may not be the agent for both the buyer and the seller without obtaining the written consent of both the buyer and the seller. The written consent shall state that the licensee made a full disclosure of the type of representation the licensee will provide and shall briefly describe the type of representation the licensee will provide to the buyer and to the seller. A general statement in the consent signed by the buyer and seller that the licensee represents both buyer and the seller is not sufficient.

(h) A licensee representing a buyer shall disclose such agency to the seller, or the listing broker if there is a listing broker, orally or in writing, before negotiations are initiated. The licensee shall disclose to the seller, or the listing broker if there is a listing broker, whether the licensee is, or intends to be, the buyer, orally or in writing, before negotiations are initiated.

(i) If any change occurs in a transaction which makes a prior written or oral disclosure required by this section incomplete, misleading, or inaccurate, the licensee shall promptly make a revised written disclosure if the prior disclosure was in writing, or a revised oral disclosure, if the prior disclosure was made orally, to the buyer or seller, or both, as the case may be. Any revised written disclosure shall include the date of the revised disclosure and be acknowledged separately by the signature of the buyer or seller, or both, as the case may be.

(j) The obligation of either the seller or buyer to pay compensation to a broker is not determinative of the agency relationship.

(k) Nothing in this chapter shall affect the validity of title to real property transferred, based solely on the reason that any licensee failed to conform to the provisions of this chapter. [Eff 7/11/87; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §467-14(12))

§16-99-4 Client's account; trust funds; properties other than funds. (a) Every broker who does not immediately place all funds entrusted to the broker in a neutral escrow depository, shall maintain a trust fund account in this State with some bank or recognized depository, which is federally insured, and place all entrusted funds therein. The trust fund account shall designate the broker as trustee and all trust fund accounts, including interest bearing accounts, shall provide for payment from the funds upon demand.

(b) Every broker shall retain for at least three years records of all trust funds which the broker has received. All records and funds shall be subject to inspection by the commission or its representative. The three-year requirement shall be for real estate license law purposes only. The broker may be required to keep records for a longer period of time for other purposes. The records shall be kept in Hawaii in accordance with standard accounting principles and shall clearly indicate the following:

(c) Trust fund accounts shall be either interest bearing or non-interest bearing, as agreed to in writing between the owner of funds and the principal broker or broker-in-charge receiving the funds and all other individuals that are parties to the real estate agreement. For interest bearing accounts, these same parties to the real estate agreement shall also agree to in writing as to who shall pay for any early withdrawal penalty. The principal broker or broker-in-charge shall keep any interest belonging to others in the trust fund account and shall not commingle the accrued interest with the principal broker's or broker-in-charge's general operating account or with the principal broker's or broker-in-charge's own funds. All agreements relating to disbursements of the accrued interest from the client trust account shall be in writing, signed by the owner of the trust fund, the principal broker, or broker-in-charge receiving the funds and all other individuals that are parties to the real estate agreement. The interest accrued on any trust account deposit shall be disbursed in strict compliance with the written disbursement agreement. In the absence of a written agreement, any interest accrued shall be paid to the owner of the funds.

(d) Every broker shall deposit or place trust funds received into a neutral escrow depository or in a trust fund account with some bank or recognized depository, which is federally insured, by the next business day following their receipts.

(e) Every principal broker or broker-in-charge who receives personal property, other than funds, in trust for other people, by the next business day shall safeguard the property by placing the property in a secure place located in the State of Hawaii.

(f) The principal broker or broker-in-charge shall retain for at least three years records of all personal property other than trust funds coming into the possession of the principal broker or broker-in-charge as trustee. All records of the personal property held in trust shall be subject to inspection by the commission or its representative and kept in the State of Hawaii at the place of business. The records shall clearly indicate the following:

(g) Property of others coming initially into the possession, custody, control of a salesperson or broker salesperson, to be held in trust for the benefit of the depositor, and or the benefit of third persons, shall be received on behalf of the salesperson's or broker salesperson's principal broker or broker-in-charge, and shall be delivered immediately by the next business day after receipt to the salesperson's or broker salesperson's principal broker or broker-in-charge, unless the salesperson or broker salesperson is instructed as to another time in writing by the depositor. The received property shall include but not be limited to: cash or checks as down payments, earnest money deposits, security deposits, rental income; other checks payable to third persons or trust accounts; and personal property other than cash or checks.

(h) Principal brokers shall not commingle client's funds with other moneys; provided, however, it shall not constitute commingling to:

The fact that a check is being held in an uncashed form in paragraph (2) shall be specifically disclosed in writing to the seller or offeree before acceptance of the offer. Commingling of the client's funds with other moneys shall include, but not be limited to, keeping undisputed commissions, management fees, and other fees in the broker's client trust account beyond a reasonable time after those commissions, management fees, and other fees have been earned.

(i) A salesperson or employee shall not handle trust properties in any way without the express written authorization of the person's principal broker or broker-in-charge. A principal broker may authorize a salesperson or employee, in writing, to place trust properties on behalf of the broker anywhere the principal broker could place them, but shall not authorize any other disposition. A principal broker shall be held responsible for any trust properties the broker authorizes a salesperson or employee to handle.

(j) A principal broker shall not allow any person to have custody or control of trust properties held by the principal broker except as provided in chapter 467, HRS, and this chapter.

(k) A principal broker may allow a broker-in-charge of a branch office to have custody and control of trust properties on behalf of the principal broker on transactions transpiring at that branch office. The principal broker and broker-in-charge shall be jointly responsible for any trust properties the principal broker authorizes the broker-in-charge to handle.

(l) Information about escrow accounts and records for real estate transactions under the real estate broker shall be retained for at least three years, subject to inspection by the commission or its representative at the place of business. [Eff 12/26/74; am and ren §16-99-4, 4/27/81; am and comp 6/28/82; am and comp 3/3/84; am 9/29/86; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §467-14)

§16-99-5 Notification and filing of names, addresses, and changes. (a) Each licensee shall file the licensee's residence and mailing address with the commission and shall notify the commission of any change in writing, within ten days of the change, on a form provided by the commission.

(b) Each broker shall file with the commission:

(c) Upon closing the principal place of business or a branch office, the broker shall immediately notify the affected employees or associates, and within ten days of the date of closing shall provide the commission in writing on a form provided by the commission, the names of the affected employees or associates.

(d) A principal broker or broker-in-charge shall release a licensee from employment or association within ten days upon written request. Any person licensed by the commission who changes employing or associating broker shall notify the commission in writing, on a form provided by the commission, within ten days of the change, or immediately place the person's license on inactive status together with return of the person's wall certificate and identification card to the commission.

(e) Any licensee whose license has been forfeited, suspended, revoked, or terminated shall immediately cease such employment and shall return the licensee's wall certificate and identification card to the commission.

(f) No licensee shall be employed or associated with a real estate broker whose place of business is so far distant from the salesperson's residence that reasonable supervision cannot be maintained by the broker; e.g., a broker situated on Oahu shall not employ or associate with a licensee residing on another island, unless, the broker establishes a branch office on the island where the licensee resides and the licensee is employed or associated at that branch office. This subsection does not prohibit a licensee from being temporarily assigned to the site office situated on another island.

(g) A licensee who changes residence to another state or country shall place the licensee's license on inactive status.

(h) All changes submitted to the commission pursuant to this section shall be effective when the changes, made on a form provided by the commission, are approved by the commission. [Eff 12/26/74; am and ren §16-99-5, 4/27/81; am and comp 6/28/82; am and comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §§467-1.5, 467-8, 467-11, 467-12)

§16-99-5.1 Involuntary inactive license status. (a) A broker and salesperson license shall be placed on an involuntary inactive status upon the occurrence of one or more of the following:

(b) A branch office license shall be placed on an involuntary inactive status upon the occurrence of one or more of the following:

(c) A principal broker may place an associating or employing salesperson in inactive status after written notification to the affected salesperson. [Eff and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §§467-7, 467-11, 467-12)

§16-99-6 Display of license. The certificate of license shall be conspicuously displayed within the premises of the place of business or branch office where the licensee is engaged, and the licensee shall have in possession at all times, a current license identification card. [Eff 12/26/74; am and ren §16-99-6, 4/27/81; am and comp 6/28/82; comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-14)(Imp: HRS §§467-8, 467-12)

§16-99-7 Renewal of license. For an even-numbered year when December 31 falls on a non-working day, renewal fees paid by mail shall be considered as paid when due if the envelope bears a postmark of the first working day of the year. Failure to submit a completed renewal application and failure to pay the renewal fee when due or if check is not honored by the bank for whatever reason shall constitute automatic forfeiture of license. The principal broker shall see to it that all licensees are currently licensed at all times during employment or association. [Eff 12/26/74; am and ren §16-99-7, 4/27/81; am and comp 6/28/82; comp 3/3/84; am 9/29/86; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: §§467-11, 467-14)

§166-99-8 Restoration of forfeited license. (a) A license which has been forfeited for failure to submit a completed renewal application and failure to pay the biennial renewal fee as required may be restored by the commission:

(b) The restoration procedures as specified in subsection (a) apply to a forfeited license for failure to submit a completed renewal application or failure to pay the required biennial renewal fee or fees and does not apply to the reinstatement of a forfeited license which has been forfeited for failure to apply for reinstatement of a license at the end of license suspension, pursuant to section 92-17(c)(3), HRS.

(c) The following factors may be used in imposing a community service condition to restoring a license:

The commission shall specify the hours and scope of the community service in a letter to the accepting community service agency. The licensee shall execute a notarized statement that the community service rendered is accurate and reliable and that the licensee shall indemnify the State and the accepting community service agency from any and all harm, injury, or damages resulting from such service. The accepting agency shall issue, upon the licensee's completion of the community service condition, a letter informing the commission that the licensee has completed the community service condition and whether the agency accepts or rejects any or all of the recommendations or findings of the licensee produced as part of the community service work, and for what reasons. The letter shall be issued when the licensee submits a time sheet indicating that the licensee has completed the community service hours and the date and nature of the service rendered. [Eff 12/26/74; am and ren §16-99-8, 4/27/81; am and comp 6/28/82; comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §§467-11, 92-17(c)(3) and (d))

§16-99-9 Reinstatement of suspended license. A person whose license has been suspended may apply for reinstatement of license, provided, that the commission may require one or a combination of the following: successful completion of real estate course or courses approved by commission; application for and a passing score on the written examination prescribed by the commission; an oral examination of the applicant. Application for reinstatement shall be accompanied by the reinstatement fee, and other applicable fees, such as renewal fees and recovery fund assessments. [Eff 12/26/74; am and ren §16-99-9, 4/27/81; am and comp 6/28/82; comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §§467-8, 467-9, 467-14)

§16-99-10 Revoked license. A person whose license has been revoked shall apply for a new real estate salesperson license by filing an application and complying with all requirements for new applicants. The commission may waive the applicable education or experience requirements, of section 467-9.5 pursuant to sections 16-99-37 and 16-99-39. [Eff 12/26/74; am and ren §16-99-10, 4/27/81; am and comp 6/28/82; comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: §467-4)(Imp: HRS §§467-8, 467-9, 467-14)

§16-99-10.5 Other requested material. The commission may require the person requesting reinstatement of a suspended license or applying for a new license following license revocation to submit other information and documents that may be helpful to the commission in evaluating the person's request. [Eff and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §§467-9, 92-17(c)(3))

§16-99-10.6 Surrender of real estate license. (a) A licensee who has no pending complaints, investigations, disciplinary petitions filed against the licensee or disciplinary hearings before the real estate commission may surrender the person's real estate license, and shall:

(b) Should the person desire to engage in any real estate activities, the person shall obtain a new license as a new applicant for a salesperson license. [Eff and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §§467-7, 467-10)

§16-99-11 Advertisement. (a) No real property shall be advertised except in the full name of the broker as licensed by the commission, including a trade name previously registered by the broker with the business registration division and with the commission.

(b) Reference to the name of the salespersons, as licensed by the commission, may be made in advertisements if the advertisement identifies them as salespersons and also names the broker and identifies the broker as such. The preceding also applies to real property owned by the licensee.

(c) No licensee shall be allowed to advertise "For Sale By Owner," "For Rent By Owner," "For Lease By Owner," "For Exchange By Owner."

(d) Disclosure of the individual's status as a real estate licensee whether active or inactive is required in all advertising and promotional material.

(e) A leasehold or fee simple property advertised for sale in the newspaper medium, promotional matter or otherwise, shall be properly identified as such. The designation (L) to identify a leasehold and (FS) to identify a fee simply property may be used.

(f) All advertising materials, including but not limited to business cards, shall identify the licensee with the licensee's brokerage firm or employing broker, and specify whether the licensee is a broker (B), or salesperson (S), or if a current member of the Hawaii Association of Realtors, Realtor (R) or Realtor-Associate (RA).

(g) Any broker who operates under a franchise shall:

(h) For purposes of this section, the term "broker's name" is that name which previously appeared on the real estate broker's license granted by the commission prior to the inclusion of the franchise name and logotype.

(i) Any advertising materials containing any address or telephone number other than the street address or telephone number of the place of business shall be respectively identified as such and also contain the street address or telephone number of the place of business identified and designated as such. [Eff 12/26/74; am and ren §16-99-11, 4/27/81; am and comp 6/28/82; am and comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §465-4)(Imp: HRS §467-7)

§16-99-12 Exam site solicitation. On the day of a real estate licensing examination, a licensee shall not at the exam site or at any place on the property where the exam site is located, directly or indirectly, recruit, solicit, offer to employ, discuss employment with, or distribute literature promoting the licensee to any person who sits for that examination. [Eff and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §467-25)

SUBCHAPTER 2

APPLICATIONS

§16-99-17 Forms and instructions. An application filed with the commission shall be prepared in accordance with and contain the information called for in the application form provided by the commission, or any instructions which may be required by the commission with respect to filing. All applications shall be accompanied with a non-refundable fee as provided in rules adopted by the director of commerce and consumer affairs pursuant to chapter 91, HRS. [Eff 12/26/74; am and ren §16-99-17, 4/27/81; am and comp 6/28/82; comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §§467-9, 467-9.6, 467-11, 467-14, 26-9(k))

§16-99-18 Examination application. (a) Applications for examination together with the required non-refundable fee shall be filed with the testing agency contracted by the commission to administer the examination by the first working day of the month of the examination.

(b) Applicants for the broker and salesperson examination shall satisfy the applicable education and experience requirements by the date of examination. In the event the applicant has not satisfied the requirements, the examination score shall be declared void.

(c) Applicants for the broker and salesperson examination shall not be required to submit documentation showing completion of the prerequisite education requirement or an education waiver at the time of filing of the application for examination with the testing agency. The documentation shall be submitted at the time of application for license under section 16-99-19(a)(3), except where documents are required to be submitted in accordance with sections 16-99-37 and 16-99-29(g), for an education waiver.

(d) Applicants for the broker examination shall submit certification of experience under section 16-99-24, together with the application for examination. In the event the certification of experience is not submitted with the application, the testing agency shall reject the application.

(e) Examination fees shall be determined by contract between the commission and the testing agency. [Eff 12/26/74; am and ren §16-99-18,4/27/81; am and comp 6/28/82; am and comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §§467-9.5, 467-9.6)

§16-99-19 Licenses application. (a) All applications for a real estate salesperson or broker license shall:

(b) An application for a branch office license shall be submitted at least fifteen days before the next commission meeting and shall be accompanied by the required branch office license fee. [Eff 12/26/74; am and ren §16-99-19, 4/27/81; am and comp 6/28/82; am and comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §467-9)

§16-99-20 Repealed. [R 3/3/84]

§16-99-21 Denial. In the event an application for admission to the examination, for issuance, reinstatement, or restoration of a license is denied, the commission shall notify the applicant by letter of the commission's action which shall include a concise statement of the reasons therefor and if the applicant is entitled to a hearing, a statement informing the applicant of the right to a hearing if the applicant so desires. [Eff 12/26/74; am and ren §16-99-21, 4/27/81; am and comp 6/28/82; am and comp 3/3/84; comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §467-15)

§16-99-22 Demand for a hearing. Any person whose application for admission to the examination, for the issuance, reinstatement, or restoration of a license has been denied by the commission, shall be entitled to a hearing; provided that a demand for a hearing is filed with the commission within sixty days of the date of the letter informing the applicant of the denial of application; and provided further that this section shall not apply to a denial based on the failure to file an application within the period provided by this chapter. [Eff 12/26/74; am and ren §16-99-22, 4/27/81; am and comp 6/28/82; am and comp 3/3/84; comp 11/3/90; comp 2/25/91] (Auth: HRS §46704)(Imp: HRS §467-15)

§16-99-23 Proceedings upon demand for hearing. If a demand for a hearing is filed within the time prescribed, the commission shall order a hearing pursuant to chapters 91 and 92, HRS, and chapter 16-201, Administrative Practice and Procedure. [Eff 12/26/74; am and ren §16-99-23, 4/27/81; am and comp 6/28/82; and am and comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §46704)(Imp: HRS §467-15)

§16-99-24 Certificate of experience. (a) Applicants for the broker examination shall submit to the commission a completed application for certification of experience together with: a non-refundable fee as prescribed by the director of the department of commerce and consumer affairs, experience certification statements signed and notarized by the principal broker or broker-in-charge and documentary evidence of ten real estate transactions in which the applicant participated within the last four years immediately preceding the application showing the applicant has satisfied the experience requirement under section 16-99-38 or documentary evidence of an official nature to prove they have equivalent experience under section 16-99-39.

(b) The commission shall verify the applicant's dates of association and release of the experience certification statements with the records of the commission.

(c) An applicant shall not receive credit for any portion of experience or transaction:

(d) If the applicant has satisfied the experience requirement, the commission shall issue to the applicant a certification of experience which the applicant shall submit with the application for the broker examination. The certificate of experience shall be valid for one year from the date of issuance.

(e) The commission shall reject an application for certification of experience if the application is incomplete; or if the applicant's real estate salesperson license is in forfeited, suspended, revoked, or terminated status unless otherwise approved by the commission.

(f) The principal broker or broker-in-charge shall certify the applicant's experience including applicant's participation in the real estate transactions submitted. [Eff and comp 6/28/82; am and comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §§467-9.5, 26-9(k))

§16-99-25 Falsification of application. The commission may deny an applicant admission to the examination, or issuance of license, void applicant's examination score, or revoke a license on the ground of falsification of any information supplied in the application for examination, request for certification of experience, application for license, or supporting documents. [Eff and comp 6/28/82; comp 3/3/84; comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §467-14)

SUBCHAPTER 3

EXAMINATION

§16-99-29 Examination for broker and salesperson license. (a) No license shall be issued to any person unless the person takes and passes a written examination as prescribed by the commission for the license applied for. The minimum passing score for the uniform and the State portions of the examination shall be seventy for salesperson applicants and seventy-five for broker applicants. Failure to obtain a passing score in any part thereof shall result in failure of the examination as a whole and the entire examination shall be repeated by the candidate.

(b) Any eligible person shall forfeit the examination fee if the person does not sit for the examination.

(c) Unsuccessful candidates, rejected applicants, and persons granted withdrawal who wish to sit for subsequent examinations shall file a new application and comply with all requirements each time.

(d) The examinations shall be given only on established dates and at designated locations in the State. Exceptions to established dates shall be made for the benefit of candidates who for religious reasons may not sit on scheduled examination dates. Conditions and procedures for admittance to this special date shall be determined by the commission and testing agency.

(e) Examinations shall be conducted in accordance with procedures formulated by the testing agency authorized by the commission to administer examinations. Failure to follow such procedures shall result in immediate disqualification from the examination and may bar candidates from being examined in any future examinations.

(f) Any applicant who passes the salesperson or broker examination shall be required to apply for the person's active or inactive license within ninety calendar days after the date of the examination; otherwise, the person shall be deemed an unsuccessful applicant and shall be subject to examination again.

(g) At the location for examination, all candidates for salesperson or broker examination shall present a current real estate school completion certificate or current education waiver certificate. Candidates for broker examination shall submit experience certificate with the examination registration. [Eff 12/26/74; am and ren §16-99-29, 4/27/81; am and comp 6/28/82; am and comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §§467-4, 467-9) (Imp: HRS §§467-8, 467-9, 467-9.5)

§16-99-30 Examination subject matter. Applicants shall demonstrate, by passing with a grade satisfactory to the commission, a written examination given by it and appropriate to the license sought, that they have a reasonable knowledge of general principles and practices of real estate transactions and the law and rules pertaining to or relating to real estate, and such other subjects and matters which the commission or its designated examining agency determines to be essential to the protection of the general public in its real estate transactions. [Eff 12/26/74; am and ren §16-99-30, 4/27/81; am and comp 6/28/82; am and comp 3/3/84; comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §467-8)

SUBCHAPTER 4

EDUCATION AND EXPERIENCE

§16-99-36 Education requirement. The education requirement for the salesperson license examination shall be satisfied by successful completion of a curriculum in real estate at an accredited institution, consisting of a minimum of forty class hours and conforming to the approved curriculum for salesperson adopted by the commission or such equivalent education or experience as shall be determined by the commission. The education requirement for the broker license examination shall be satisfied by successful completion of a curriculum in real estate at an accredited institution, consisting of a minimum of forty-six class hours and conforming to the approved curriculum for brokers adopted by the commission or equivalent education or experience as shall be determined by the commission. A "class hour" as used in this section means sixty minutes of classroom instruction. [Eff 12/26/74; am and ren §16-99-36, 4/27/81; am and comp 6/28/82; am and comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §§467-8, 467-9.5)

§16-99-37 Education waiver. (a) The commission may waive the respective education requirements for applicants for the salesperson and broker license examinations for those who hold:

(b) All requests for waiver of the education requirements shall be submitted in writing, together with all supporting documents of an official nature to the commission for its review, prior to filling the application for examination. An applicant shall use, only once, any of the enumerated basis, as set forth in subsection (a) of this section for which an education waiver is granted, in qualifying to take the salesperson or broker licensing exam but not for both.

(c) An approved education waiver shall be valid for one year from the date of issuance. [Eff 12/26/74; am and ren §16-99-37, 4/27/81; am and comp 6/28/82; am and comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §467-9.5)

§16-99-38 Experience requirement. The applicant for the broker license shall:

The principal broker or broker-in-charge shall submit an affidavit and documentation in support of the transactions.

(b) "Full-time occupation as a real estate salesperson" means at least forty hours a week are regularly devoted to real estate. Forty hours a week shall be the maximum number of hours a candidate may be credited toward the experience requirement for full-time experience. A pro rata credit shall be given to part-time activity as a real estate salesperson. For example, if a person worked twenty hours a week, it will take the person four years to fulfill the experience requirement. [Eff 12/26/74; am and ren §16-99-38, 4/27/81; am and comp 6/28/82; comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §467-9.5)

§16-99-39 Equivalent experience. (a) The commission may waive part of the two-year, full-time experience requirement for the broker license where the commission is persuaded that the applicant is otherwise and similarly qualified by reason of practical experience in a business allied with or related to real estate. The following guidelines shall be used to determine whether the experience requirement has been satisfied:

A maximum allowable waiver of one and one-half years may be granted for combinations of paragraphs (1) to (10).

(b) All requests for equivalency to the experience requirement shall be submitted in writing together with all supporting documents of an official nature with the request for certification of experience. [Eff 12/26/74; am and ren §16-99-39, 4/27/81; am and comp 6/28/92; am and comp 3/3/84; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §467-9.5)

§16-99-40 Repealed. [R 3/3/84]

§16-99-41 Repealed. [R 3/3/84]

§16-99-42 Repealed. [R 3/3/84]

§16-99-43 Repealed. [R 3/3/84]

§16-99-44 Repealed. [R 3/3/84]

§16-99-45 Repealed. [R 3/3/84]

§16-99-46 Real estate education fund. The commission may authorize the use of funds deposited in the real estate education fund for the benefit of and improvement of services to the consuming public, licensees, commissioners, and staff. The education fund may be used for classes, media exposure, participation in national associations, publications, research, seminars, studies, and any other educational purpose as the commission may determine. [Eff and comp 6/28/82; am and comp 3/3/84; comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §467-19)

SUBCHAPTER 5

REGISTERED REAL ESTATE SCHOOLS

[For full text refer to Hawaii Administrative Rules, Chapter 99]

SUBCHAPTER 6

PRACTICE AND PROCEDURE

§16-99-75 Administrative practice and procedure. The rules of practice and procedure for real estate shall be as provided in chapter 16-201, the rules of practice and procedure for the department of commerce and consumer affairs, which are incorporated by reference and made a part of this chapter. [Eff 9/29/86; am and comp 11/3/90; comp 2/25/91] (Auth: HRS §91-2, 442-5)(Imp: HRS §91-2, 442-5)

SUBCHAPTER 7

RECOVERY FUND

§16-99-79 Recovery fund settlement procedures. Upon the occurrence of all of the following, the commission may settle any subsequent claim against the real estate recovery fund involving a licensee that was previously named in an order and on whose behalf the commission had been required to make payments out from the recovery fund:

SUBCHAPTER 8

ORAL TESTIMONY

§16-99-83 Oral testimony. (a) The commission shall accept oral testimony on any item which is on the commission's agenda, provided that the testimony shall be subject to the following conditions:

(b) Nothing in this chapter shall require the commission to hear or receive any oral or documentary evidence from a person on any matter which is the subject of another pending proceeding subject to the hearing relief, declaratory relief, or rule relief provisions of chapter 16-201.

(c) Nothing in this chapter shall prevent the commission from soliciting oral remarks from persons present at the meeting or from inviting persons to make presentations to the commission on any particular matter on the commission's agenda. [Eff and comp 11/3/90; comp 2/25/91] (Auth: HRS §467-4)(Imp: HRS §03-3)

SUBCHAPTER 9

CONTINUING EDUCATION

[For full text refer to Hawaii Administrative Rules, Chapter 99]

SUBCHAPTER 10

CONDOMINIUM HOTEL OPERATORS

§16-99-147 Registration. (a) Registrations made pursuant to section 467-30, HRS, shall expire on December 31 of each year.

(b) All business entities registered pursuant to section 467-30(b) with the exception of sole proprietors, shall be currently registered, duly authorized, and in good standing with the business registration division.

(c) Trade names used by condominium hotel operators shall be currently registered with the commission and also currently registered, authorized by, and in good standing with the business registration division.

(d) On or before December 31 of each year, condominium hotel operators shall submit a complete reregistration application form, pay appropriate fees, submit evidence of a fidelity bond policy, and submit any other additional information substantiating compliance with the registration requirements of section 467-30, HRS, or be deemed by the commission as unregistered and subject to new registration application requirements.

(e) Within ten days of any changes, the condominium hotel operator shall notify the commission, in writing, of any changes in the information contained on the registration or reregistration application, exemption or exclusion forms.

(f) When making application for an exemption or exclusion from the provisions of section 467-30(b)(1), HRS, the application shall be made on a form provided by the commission. The applicant shall submit for each condominium project, unless otherwise approved by the commission, zoning information, verified by a county official that the condominium hotel is in a hotel or transient lodging zone; together with true copies of the condominium project declaration and bylaws certified by the bureau of conveyances or land court specifically permitting a condominium hotel. [Eff and comp 2/25/91] (Auth: HRS §§467-4, 467-30)(Imp: HRS §467-30)

§16-99-148 Fidelity bond. (a) The fidelity bond shall be issued by a company currently authorized by the insurance commissioner of Hawaii to issue insurance in this State.

(b) Unless otherwise approved by the commission, the fidelity bond shall:

(c) The amount of the deductible shall not exceed the greater of $2,000 or five percent of the face amount of the fidelity bond. In no case shall the amount of the deductible exceed the maximum deductible amount of $5,000.

(d) When the fidelity bond is a name schedule bond, the condominium hotel operator shall:

(e) Unless otherwise approved by the commission, the fidelity bond shall not contain a criminal conviction endorsement or rider which provides as a condition precedent to recovery on the bond, the prosecution or conviction of the employee.

(f) The commission shall terminate the registration of a condominium hotel operator for failure to maintain a fidelity bond in compliance with section 467-30, HRS, and this chapter. [Eff and comp 2/25/91] (Auth: HRS §§467-4, 467-30)(Imp: HRS §467-30)

§16-99-149 Client's trust funds, accounting, and records. (a) Condominium hotel operators, including condominium hotel operators who are excluded or exempt from obtaining a real estate broker's license pursuant to section 467-30(F), HRS, shall comply with section 16-99-4. For purposes of compliance, when the condominium hotel operator is not a real estate broker, references to broker or principal broker in section 16-99-4 shall also mean "condominium hotel operator."

(b) The condominium hotel operator shall not commingle the client's trust funds with funds of other activities such as the association of apartment owners, lease rent, condominium managing agent, or the condominium hotel operator's own funds.

(c) The records of the client's trust funds shall not be commingled with the records of other activities such as association of apartment owners, condominium managing agents, or the condominium hotel operator's own funds. Upon demand, the records of the client's trust funds shall be subject to inspection by the commission or its representative. [Eff and comp 2/25/91] (Auth: HRS §§467-4, 467-30)(Imp: HRS §467-30)

§16-99-150 Conduct. (a) The condominium hotel operator shall ensure that the terms and conditions agreed upon between the apartment owner and the condominium hotel operator for operating a condominium hotel are in writing, and that a copy is given to each apartment owner. The terms and conditions include but are not limited to financial obligations, responsibilities and duties of the condominium hotel operator.

(b) The condominium hotel operator shall not accept any compensation, commission, rebate, or profit on any expenditure for or from an apartment owner, without the apartment owner's knowledge and written consent.

(c) The condominium hotel operator shall provide a monthly written accounting of the apartment owner's funds or a periodic written accounting based on the contractual agreement.

(d) The condominium hotel operator and its employees shall not violate any provisions of chapter 514A, HRS, or the rules adopted pursuant thereto and where the condominium hotel operator or its employees possess a real estate license, the licensee shall also not violate any provisions of chapter 467, HRS, and the rules relating thereto. [Eff and comp 2/25/91] (Auth: HRS §§467-4, 467-30)(Imp: HRS §467-30)

Amendments to and compilation of chapter 16-99, Hawaii Administrative Rules, on Summary page dated January 3, 1991, were adopted on January 3, 1991, following a public hearing held on December 31, 1990, after public notices were given in the Honolulu Advertiser, West Hawaii Today, Hawaii Tribute-Herald, Maui News, and The Garden Island on November 30, 1990.

These rules shall take effect ten days after filing with the Office of the Lieutenant Governor.