Professional Practices and Conduct
The largest single area at thirteen items, covering office management and supervision, trust accounts, advertising, the licensing laws, grounds for discipline, and agency relationships and disclosure of agency.
Supervision, and what a principal broker cannot delegate away
HRS 467-1.6(a) gives the principal broker direct management and supervision of the firm and its licensees; 467-1.6(b) itemizes the responsibilities, from client trust accounts and disbursements to firm records, contracts, written policies and procedures, a continuing education policy, keeping every license current and active, and maintaining a training program. Delegation is permitted under 467-1.6(c) 'subject to the principal broker's written policies and procedures', and the principal broker stays responsible for the education, enforcement and records those policies require. HAR 16-99-2 requires at least one broker-in-charge of each branch office and provides that branch offices on an island different from the principal place of business must be registered with the Commission; HAR 16-99-3(m) puts a principal broker or broker-in-charge at the principal place of business and one or more brokers-in-charge at each branch. A firm has one and only one principal place of business. HRS 467-1.5 adds that nothing in the chapter or the rules creates an employer-employee relationship, so supervision is owed whether licensees are employees or independent contractors.
Trust funds and advertising
HAR 16-99-4(a) offers two lawful routes for entrusted funds: place them immediately in a neutral escrow depository, or maintain a trust fund account in this State at a federally insured depository designating the principal broker as trustee. Either way the money must be deposited or placed by the next business day (16-99-4(d)), records kept three years in Hawaii and open to inspection (16-99-4(b)), and commingling is prohibited (16-99-4(h)) with three narrow exceptions: holding an uncashed check before acceptance at the buyer's direction, holding one after acceptance at the seller's direction with written disclosure, and keeping a minimum balance to keep the account open. Leaving earned commissions in the client account beyond a reasonable time is named as commingling. On advertising, HAR 16-99-11 requires the firm's licensed or registered name on all materials, forbids a licensee to advertise 'For Sale by Owner', requires every current licensee whether active or inactive to disclose licensee status, and requires a leasehold property advertised for sale to be identified by the word 'leasehold'.
Licensing, discipline and the agency disclosure
Broker candidates need three of the past five years as a full-time Hawaii-licensed salesperson (HRS 467-9.5(a)(4)(B)(iii)), with full-time defined by HAR 16-99-19.2(b) as averaging at least forty hours a week and no pro rata credit for part-time work; the certificate is valid two years. Licenses expire on December 31 of each even-numbered year (HRS 467-11(b)), and a renewal without the twenty continuing education hours required by HRS 467-11.5(a) is issued on inactive status. HRS 467-14 lists the grounds for discipline, including paragraph (4) acting for both parties without written consent, paragraph (12) failing to obtain confirmation on the contract of whom the broker represents, paragraph (13) violating chapter 515, and paragraph (21) acquiring an interest in a distressed property listed with the licensee or within 365 days after the listing ends. Hawaii's fair housing statute, HRS 515-3, protects more classes than federal law, including sexual orientation, gender identity or expression, marital status, age, ancestry and HIV infection. Finally the agency rule: HAR 16-99-3.1(c) requires disclosure to the buyer 'prior to preparing any contract between the buyer and the seller' and 16-99-3.1(d) to the seller before presenting one; 16-99-3.1(e) allows that disclosure to be written or oral with no particular language required, but requires written confirmation in a contract paragraph titled 'AGENCY DISCLOSURE' in at least ten-point bold print; 16-99-3.1(h) requires a buyer's agent to disclose that agency to the seller or listing firm before negotiations are initiated; and 16-99-3.1(g) requires dual agency consent to describe the representation, since a general statement that the licensee represents both is not sufficient.
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State-specific details
State exam facts
- State regulator
- Hawaii Real Estate Commission (DCCA)
- Exam vendor
- PSI
- Scored questions
- 125
- Time limit
- 240 minutes
Who regulates real estate brokers in Hawaii?
The Hawaii Real Estate Commission, within the Department of Commerce and Consumer Affairs (DCCA), licenses brokers and salespersons. The Commission contracts with PSI to deliver the exams.
What experience do I need before the Hawaii broker exam?
Broker applicants must have been a Hawaii-licensed salesperson associated with a Hawaii-licensed broker for at least three of the five years immediately before applying, and must obtain an approved Broker Experience Certificate before registering for the exam — otherwise the exam score is invalidated.
How is the Hawaii broker exam structured?
The Hawaii broker exam has about 125 questions in a uniform (general) portion and a Hawaii-specific portion, delivered by PSI over 4 hours. Confirm the current passing score for the broker exam with the Commission.
Sources: https://cca.hawaii.gov/reb/real_ed/real_ed-exam_lic/, https://cca.hawaii.gov/reb/16-99-19-2-experience-certificate-application/
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