Real Estate Practice in Hawaii
Hawaii practice emphasizes the mandatory seller disclosure statute, honest handling of trust money, and truthful advertising. This chapter covers seller disclosure, trust funds, and advertising.
Mandatory Seller Disclosure
Under Hawaii's Mandatory Seller Disclosure in Real Estate Transactions Act (HRS Chapter 508D), a seller of residential real property must provide the buyer a written disclosure statement describing material facts about the property that are within the seller's knowledge or control. The disclosure must be provided within the statutory time frame, and the buyer generally has rights if it is not delivered properly. A licensee must not help conceal known material defects.
Trust Funds and Client Money
Trust money, including deposits received in a transaction, must be handled through the broker's client trust account and kept separate from the broker's personal and operating funds. A salesperson who receives trust money must deliver it promptly to the employing broker. Commingling or converting trust money is a serious violation of Hawaii license law and can trigger discipline and a Recovery Fund claim.
Advertising Under the Brokerage
Advertising by a licensee must be truthful and must be conducted under the name and supervision of the employing brokerage rather than the salesperson acting independently. False or misleading statements to induce a transaction are prohibited. The principal broker and broker-in-charge are accountable for the advertising of affiliated licensees.