Hawaii Real Estate Salesperson Exam — All Questions

Under Hawaii's Mandatory Seller Disclosure law (HRS Chapter 508D), a seller of residential property generally must:

• a.Guarantee the property is free of all defects
• b.Obtain a Commission appraisal before listing
• c.Disclose only defects the buyer specifically asks about
• d.Provide the buyer a written disclosure statement of material facts about the property within the statutory time frame✓

Hawaii's Mandatory Seller Disclosure in Real Estate Transactions Act requires a seller of residential real property to give the buyer a written disclosure statement of material facts within the seller's knowledge or control, delivered within the statutory time frame. A licensee must not help conceal known material defects.

When a Hawaii licensee secures a party's signature on a contract pertaining to the licensee's services, a copy must be delivered to the signer:

• a.Within three business days after the signature
• b.Before the end of the next business day
• c.At the time the signature is obtained✓
• d.At the time the transaction closes

The licensee shall deliver a copy of the agreement or contract to the party or parties signing it at the time the signature is obtained, provided that only one copy need be delivered to parties signing as cotenants. Cite: Haw. Rev. Stat. Sec. 467-13.

A Hawaii brokerage firm that does not immediately place entrusted funds with a neutral escrow depository must deposit them into a trust fund account:

• a.By the next business day following their receipt✓
• b.Within three days following their receipt
• c.Within five banking days following their receipt
• d.By the end of the calendar week of their receipt

Every brokerage firm shall deposit or place trust funds into a neutral escrow depository or into a federally insured trust fund account by the next business day following their receipt, and the neutral escrow depository shall be located in the same state where the property is located. Cite: Haw. Admin. R. Sec. 16-99-4(d).

A Hawaii client trust fund account must be maintained in the State at a federally insured depository, must be payable on demand, and must designate as trustee:

• a.The firm itself
• b.The broker-in-charge of the office
• c.The owner of the deposited funds
• d.The principal broker✓

A brokerage firm that does not immediately use a neutral escrow depository must maintain a trust fund account in this State with a federally insured bank or recognised depository; the account shall designate the principal broker as trustee and all such accounts shall provide for payment of the funds upon demand. Cite: Haw. Admin. R. Sec. 16-99-4(a).

Where a Hawaii trust account is interest bearing but the parties made no written agreement about the interest, the accrued interest is:

• a.Retained by the brokerage firm as a service fee
• b.Paid to the owner of the funds✓
• c.Split equally between the buyer and the seller
• d.Remitted to the commission for the education fund

All agreements relating to disbursement of accrued interest from the client trust account must be in writing and signed by the owner of the funds, the principal broker or broker-in-charge, and the other parties to the agreement. In the absence of a written agreement, any interest accrued shall be paid to the owner of the funds. Cite: Haw. Admin. R. Sec. 16-99-4(c).

Records of all trust funds a Hawaii brokerage firm receives must be retained for at least three years and kept:

• a.At the office of the firm's certified public accountant
• b.At the neutral escrow depository holding the funds
• c.In Hawaii, in accordance with standard accounting principles✓
• d.In any form the principal broker considers convenient

Every brokerage firm must retain for at least three years records of all trust funds received; the records must be kept in Hawaii in accordance with standard accounting principles, must show the names, dates, amounts and purposes prescribed by the rule, and are subject to inspection by the commission. Cite: Haw. Admin. R. Sec. 16-99-4(b).

A Hawaii salesperson who receives a buyer's earnest money check must deliver it to the principal broker or broker-in-charge:

• a.By the next business day after receipt✓
• b.Within three calendar days after receipt
• c.Only after the seller accepts the offer
• d.At the next scheduled office sales meeting

Property of others coming initially into the possession of a salesperson or broker-salesperson is received on behalf of the principal broker or broker-in-charge and must be delivered immediately by the next business day after receipt, unless the depositor instructs otherwise in writing. Cite: Haw. Admin. R. Sec. 16-99-4(g).

Hawaii's mandatory seller disclosure statement must be signed and dated by the seller:

• a.At least thirty days before the property is listed
• b.On the same day the purchase contract is accepted
• c.Any time before the recorded sale of the property
• d.Within six months before or ten calendar days after acceptance✓

No seller may sell residential real property unless, prior to the sale, a disclosure statement is signed and dated by the seller within six months before or ten calendar days after the acceptance of a real estate purchase contract by the buyer, and delivered to the buyer as provided in section 508D-5. Cite: Haw. Rev. Stat. Sec. 508D-4(1)(A).

No later than ten calendar days from acceptance of a Hawaii real estate purchase contract the seller must provide the disclosure statement, and the buyer then has:

• a.Ten calendar days to examine it and decide whether to rescind
• b.Fifteen calendar days to examine it and decide whether to rescind✓
• c.Twenty calendar days to examine it and decide whether to rescind
• d.Thirty calendar days to examine it and decide whether to rescind

The seller, directly or through the seller's agent, must provide the disclosure statement no later than ten calendar days from acceptance of the purchase contract, and on receipt the buyer has fifteen calendar days to examine it and decide whether to rescind. The parties may agree in writing to shorten or extend these periods. Cite: Haw. Rev. Stat. Sec. 508D-5(a), (b), (c).

A Hawaii buyer who does not deliver written notice of rescission within the fifteen-day period is deemed to have:

• a.Waived all remedies for undisclosed defects
• b.Rejected the disclosure statement by default
• c.Accepted the disclosure statement✓
• d.Extended the examination period by ten days

Failure to deliver the written notification to the seller within the fifteen-day period shall be deemed an acceptance of the disclosure statement. A rescission made within the period is without loss of deposits, which must be immediately returned to the buyer. Cite: Haw. Rev. Stat. Sec. 508D-5(b).

Hawaii's disclosure statute requires a seller to include material fact information when residential real property lies within any of five designated areas. Those areas include a special flood hazard area, an airport noise exposure area, a military Air Installation Compatible Use Zone, a tsunami inundation area, and:

• a.The sea level rise exposure area✓
• b.A lava hazard zone one or two
• c.An agricultural district under state land use law
• d.A county-designated historic preservation district

The five designated areas are the special flood hazard area, the Federal Aviation Regulation part 150 noise exposure area for a public airport, the Air Installation Compatible Use Zone of a military airport, the anticipated inundation areas on the tsunami inundation maps, and the sea level rise exposure area designated by the Hawaii climate change mitigation and adaptation commission. Cite: Haw. Rev. Stat. Sec. 508D-15(a).

Since November 1, 2023, a Hawaii seller of residential real property lying adjacent to the shoreline must also disclose:

• a.The distance from the dwelling to the certified shoreline
• b.Any shoreline setback variance granted in the last ten years
• c.The projected annual rate of coastal erosion at the site
• d.All permitted and unpermitted erosion control structures on the parcel✓

When residential real property lies adjacent to the shoreline, the seller must disclose all permitted and unpermitted erosion control structures on the parcel, the expiration dates of any permitted structures, any notices of alleged violation associated with the parcel, and any fines for expired permits or unpermitted structures. Cite: Haw. Rev. Stat. Sec. 508D-15(b), as added by Act 231, Session Laws of Hawaii 2023, effective November 1, 2023.

Which sale of Hawaii residential real property is exempt from the mandatory seller disclosure chapter?

• a.A sale by an owner-occupant to an unrelated buyer
• b.A sale by the seller to the seller's child✓
• c.A sale of a leasehold single-family residence
• d.A sale of a condominium unit more than ten years old

The chapter does not apply to a sale to a co-owner; to a spouse, parent, or child of the seller; by devise, descent, or court order; by operation of law such as foreclosure or bankruptcy; by a lessor to a lessee on conversion of leased land to fee simple; certain initial sales of new property under chapter 484; sales accompanied by an unexpired developer's public report; or sales of time share interests. Cite: Haw. Rev. Stat. Sec. 508D-3.

Hawaii's conveyance tax is charged at a higher schedule of rates where the transaction is a sale of a condominium or single family residence and:

• a.The property is held in leasehold rather than fee simple
• b.The buyer is not a resident of the State of Hawaii
• c.The purchaser is ineligible for a county homeowner's exemption✓
• d.The property is sold within one year of its last transfer

The conveyance tax rates run from ten cents per $100 up to one dollar per $100 by value; but for the sale of a condominium or single family residence for which the purchaser is ineligible for a county homeowner's exemption on property tax, the higher schedule of fifteen cents per $100 up to one dollar and twenty-five cents per $100 applies. Cite: Haw. Rev. Stat. Sec. 247-2.