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Alvin M. Imamura, ChairNora A. Nomura, Vice ChairCharles H. AkiMichael G. ChingAlfredo G. EvangelistaMitchell A. ImanakaHelen LindemannJohn OhamaIris R. OkawaPatricia Choi
1999 Annual Report
Real Estate Commission
State of HawaiiDepartment of Commerce and Consumer AffairsProfessional and Vocational Licensing Division
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Kathryn S. Matayoshi, DirectorGilbert S. Coloma-Agaran, Deputy Director
Noe Noe Tom, Licensing Administrator
Real Estate Branch:
Calvin Kimura, Supervising Executive OfficerChristine Rutkowski, Executive Officer
Pamela T. Garrison, Senior Real Estate SpecialistCynthia Yee, Senior Condominium Specialist
Russell Wong, Real Estate SpecialistNaomi Cole, Real Estate Specialist
Gina Watumull, Condominium SpecialistMorris Atta, Condominium Specialist
Irene Kotaka, SecretaryTammy Norton, Secretary
Karyn Takahashi, Clerk StenographerRobert Ito, Clerk
Jon Gasper, ClerkLeilani Yam, Clerk
Toalua Lavatai, Clerk TypistJanelle Sarae, Clerk Typist
250 South King Street, Room 702Honolulu, HI 96813
Telephone: 586-2643Web: http://www.state.hi.us/hirec
(C) Copyright Hawaii Real Estate Commission 1999.All rights reserved. Funded by the Real Estate
Education Fund and the Condominium EducationFund and provided as an educational service to realestate licensees and the condominium community.
This publication is designed to provide generalinformation on the subject matters covered and is not
a substitute for professional services to addressspecific situations. If legal advice or other expert
assistance is required, seek the services of acompetent professional.
This material can be made available for individualswith special needs. Please call the Senior Real
Estate Specialist at 586-2645 to submit your request.
State of HawaiiReal Estate Commission
Professional and Vocational LicensingDivision
Department of Commerce and ConsumerAffairs
1999 REAL ESTATE COMMISSION
Alvin M. ImamuraChairMaui
Nora A. NomuraVice Chair
Oahu, Public Member
Charles H. AkiChair, Education Review Committee
Hawaii
Michael G. ChingChair, Laws and Rules Review Committee
Kauai
Alfredo G. EvangelistaChair, Condominium Review Committee
Oahu, Public Member
Mitchell A. ImanakaVice Chair, Condominium Review Committee
Oahu
Helen LindemannVice Chair, Education Review Committee
Oahu
John Ohama Vice Chair, Laws and Rules Review Committee
Oahu
Iris R. OkawaOahu, Public Member
Patricia ChoiOahu, Incoming Commissioner
Table of Contents
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Table of Contents ............................................... 2The Chair’s Message ......................................... 3Laws and Rules Review Committee Report ........ 4Education Review Committee Report ................. 6Condominium Review Committee .................... 12Licensees ......................................................... 25Administrative Actions ...................................... 28Regulated Industries Complaints Office (RICO) 29Real Estate Education Fund ............................. 32Real Estate Recovery Fund .............................. 33Condominium Education Fund ......................... 34FY 1999 Program of Work ................................ 35FY 2000 Program of Work ................................ 38
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The Chair’s MessageThe Honorable Benjamin J. Cayetano, Governor, State of
Hawaii and Ms. Kathryn S. Matayoshi, Director, Department ofCommerce and Consumer Affairs:
This report on the fiscal year 1999 activities of the Real EstateCommission illustrates a typical year of events in addition to addedresponsibilities that arose due to renewals and changes in legislation. TheCommissioners met the challenges set before them with great fervor.Thus, we ended the fiscal year with a great sense of satisfaction andfulfillment.
I would like to take a moment to acknowledge and thank my ViceChair, Nora Nomura. The boundless effort of Nora and her fellow
Commissioners were greatly appreciated. Commissioners Aki, Ching, Nomura, Evangelista,Lindemann, Ohama, Imanaka, and Okawa met two days each month in committee and orCommission meetings. They also worked on Commission programs during their own time, whichfurther demonstrates their commitment. I would like to express my heartfelt gratitude toCommissioner Helen Lindemann, Vice Chair for the Education Review Committee, whose termended in June. We welcome Patricia Choi as successor to her seat on the Commission.
The declining licensee population of the 1990’s, and its impact on the real estate recoveryand real estate education funds, may have stemmed. For the first time since 1990, there was anincrease (21%) in the number of new licenses issued. At the same time, the usual renewal year’sdecline in total numbers of licensees (-15%) was less than it has been the past four renewals. Atthe end of the fiscal year, June 30, there were 13,033 active and inactive licensees.
The Commission is also responsible for the registration of condominium associations,condominium hotel operators, and condominium managing agents. In 1999, 1,361 associationsrepresenting 114,449 apartments registered with the Commission. There were also 117 registeredcondominium hotel operators and 113 registered condominium managing agents.
The Commission’s staff continued to field a monumental number of inquiries andapplications while processing the renewal of 13,000 licenses and implementing significant changesto the licensing and condominium laws. Our staff worked on over 60,000 real estate andcondominium inquiries and applications.
The Commission’s web site continues to thrive, receiving 57,686 hits during the 1999 fiscalyear. This is 2 1/2 times the number of hits received in 1998. We will continue to expand the website, as it has become the Commission’s primary publication. It is the most cost-effective means ofcommunicating with licensees, the condominium community, and the public.
As can be seen in this report, the Commission has had a very busy and productive 1999.
Aloha,
Alvin M. ImamuraChair
Th
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Laws and Rules Review Committee Report
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Under the leadership of Chair Michael G.Ching and Vice Chair John Ohama, the Lawsand Rules Review Committee was responsiblefor the Commission’s legislative activities,rulemaking process, administration of the realestate recovery fund, and licensing programs.
1999 Licensing Legislation
Act 240 (S.B. No. 238) made numerouschanges to the real estate licensing law, Chapter467, HRS, as follows:
a. Transferred the responsibility forcertification of continuingeducation instructors from theCommission to CE providers.
b. Authorized the Commission toissue a preliminary, nonbindingdecision on an individual’s licenseapplication.
c. Changed the licensing of branchoffices to a registrationrequirement.
d. Eliminated the requirement thatsalesperson licenses bedisplayed at the office.
e. Changed the broker experiencerequirement to experience as afull-time salesperson under aHawaii broker for three yearsprior to the examination.
f. Permits the Commission flexibilityin administration of the licensingexamination.
g. Allows the Commission to set arenewal deadline prior to theDecember 31 license expiration.
h. Simplified the requirements forrestoration of forfeited licenses.
i. Abolished the requirement forregistration of site offices.
Act 47 (H.B.791) codified theresponsibilities of principal brokers, combinedcontinuing education provisions into a newsection for easier review and understanding,increased the flexibility and options for providing
continuing education courses, made continuingeducation providers responsible for certifyingtheir instructors, and directed the HawaiiAssociation of Realtors to convene a work-studygroup to discuss continuing education issuesand to make proposals to the next legislature.
The new principal broker responsibilitysection incorporated the existing requirementsof Hawaii Administrative Rules §16-99-71 andrequires principal brokers to develop a trainingprogram and ensure that associated licenseesare knowledgeable and current on licensinglaws and rules. Principal brokers must developpolicies for handling real estate transactions andfor continuing education requirements forassociated licensees, in compliance with thestatutory requirement.
The act deregulated continuingeducation instructor certification by making theproviders responsible for certifying that theirinstructors meet the Commission’srequirements. It clarified the Commission’sauthority with respect to setting the number ofcredit hours per course, setting content andother requirements for courses, providers andinstructors, and specifying mandatory corecourses or equivalencies.
Recovery Fund
One of the Committee’s responsibilities isto oversee the real estate recovery fund. In1999, the Commission received 13 notices ofthe filing of court cases that might result inpayment from the fund. The number of noticesreceived was 28% fewer than the 18 received in1998. See Chart 1. The real estate recoveryfund paid out $25,000 in claims in 1999. Thisdollar amount was substantially lower than the$145,000 paid out in 1998. See Chart 2.
5
0
10
20
30
40
50
60
Fiscal Year
Notices ReceivedReal Estate Recovery Fund
Notices 52 19 38 32 8 23 27 26 18 13
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
Fiscal Year
Claims PaidReal Estate Recovery Fund
Claims Paid ($) 39,072 44,669 41,151 169,000 12,500 0 105,554 35,971 145,000 25,000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Laws and R
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Com
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Chart 1. Recovery Fund - Notices
Chart 2. Recovery Fund - Claims Paid
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Education Review Committee ReportCommissioner Charles H. Aki served as
Chair of the Education Review Committeewith Commissioner Helen Lindemann as ViceChair. The Committee is responsible for mostof the Commission’s real estate educationprogram, overseeing the real estate licensingexamination, and administering the realestate education trust fund.
Publications
The Commission continues to publishthe Real Estate Bulletin, School Files, HawaiiCondominium Bulletin, and a Web site(www.state.hi.us/hirec, referred to as hirec).In a cost saving measure, in 1997 and 1998,one issue of the Real Estate Bulletin servedas the Commission’s annual report in lieu of a
separate publication. Instead of using theBulletin, this year’s annual report is a separatepublication but with very limited printdistribution. The annual report will, however,be made generally available to licensees andthe public through its publication on hirec.
The Bulletin has been the Commission’slifeline to its licensees but is rapidly beingeclipsed by hirec. While the Bulletin providesa traditional means of communicating withlicensees, it is costly to produce and itsquarterly publication limits its timeliness. Itprobably still has the largest audience of theCommission’s publications, as it is mailed toall current licensees, government officials,legislators, and equivalent regulatory bodiesin other states and countries. The Bulletin’s
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Real Estate Commission Web Site Hits
(www.state.hi.us/hirec )
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
SEP, 199
6OCT
NOV
DEC
JAN, 1
997
FEBM
ARAPR
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JUN
JUL
AUG
SEPOCT
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JAN, 1
998
FEBM
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JUL
AUG
SEPOCT
NOV
DEC
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999
FEBM
ARAPR
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Month
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Chart 3. Web Site Hits
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articles cover current issues, theCommission’s activities, and schedules of realestate related educational offerings.
While the Bulletin’s content is directed atreal estate licensees, the Commission alsoregulates other specialized sectors in whichissues and needs are not covered in theBulletin. To address those sectors, theCommission also publishes the HawaiiCondominium Bulletin and School Files.School Files is published quarterly anddistributed to the real estate educationcommunity, including prelicense andcontinuing education schools, providers, andinstructors. The Hawaii Condominium Bulletin,also a quarterly publication, falls under theCondominium Review Committee’s guidance
and is published specifically for Hawaii’scondominium community.
hirec is designed to reach all of thesectors served by the Bulletin, HawaiiCondominium Bulletin, and School Files butwithout any of the printing or distributioncosts. In addition, hirec can be immediatelyupdated and does not have space limitations.Licensees and the public are able to obtainforms, licensing information, brochures,copies of the Bulletin, Hawaii CondominiumBulletin, or School Files, meeting agendasand minutes, lists of certified or registeredschools, providers, condominium managingagents, and condominium hotel operators,and schedules of courses and other realestate related events. Since its inception in1996, hirec’s “readership” has grown
19901991
19921993
19941995
19961997
19981999
0
1,000
2,000
3,000
4,000
5,000
6,000
No
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Fiscal Year
Licensing Examination Candidates
1990 - 1999
Brokers
Salespersons
Total
Brokers 532 679 552 371 278 255 193 178 207 187
Salespersons 4,894 3,208 2,495 1,569 1,575 1,444 1,258 952 955 1,082
Total 5,426 3,887 3,047 1,940 1,853 1,699 1,451 1,130 1,162 1,269
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
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Chart 4. Licensing Examination Candidates 1990 - 1999
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enormously as shown in Chart 3. It is by farthe most cost-effective means available to theCommission of communicating with licensees,other regulated sectors, and the public. TheCommission will continue to promote andexpand hirec, increasing accessibility topublications, forms, and timely information.
Real Estate Licensing Examination
The 1990’s began with seven straightyears of substantial declines in the number oflicensing candidates, and ended with twoyears of modest increases. 1998’s 2.8%increase was followed by a 9.2% increase in1999. However, the number of candidatestested in 1999 is less than a fourth of the
5,426 candidates that were tested in 1990.For a historical perspective, refer to Chart 4.
In 1999, the number of brokercandidates declined by 9.7%, while thenumber of salesperson candidates increasedby 13.3%. The passing rates, including repeatcandidates, on both salesperson and brokerexaminations increased. 47% of brokercandidates and 74% of salespersoncandidates passed the examination. (For acomparison with past years, refer to Table 1).
Table 1. Real Estate Licensing Examination
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The passing rate is usually much higheramong first time candidates, and in 1999, 58%of first time candidates passed the broker’sexamination and 82% the salesperson’sexamination.
Also in 1999, three candidates took andpassed the instructor’ examination. Theexamination is required for prelicenseinstructor applicants, and current instructorsmust pass the examination every three yearsas a condition of recertification.
During the year, the Commissioncompleted the lengthy process of issuing arequest for proposals (RFP) for examinationservices and selecting a contractor. Threecompanies expressed interest in the RFP, but
only two, ASI and NAI-Block, submittedproposals. After an exhaustive review of theproposals, the selection committee’s scores forthe two submissions were very close with ASIat the top. As a result, ASI was selected as theCommission’s contractor for examinationservices. The new contract increased the feefrom $65 to $68, but also included additionalservices to provide the Commission moreflexibility and added features in examinationadministration.
FY 1999 FY 1998Change
from 1998 FY 1990
Changefrom1990
CandidatesTested Broker 187 207 -10% 532 -65% Salesperson 1,082 955 13% 4,894 -78%Total Tested 1,269 1,162 9% 5,426 -77%
Candidates Pass Broker 87 76 14% 268 -68% Salesperson 798 670 19% 3,263 -76%Total Pass 885 746 19% 3,531 -75%
% Pass Broker 47% 37% 50% Salesperson 74% 70% 67%
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Neighbor Islands Outreach
By law, the Commission is required tohold meetings on the neighbor islands. In the1999 fiscal year, the Commission convenedits committee meetings on Kauai inSeptember 1998 and in Kona in May 1999.
Specialists’ Office for the Day
The Commission’s staff of real estateand condominium specialists also visits theneighbor islands as part of the Specialists’Office for the Day program. Licensees andother interested parties are invited to face toface discussions of their issues or questionswith the specialists. Specialists were in Kona,Kahului, and Lihue in November 1998 todiscuss general real estate and condominiumquestions, and a representative fromLicensing Branch also assisted licensees incompleting their renewal applications. For thefirst time, neighbor island licensees were alsoable to submit their renewal applications atthe sessions.
Speaker Program
In November, the Supervising ExecutiveOfficer discussed renewals, advertising, theWeb page, and answered questions at aKauai Board of Realtors function. He wasalso a speaker at a National Association ofResidential Property Managers (NARPM) -Big Island Chapter event.
Prelicense and Continuing Education
As all real estate licenses were requiredto renew their licenses during the 1999 fiscalyear, licensees that wanted to renew onactive status were required to complete tenhours of continuing education. Most licenseestook their CE courses in the second half of1998. During the year there were 975continuing education classes with a totalenrollment of 19,358. The courses weredelivered by 18 CE providers and 28instructors.
Candidates for the licensingexamination complete a prelicense course (45hours for salespersons and 46 hours forbrokers). During the year 960 salespersonand 115 broker candidates completedprelicense courses offered by the 11prelicense schools and 14 instructors.
Hawaii Real Estate Research andEducation Center
In 1999, the Hawaii Real EstateResearch and Education Center at theUniversity of Hawaii at Manoa, funded in partby the real estate education fund, carried outa number of programs for the Commission.The Center continued to administer theProfessional Responsibility course for theCommission. The independent study courseis one option available to the Commissionwhen assigning courses to licensees whohave been subject to disciplinary action. In1999, two licensees enrolled to take thecourse. The Center also continued to updateits Real Estate Laws and Rules Manual,administer a system to evaluate real estateinstructors, and maintain a webpage.
The Commission has supported theCenter since 1982 through funding from boththe real estate education fund and thecondominium education fund. Over the years,the Center, its Advisory Committee, and itsable staff have made significant contributionsto the Commission, the real estate industry,and to the community. However, for economicreasons, the Commission will not fund theCenter beyond the 1999 fiscal year.
Participation with other Organizations
The Commission continued itsparticipation in a number of national and stateorganizations. Over the years, theCommission has been very active in twonational associations, the Association of RealEstate License Law Officials (ARELLO) andthe Real Estate Educators Association(REEA). Commissioners and staff haveserved in leadership roles with ARELLO and
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many of the Commission’s programs havereceived recognition from both organizations.Other national groups that the Commissioninteracts with include: the ConsumerFederation of America, the NationalAssociation of Realtors, the National LandCouncil, and the Federation of Associations ofRegulatory Boards.
Commissioners and staff participated inmany of the Hawaii Association of Realtorsevents in 1999, including its 1998 conventionon Kauai in October, and its legislation updatesession in July. The Commission alsoparticipates with each island’s Board ofRealtors, the Hawaii Association of Real EstateSchools, and other trade organizations.
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Chart 5. Inquiries and Applications
Advice, Education, Referral
One of the major responsibilities of theCommission’s staff is to respond to amonumental number of inquiries, requests,and applications from the public and licensees.Chart 5 depicts the volume of real estateinquiries received by the Commission staff.
The staff reviews and processes thefollowing applications:
Broker experience certificateLicense application for individual
broker, corporation,partnership, LLC,sole proprietor, andsalesperson
19951996
19971998
1999
0
5,000
10,000
15,000
20,000
25,000N
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of
Re
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Fiscal Year
Inquiries and Applications - Real Estate
Walk-ins 2,418 2,790 2,600 2,748 1,852
Applications/written requests 3,682 5,090 7,600 6,010 10,072
Telephone 18,485 20,785 19,300 16,761 20,038
1995 1996 1997 1998 1999
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Certificates of Appreciation
The Commission issues Certificates of Appreciation to individuals who have continuously andunselfishly contributed their time and knowledge to the Commission’s programs and to the industry.In appreciation for their dedication, the Commission awarded Certificates of Appreciation to thefollowing individuals:
Helen Lindemann Outgoing Commissioner
Sharon On Leng Complaints Enforcement Officer, Regulated IndustriesComplaints Office (RICO)
Steve Francis Executive Vice-President, Association of Real EstateLicense Law Officials (ARELLO)
Linda Newman Administrative Assistant, Association of Real EstateLicense Law Officials (ARELLO)
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Branch office and site officeRestoration of licenseReinstatement of licensePrelicense education equivalency
Real estate change formLicense historyPrelicense school and instructorContinuing education provider, instructor,
and course
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Condominium Review Committee
Chair Alfredo Evangelista and ViceChair Mitchell Imanaka directed theCondominium Review Committee’s 1999fiscal year program of work.
The Condominium ReviewCommittee (CRC) is a Commissionstanding committee that holds monthlypublic meetings in which condominiumissues are presented, discussed,examined, and considered. This is aworking committee that handles “nuts andbolts” issues. Developers, apartmentowners, board of directors, condominiummanaging agents, attorneys, educators,researchers, government officials, andothers with condominium concernsparticipate at the meetings.
The responsibilities of the CRCinclude: registration of condominiumprojects by developers; condominiumassociation (AOAO), condominiummanaging agent (CMA), and condominiumhotel operator (CHO) registrations,governance, education and researchprograms, inclusive of the programs fundedunder the Condominium Education Fund(CEF). In past fiscal years, some of theeducational programs were administeredwith the assistance of the Hawaii RealEstate Research and Education Center(HREREC) with funds from CEF. Due tothe overall budgetary considerations, at theend of FY 1999, the Commissionterminated its contract with the HREREC.
This fiscal year, with the millenniumapproaching, the CRC, withoutcompromising consumer protectionmeasures, increased its efforts to: minimizegovernment involvement in thosecondominium governance areaslegislatively intended for self governance;and streamline the registration of
condominium projects, AOAOs, CMAs andCHOs.
To broaden its programs in the areaof condominium education, the CRCengaged in the development of workingrelationships with organizations involved incondominium association education. Thus,this fiscal year, funds from the CEF wereused to subsidize a portion of the seminarregistration fees of condominium apartmentowners from registered AOAOs. Thesubsidy was provided only for qualifiedseminars approved by the Commission. Inaddition, the CRC continued theimplementation of its ongoing programs.
The enactment of new laws at theend of the fiscal year impacted the CRC’sAdvice, Education, and Referral program ofwork item. Condominium board members,apartment owners, CMAs and interestedothers inquired about the following newlaws: the collection of delinquencies forcommon expenses; additional statutoryoptions for investment of association ofapartment owner’s funds; voluntarycondominium lease fee conversions;conditions for allowing child care homes incondominiums; and other relatedlegislation.
The law requires the Commission tosubmit to the legislature annually: (1) asummary of the programs funded duringthe prior fiscal year with funds from theCEF, (2) the amount of money in the fund,and (3) a copy of the budget for the currentfiscal year, including summary informationon programs which were funded or are tobe funded. This portion of the reportincludes a summary of the CEF programsthat have been funded for the prior fiscalyear (1999) and the current fiscal year(2000).
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Summary of Programs ForFiscal Year 1999:
Hawaii Condominium Bulletin -Develop, write, edit, print and distribute aquarterly bulletin to all registered AOAOsand registered CMAs. Study feasibility ofproviding the bulletin through electronicmedium. Publish the Bulletin on itsWebsite at http://www.state.hi.us/hirec.
Chart 6. Developer’s Public Reports Effective Dates Issued
Developer's Public Reports Effective Dates Issued FY 1991-1999
0
50
100
150
200
250
300
350
400
450
500
550
600
650
No. of developer's
public reports
Contingent Final * 7
Preliminary 46 41 36 36 27 29 12 25 23
Final 218 205 222 208 243 249 125 175 241
Supplementary 27 31 26 14 42 40 43 55 49
Extensions 67 67 89 112 187 238 247 279 253
Total 358 344 373 370 499 556 427 534 573
1991 1992 1993 1994 1995 1996 1997 1998 1999
Note: * Contingent Public Report effective June 16, 1997.
Condominium Apartment Owners on theCommission
The following members of the RealEstate Commission are condominiumapartment owner/occupants:
Alfredo G. Evangelista, Chair of theCondominium Review Committee
Iris R. OkawaPatricia Choi
Commissioner Michael G. Ching is acondominium apartment owner.
14
Condominium Project Filings Received -- Fiscal Years 1995 -- 1999
New Projects 1995* 1996* 1997* 1998 1999
Residential 66 42 40 84 47No. of Apartments Represented 2456 1519 1378 862 1028
Commercial and Other 25 16 25 5 11No. of Apartments Represented 152 78 175 198 81
Agricultural 18 27 27 28 27No. of Apartments Represented 57 57 104 83 62
Total New Projects 109 85 92 117 85Total No. of Apartments Represented 2781 1654 1647 1143 1171
Conversions
Residential 119 74 66 54 73No. of Apartments Represented 1106 386 981 665 368
Commercial and Other 9 8 6 4 11No. of Apartments Represented 713 68 56 87 734
Agricultural 9 21 37 51 42No. of Apartments Represented 36 53 187 130 90
Total Conversion Project 137 103 109 109 126Total No. of Apartments Represented 1856 496 1118 882 1192
Combined New & Converted Project Filings 246 188 201 226 211Combined No. of Apartments Represented 4637 2150 2765 2025 2363
* Note 1: Numbers and totals may differ from those reported in prior annual reports due in part to the change in the database management software.
Note 2: In mixed use condominium projects, the predominant use is reported. This is done to prevent the multiple counting of a project filing.
Table 2. Condominium Project Filings
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HREREC Interactive Program - Co-participate with Commission at neighborisland meetings.
Condominium Hotline - Administer intandem with the real estate hotline thedelivery system of condominiuminformation for the neighbor islandcommunity utilizing the WATTS line.
HREREC Webpage - Maintain and improvea webpage. Coordinate the transfer ofHREREC webpage to Commission’swebpage.
HREREC Administration - Plan andimplement transfer to Commission
remaining programs, education/researchmaterials, reference materials, records,equipment, computers, etc. on or beforeJune 1999.
Rule-Making - Chapter 107 - Study andevaluate Chapter 107 and HRS Chapter514A, for rule-making, considerderegulation without reducing consumerprotection. Develop drafts of proposerules, review/comment by focus groups andother interested parties.
Rule-Making - Chapter 53, Fees - Monitorand review services provided in relation tofees. Develop drafts of propose rules,assist in formal rule making process withLicensing Administrator.
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Condominium Project and Developer’sPublic Reports - Administer registrationprogram. Evaluate the process, records,forms, information documents, rules;coordinate with other governmentalagencies, attorneys, etc., to ensure moreexpeditious processing and review time.Plan, develop, and administer anylegislative amendments needed.Administer consultant contracts. Studyfeasibility of finding other means ofproviding access to developer’s publicreports. Consider feasibility of including inCommission’s webpage a listing of projectswith current developer’s public reports.See Charts 6, Table 2, and Charts 7 and 8.
Condominium AssociationRegistration - Administer registrationprogram. Review and monitor program forimprovement including computer generated
registration forms with previous responses,public list of all registered AOAOs. Plan,develop, and administer any legislativeamendments. This year marked thesecond time AOAOs registered for abiennium period. See Chart 9.
Condominium Managing AgentRegistration - Administer registrationprogram. Review and monitor program forimprovement and problem resolutions withLicensing Branch. List all registered CMAsin Commission’s webpage and makeavailable preprinted lists upon request.See Chart 10.
Condominium Hotel OperatorRegistration - Administer registrationprogram. Review and monitor program forimprovement and problem resolutions withLicensing Branch. List all registered CHOs
Chart 7. Number of Condominium Apartments
1995 1996 1997 1998 1999
Conversion Filings
New Project Filings
Total of Apartments Represented -New & Conversion Filings
0500
10001500200025003000350040004500
5000
Num
ber
of A
part
men
ts
Rep
rese
nted
Number of Condominium Apartments Represented FY 1995-1999 New and Conversion Project Filings of Developers
Conversion Filings 1856 496 1118 882 1192
New Project Filings 2781 1654 1647 1143 1171
Total of Apartments Represented -New & Conversion Filings
4637 2150 2765 2025 2363
1995 1996 1997 1998 1999
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Chart 9. Condominium Association Registration
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Condominium Association Registration FY 1990-1999
0100
200300
400500
600700
800900
1,0001,100
1,2001,300
1,4001,500
No
. of
Reg
iste
red
Ass
oci
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ns
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000N
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No. of Registered Associations No. of Apartments Represented
No. of Registered Associations 201 809 968 1,049 1,114 999 1,161 1,277 1,339 1,361
No. of Apartm ents Represented 20,066 74,916 87,127 91,424 95,827 85,296 101,629 106,052 112,832 114,449
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Chart 8. New Residential Projects - By Project Size
1989
1991
1993
1995
1997
1999
Over 50
16 -- 50
3 -- 15
2 or less
Total
0
20
40
60
80
100
No. of Units
Fiscal Year
Project Size
New Residential Projects -- By Project Size FY 1989-1999
Over 50 14 27 23 14 17 23 16 10 4 3 5
16 -- 50 19 14 22 19 16 12 13 5 7 10 11
3 -- 15 11 12 17 11 4 5 8 7 15 19 18
2 or less 20 34 37 25 23 12 23 15 11 52 13
Total 64 87 99 69 60 52 60 37 37 84 47
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
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in Commission’s webpage and makeavailable preprinted lists upon request.Study and determine sources to locateunregistered CHOs, and initiate initialcompliance through education. Developand distribute startup kits for CHOs, similarto CMAs. See Chart 10.
Recodification of Chapter 514A - Initiatethe plan for recodification based on the1995 Commission’s report to theLegislature, “A Plan to Recodify Chapter514A, Hawaii Revised Statutes,Condominium Property Regime;” includerecommended legislation, budget, andcoordination of a special Commission taskforce.
Condominium Education Fund (CEF) -Administer fund. Prepare, maintain, andreview of budget, finance, and records forthe CEF. Prepare monthly and annualfinancial statements, budgets, administer
Chart 10. CMA and CHO Registrations
fund investment. Plan and work withdepartment to increase budget for FY00 foradditional educational programs. Deferaudit, review, and study the feasibility ofless costly alternative to a biennial audit.See page 34.
Advice, Education, and Referral - Provideadvice, education, and referrals to thecondominium community, applicants,consumers, licensees, governmentofficials, organizations, and the public.Print and distribute copy of HRS Chapter514A to all registered AOAOs and CMAs.Study and report on the feasibility ofproviding information and advice ontelephonic prerecorded messages.Maintain and improve webpage. SeeChart 11.
Condominium Mediation and ArbitrationProgram - Administer mediation programs.Research, develop, and publish a brochure
0
20
40
60
80
100
120
No. of registrants
Condominium Managing Agents (CMAs) & Condominium Hotel Operators (CHOs) Registrants
Fiscal Years 1992 -- 1999
CHOs
CMAs
CHOs 49 60 76 94 92 103 112 117
CMAs 84 99 98 104 104 113 116 113
1992 1993 1994 1995 1996 1997 1998 1999
18
on dispute resolution, mediation, andarbitration including “trial de novo.”Coordinate joint complaint/mediationprogram with RICO. Study feasibility ofinitiating program in other neighbor islands.Continue condominium governancemediation arrangements with providers.See Chart 12.
Meetings and Symposium - Plan,coordinate, and conduct monthly CRCmeetings. Include schedule of meetingsand agendas on Commission’s webpage.
Legislative Acts and Resolutions -Review and carry out responsibilities ofLegislative acts and resolutions, amendpublic copy of HRS Chapter 514A, providesummary of condominium and related actsand resolution for Commission/staff/bulletin, etc.
Government and LegislativeParticipation and Report - Research,develop and distribute annual report to theLegislature on CEF programs and funds;consider inclusion on the Commission’swebpage. Provide briefings to Legislatorsand staff; act as a resource. Attendhearings, provide written and oral testimonyon legislative bills, and bill tracking.Respond to elected officials, inquiries orcomplaints, request for information, etc.
Neighbor Island Outreach - Coordinateand conduct two CRC meetings at neighborisland sites with ERC and LRRC. Thisfiscal year the CRC convened meetings onKauai in September 1998 and in Kona inMay 1999.
Interactive Participation withOrganizations - Active participation withHawaii, Pacific Rim, national andinternational organizations and governmentagencies for the exchange of informationand concerns, sharing of education andresearch efforts, joint projects of mutual
concern, training, etc. through attendance,membership and participation at local,regional, national, and internationalmeetings, including CAI, CAI Hawaii,HCAAO, HICCO, South Maui Council,IREM, ARELLO, Hawaii State Bar, andZenkauren (Japan).
Condominium Seminars - Use existingeducational resources, subsidize, sponsor,assist, or cosponsor statewide seminarsand other educational offerings targeted forapartment owners and board members ofregistered AOAOs, registered CMAs andother interested parties. Broadencondominium educational offerings;develop working relationships withorganizations involved in condominiumeducation. After approaching variouseducators, the Commission contracted withCAI Hawaii to form a partnership inproviding education to board of directorsand apartment owners of registeredAOAOs through CEF funding.Approximately fifty-one percent of thoseattending the first inaugural seminar,“Almost Free Legal Advice,” wereapartment owners of registered AOAOs.This inaugural group of apartment ownerswas able to ask a panel of practicingcondominium lawyers advice andinformation about condominium issues andconcerns. At the close of the fiscal year,CAI Hawaii had finalized its plans to submitfor Commission approval a number ofseminars for the next fiscal year.
Condominium Association Budget andReserves - Review existing Commissionmaterials, make amendments anddistribute where applicable; monitor andreport on IRS position on budget andreserves.
Condominium Specialists Office for theDay - Set up office at various neighborisland locations to meet and discusscondominium concerns. Joint program with
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Chart 11. Advice Education and Referral
1994 1995 1996 1997 1998 1999
0
5000
10000
15000
20000
25000
30000
35000
40000
Fiscal Year
Advice Education and Referral Fiscal Years 1994 - 1999
Total Calls Walk Ins Written Requests/Applications
Total 12757 34465 35600 30200 23784 32924
Calls 9690 14770 15500 12000 10348 11721
Walk Ins 763 1832 1300 1200 1293 1568
Written Requests/Applications 2304 17863 18800 17000 12143 19635
1994 1995 1996 1997 1998 1999
Note: Numbers may vary from year to year due to different factors.
20
Real Estate Specialist of the Day. Thisyear, the Office for the Day was held in Hiloand Kona, Hawaii; Kahului, Maui; andLihue, Kauai.
Condominium Speakership Program -Honor requests for speaking engagementsfor some type of program concerning orrelated to condominium issues.
New Technology Program - Administer in-house and network computer system;including training, purchases, and DCCAand PVLD plans. Study feasibility of newtechnology in the storage, printing ofdeveloper’s public reports, registration andpublic information.
Condominium Reference Library -Develop in Commission webpage a catalog
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of all public reference materials provided toState Libraries and at the Real EstateBranch (REB) office. Develop and maintainmaterials for a condominium referencelibrary at public libraries, REB office,mediation services offices and neighborislands.
Start-up Kit for New AOAOs and NewCMAs - Distribute start-up kit to newregistered AOAOs and CMAs includingpublic copy of HRS Chapter 514A, andrules, budget and reserves guide, board ofdirectors guides, past condominiumbulletins.
Cooperative Education, Research, andAdministrative Program - Participate inand sponsor cooperative educationresearch and administrative programs.
Chart 12. Condominium Governance Mediations
Condominium Governance Mediations FY 1995 - 1999
0
5
10
15
20
25
30
35
Total Number of Requests
Neighborhood Justice Center OfHonolulu, Inc.
12 0 27 30 13
Mediation Services of Maui Inc. 2 6 0 4 4
1995 1996 1997 1998 1999
21
Division and Department Program -Coordinate activities and programs ofmutual concern with the PVLD, RICO andthe DCCA; including Director’s project onderegulation; review, analyze, andcoordinate positions on HRS Chapter 436Bwith PVLD and AG’s as it relates to HRSChapter 514A. Coordinate joint complaint /mediation program with RICO.
Records Management - Administer andorganize all records, reference materials,reports, minutes, legislation, rules, AGopinions, contracts, etc., with applicablelaws including the Uniform InformationPractices Act and Records Report System.
CPR Project Workshop and Meetings -Conduct periodic workshops forcondominium consultants for purposes oforientation and information.
Case Law Review Program - Monitor,collect, and report on judgments anddecisions on Hawaii, federal, and otherstates’ court cases; report on governanceand development cases; material cases tobe considered for Condominium Bulletin.
Limited Equity Cooperatives - Developforms, procedures and process for LimitedEquity Cooperatives, HRS Chapter 421H,falling within the limited responsibility of theCommission.
Staff and Commissioners Development -Develop and train REB staff andCommissioners. Participate in trainingprovided by CAI, ARELLO, REEA, CLEARand other organizations.
HREREC Termination Transition - Workand plan with HREREC the transition of theterminated contract as of June 1999.
Summary of Programs ForFiscal Year 2000:
Hawaii Condominium Bulletin - Develop,write, edit, print and distribute a quarterlybulletin to all registered AOAOs andregistered CMAs and provide onCommission’s website. Study feasibility ofproviding the bulletin through electronicmedium; including electronic distributionprior to hard copy distribution.
Post HREREC Contract TerminationAdministration - Administer with HRERECthe transition of the terminated contract asof June 1999.
Rule-Making - Chapter 107 - Study andevaluate Chapter 107 and HRS Chapter514A, for rule making, considerderegulation without reducing consumerprotection. Administer formal rule makingprocess. Research and update new projectregistration, AOAO registration, and CMAregistration.
Rule-Making - Chapter 53, Fees - Monitorand review services provided in relation tofees. Develop drafts of propose rules,assist in formal rule making process withLicensing Administrator.
Condominium Project and Developer’sPublic Reports - Administer registrationprogram. Evaluate the process, records,forms, information documents, rules;coordinate with other governmentalagencies, attorneys, etc., to ensure moreexpeditious processing and review time.Plan, develop and administer anylegislative amendments needed. Administerconsultant contracts. Study feasibility offinding other means of providing access todeveloper’s public reports. Considerfeasibility of including in Commission’swebpage a listing of projects with currentdeveloper’s public reports. Determinefeasibility of electronic administration
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including scanning of document on CDsand computerize tracking.
Condominium AssociationRegistration - Administer registrationprogram. Review and monitor program forimprovement including computer generatedregistration and reregistration forms withprevious responses. Develop a public listof all registered AOAOs for distribution andinclusion in Commission’s webpage.
Condominium Managing AgentRegistration - Administer registrationprogram. Review and monitor program forimprovement and problem resolutions withLicensing Branch. List all registered CMAsin Commission’s webpage and makepreprinted lists available upon request.
Condominium Hotel OperatorRegistration - Administer registrationprogram. Review and monitor program forimprovement and problem resolutions withLicensing Branch. List all registered CHOsin Commission’s webpage and makepreprinted lists available upon request.Study and determine sources to locateunregistered CHOs, and initiate initialcompliance through education. Developand distribute startup kits for CHOs, similarto CMAs.
Recodification of HRS Chapter 514A -Initiate the plan for recodification based onthe 1995 Commission’s report to theLegislature, “A Plan to Recodify Chapter514A, Hawaii Revised Statutes,Condominium Property Regime;” includerecommended legislation, budget, andcoordination of a special Commission taskforce.
Condominium Education Fund (CEF) -Administer fund. Prepare, maintain, andreview of budget, finance, and records forthe CEF. Prepare monthly and annualfinancial statements, budget, administer
fund investment. Plan and work withdepartment to increase budget for FY01 foradditional educational programs subject torevenue projections. See page 34.
Advice, Education, and Referral - Provideadvice, education, and referrals to thecondominium community, applicants,consumers, licensees, governmentofficials, organizations, and the public.Print and distribute copy of HRS Chapter514A to all registered AOAOs and CMAs.Study and report on the feasibility ofproviding information and advice ontelephonic prerecorded messages.Maintain and improve webpage.
Condominium Mediation and ArbitrationProgram - Administer mediation programs.Research, develop, and publish a brochureon dispute resolution, mediation, andarbitration including “trial de novo.”Coordinate joint complaint/mediationprogram with RICO. Study feasibility ofinitiating program in other neighbor islands.Continue condominium governancemediation arrangements with providers.
Meetings and Symposium - Plan,coordinate, and conduct monthly CRCmeetings. Include schedule of meetingsand agendas on Commission webpage.
Legislative Acts and Resolutions -Review and carry out responsibilities ofLegislative acts and resolutions, amendpublic copy of HRS Chapter 514A, providesummary of condominium and related actsand resolution for Commission/staff/bulletin, etc.
Government and LegislativeParticipation and Report - Research,develop and distribute annual report to theLegislature on CEF programs and funds;consider inclusion on the Commission’swebpage. Provide briefings to Legislatorsand staff; act as a resource. Attend
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hearings, provide written and oral testimonyon legislative bills, and bill tracking.Respond to elected officials, inquiries orcomplaints, request for information, etc.
Neighbor Island Outreach - Coordinateand conduct two CRC meetings at neighborisland sites with ERC and LRRC. Thisfiscal year the CRC meetings arescheduled for the islands of Maui andKauai. Study holding meetings incollaboration with local boards, HAR,condominium organizations, etc.
Interactive Participation withOrganizations - Active participation withHawaii, Pacific Rim, national andinternational organizations and governmentagencies for the exchange of informationand concerns, sharing of education andresearch efforts, joint projects of mutualconcern, training, etc. through attendance,membership and participation at local,regional, national, and internationalmeetings, including CAI, CAI Hawaii,HCAAO, HICCO, Condominium Council ofMaui, IREM, ARELLO, Hawaii State Bar,and Zenkauren (Japan).
Condominium Seminars - Produceseminars for the condominium communitythrough contracts with various providersthat provide for registration fee subsidiesfor apartment owners of registered AOAOs;encourage new providers. Continue toadminister CEF subsidies for Commissionapproved seminars including the following:“Minimize Your losses… Collections,Foreclosures and Bankruptcy;” “HiddenTreasures in your Annual Budget;” and“Anatomy of a Board Meeting.”
Condominium Specialists Office for theDay - Set up office at various neighborisland locations to meet and discusscondominium concerns. Consider andcollaborate arrangements in conjunctionwith a function of a condominium
organization and or at a condominiumorganization office.
Condominium Speakership Program -Honor requests for speaking engagementsfor some type of program concerning orrelated to condominium issues.
New Technology Program - Administer in-house and network computer system;including training, purchases, and DCCAand PVLD plans. Study feasibility of newtechnology in the storage, printing ofdeveloper’s public reports, registration andpublic information. AdministerCommission’s webpage with long rangeplan of including all condominiuminformation, forms, database, etc. plusonline registration.
Condominium Reference Library -Develop in Commission webpage a catalogof all public reference materials provided toState Libraries and at REB office. Developand maintain materials for a condominiumreference library at public libraries, REBoffice, mediation services offices andneighbor islands.
Start-up Kit for New AOAOs and NewCMAs - Distribute start-up kit to newregistered AOAOs, CMAs, and include theCHOs; including public copy of HRSChapter 514A, and rules, budget andreserves guide, board of directors guide,past condominium bulletins.
Cooperative Education, Research, andAdministrative Program - Participate inand sponsor cooperative educationresearch and administrative programs.
Division and Department Program -Coordinate activities and programs ofmutual concern with the PVLD, RICO andthe DCCA; including Director’s project onderegulation; review, analyze, andcoordinate positions on HRS Chapter 436B
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with PVLD and AG’s as it relates to HRSChapter 514A. Coordinate joint complaint/mediation program with RICO.
Records Management - Administer andorganize all records, reference materials,reports, minutes, legislation, rules, AGopinions, contracts, etc. with applicablelaws including the Uniform InformationPractices Act and Records Report System.Research options or alternative for recordsstorage and public information.
CPR Project Workshop and Meetings -Conduct periodic workshops forcondominium consultants for purposes oforientation and information.
Case Law Review Program - Monitor,collect and report on judgments anddecisions on Hawaii, federal, and otherstates’ court cases; report on governanceand development cases; material cases tobe considered for Condominium Bulletin.
Limited Equity Cooperatives - Developforms, procedures and process for LimitedEquity Cooperatives, HRS Chapter 421H,falling within the limited responsibility of theCommission.
Staff and Commissioners Development -Develop and train REB staff andCommissioners. Participate in trainingprovided by CAI, ARELLO, REEA, CLEARand other organizations.
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Licensees
For the first time since 1990, thenumber of new licenses issued increased.Overall, new licenses issued increased 21%with new individual broker licensesincreasing 39%, broker corporation,partnership, LLC licenses issued increasing32%, and salesperson licenses issuedincreasing 18%. See Table 3.
Typically, in a renewal year, the numberof licensees declines. In fiscal year 1999, arenewal year, the number of licensees was15% fewer than in 1998. See Chart 13 for ahistorical perspective on the number oflicensees.
Licen
sees
Table 3. Current Real Estate Licensees
Current Real Estate Licensees (August 1999) by License Type and Island
Oahu Hawaii Maui Kauai Molokai Lanai Other TotalActive
Broker 1,556 295 305 133 6 1 - 2,296Salesperson 2,673 561 757 349 15 4 - 4,359Sole Proprietor 849 128 96 39 4 0 - 1,116Corporation, Partnership, LLC 697 115 143 58 4 1 - 1,018
Total Active 5,775 1,099 1,301 579 29 6 8,789
Inactive
Broker 366 66 34 19 1 0 109 595Salesperson 2,292 381 360 202 3 2 349 3,589Corporation, Partnership, LLC 36 7 11 3 0 1 2 60
Total Inactive 2,694 454 405 224 4 3 460 4,244
Active and Inactive
Broker 1,922 361 339 152 7 1 109 2,891Salesperson 4,965 942 1,117 551 18 6 349 7,948Sole Proprietor 849 128 96 39 4 0 - 1,116Corporation, Partnership, LLC 733 122 154 61 4 2 2 1,078
Total 8,469 1,553 1,706 803 33 9 460 13,033
26L
icen
sees
FY FY % Change FY % ChangeLicense Type 1999 1998 from 1998 1990 from 1990Broker (individual) 92 66 39% 613 -85%Broker (Corp, Part, LLC) 58 44 32% 147 -61%Salesperson 651 553 18% 2,974 -78% Total 801 663 21% 3,734 -79%
New Real Estate Licenses Issued
19901991
19921993
19941995
19961997
19981999
0
500
1000
1500
2000
2500
3000
No
. o
f L
icen
ses Issu
ed
Fiscal Year
New Real Estate Licenses Issued
1990 - 1999
Broker (Corp, Part, LLC)
Broker (Individual)
Salesperson
Broker (Corp, Part, LLC) 147 144 95 95 61 94 86 76 44 58
Broker (Individual) 466 337 219 135 94 88 81 71 66 92
Salesperson 2,974 2,342 1,588 1,098 997 886 793 586 553 651
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Table 4. New Real Estate Licenses Issued
Chart 13. New Real Estate Licenses Issued
27
Re
al
Es
tate
Sa
les
pe
rso
ns
an
d B
rok
ers
0
5,0
00
10,0
00
15,0
00
20,0
00
25,0
00
30,0
00
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
End o
f F
iscal Y
ear
No. of Licensees
Corp
/Part
/LLC
Bro
kers
Sale
spers
ons
Chart 14. Real Estate Salespersons and Brokers
Licensees
28
Administrative ActionsThe Commission took disciplinary
action against 27 licensees in 1999. This wasa 36% decline from fiscal year 1998. Finestotaling $151,497 were assessed against 19licensees, 8 licenses were revoked, 2licensees were suspended for six monthseach, and other sanctions were orderedagainst 3 licensees. Of the 25 disciplinedlicensees, 6 were ordered to payrestitution totaling $12,346. Table 5summarizes the administrative actions andshows the types of activities involved inthe disciplinary cases.
In addition, four licenses weresuspended due to noncompliance with theChild Support Enforcement Agency’s orderof support or failure to comply with asubpoena or warrant relating to paternityor child support proceedings.
In 1999, two applicants appealedthe Commission’s denial of theirapplications. One individual was denied abroker experience certificate and one wasdenied a salesperson’s license. By
0
10
20
30
40
50
60
70
80
Fiscal Year
Disciplinary Actions 1990 - 1999
No. of Licensees 28 44 26 43 51 47 74 29 42 27
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Adm
inis
trat
ive
Act
ions
comparison, in 1998, five appeals were filed,and the Commission issued final orders inten appeal cases. In September 1998, theFirst Circuit Court upheld the Commission’sdenial of a license based on lack of “financialintegrity.”
No. of Licensees Disciplined - By Category
General Brokerage 6
Condominium Hotel Operator 5
Condominium Managing Agent 2
Property Management 7
Tax Obligations 7
Total 27
Licenses Revoked 8
Licenses Suspended 2
Licenses Fined 19
Total fines $151,497
Restitution Ordered 6
Total restitution ordered $12,346
Licenses Subject to Other Sanctions 3
FY 1999 Administrative Actions
Chart 15. Disciplinary Actions 1990 - 1999
Table 5. FY 1999 Administrative Actions
29
Regulated Industries Complaints Office(RICO)
The Regulated Industries ComplaintsOffice (RICO) receives, investigates, andprosecutes complaints against real estatelicensees for violations of laws and rules. Thenumber of complaints received by RICO hasbeen on a general decline since 1990. SeeChart 16. In 1999, there was a slight increasein the number of complaints received byRICO (from 140 in 1998 to 152 in 1999).
Of the 152 complaints, 61 have beenclosed. The closed cases included 6 that weremore appropriate for civil legal proceedings,
16 in which there was insufficient evidence ofviolations, 3 in which there was a finding thatno violation had occurred, 7 that wereresolved, and 27 that were closed with awarning letter issued.
Charts 17 and 18 show the number ofcases in which specific provisions of law orrule were violated or alleged to be violated.The violations found or admitted to werebased on disciplinary actions ordered by theCommission during the year. The allegationsin RICO complaints were based oncomplaints received by RICO during the year.
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
0
100
200
300
400
500
600
Fiscal Year
RICO Complaints - Real Estate
FY 1990 - 1999
Complaints 554 425 441 345 407 260 231 177 133 152
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Reg
ulated
Ind
ustries C
om
plain
ts Office
Chart 16. RICO Complaints FY 1990 - 1999
30R
egu
late
d In
du
stri
es C
om
pla
ints
Off
ice
0
5
10
15
20
25
30
3(a) 3(b) 3(d) 3(e) 3(f) 3(g) 3(j) 3(m) 3(n) 3(u) 3(v) 4 5 7 11 71
Rules Ch. 99
Complaints and Violations Found
Violations Found or Admitted Allegations in RICO Complaints
§16-99-3(a) Licensee shall fully protect thegeneral public in its real estatetransactions.
§16-99-3(b) Licensee shall protect the publicfrom fraud, misrepresentation, orunethical practices in the real estatefield.
§16-99-3(d) Licensee shall recommend that titlebe examined, survey be conducted,or legal counsel be obtained whenthe interest of either party requires it.
§16-99-3(e) Broker shall keep in special bankaccounts, separated from thebroker’s own funds, moneys coming into the broker’s possession in trustfor other persons.
§16-99-3(f) Licensee shall see that financialobligations and commitments are inwriting.
§16-99-3(g) Licensee shall not acquire propertywithout making the true positionknown in writing to the owner.
§16-99-3(j) Licensee shall transmit immediatelyall written offers to the listing broker.
§16-99-3(m) A principal broker or broker in chargeshall be immediately responsible forthe real estate operations conductedat the place of business.
§16-99-3(n) A broker shall maintain a place ofbusiness located in this state at abusiness address registered with thecommission from which the brokerconducts business and where thebroker’s books and records aremaintained.
§16-99-3(u) Licensee shall not add to or modifythe terms of an instrument withoutwritten consent.
§16-99-3(v) Licensee shall not convert otherpeople’s moneys to the licensee’sown use.
§16-99-4 Violation of client trust account rules.§16-99-5 Licensee shall file the licensee’s
address with the commission andshall notify the commission of anychange.
§16-99-7 Principal broker shall see to it that alllicensees are currently licensed at alltimes.
§16-99-11 Violation of advertising rules.§16-99-71 Real estate activities of each firm
shall be under the direct anagementand supervision of a principal broker.
Chart 17. Rules Ch. 99 Complaints and Violations
31
§467-7 License required to act as real estate broker orsalesperson.
§467-12 A real estate broker shall have and maintain adefinite place of business in the State.
§467-14(1) Making any misrepresentation concerningany real estate transaction.
§467-14(2) Making any false promises concerning anyreal estate transaction of a character likely tomislead another.
§467-14(3) Pursuing a continued and flagrant course ofmisrepresentation.
§467-14(4) Without first having obtained the writtenconsent to do so of both parties involved in areal estate transaction, acting for both theparties.
§467-14(6) Salesperson acting as a real estate broker.§467-14(7) Failing to account for moneys belonging to
others.§467-14(8) Conduct constituting fraudulent or dishonest
dealings.§467-14(10) Permitting a corporate officer or employee who
does not hold a real estate broker’s license tohave direct management of the brokeragebusiness.
§467-14(12) Licensee fails to obtain on the contract betweenthe parties to the real estate transactionconfirmation of who the real state brokerrepresents.
§467-14(13) Violating this chapter, chapters 484, 514A,514E, or 515, or section 516-71, or the rulesadopted pursuant thereto.
§467-14(15) Commingling the money or other property of thelicensee’s principal with the licensee’s own.
§467-14(16) Converting other people’s moneys to thelicensee’s own use.
§467-14(18) Failing to ascertain and disclose all materialfacts concerning every property for which thelicensee accepts the agency.
§467-14(20) Failure to maintain a reputation for or record ofcompetency, honesty, truthfulness, financialintegrity, and fair dealing.
§467-30 Registration, licenses, and bondingrequirements for condominium hotel operators.
§436B-16 Licensee shall provide written notice within thirtydays to the licensing authority of any judgment,award, disciplinary sanction, order, or otherdetermination, which adjudges or finds that thelicensee is civilly, criminally, or otherwise liable.
§436B-19(6) Aiding and abetting an unlicensed person todirectly or indirectly perform activities requiringa license.
§436B-19(7) Professional misconduct, incompetence, grossnegligence, or manifest incapacity in thepractice of the licensed profession or vocation.
§436B-19(8) Failure to maintain a record or history ofcompetency, trustworthiness, fair dealing, andfinancial integrity.
§436B-19(9) Conduct or practice contrary to recognizedstandards of ethics for the licensed professionor vocation.
§436B-19(12) Failure to comply, observe, or adhere to anylaw in a manner such that the licensingauthority deems the applicant or holder to bean unfit or improper person to hold a license.
§436B-19(16) Employing, utilizing, or attempting to employ orutilize at any time any person not licensed underthe licensing laws where licensure is required.
§436B-19(17) Violating this chapter, the applicable licensinglaws, or any rule or order of the licensingauthority.
Chart 18. HRS Ch. 467 and 436B Complaints and Violations
Regulated Industries C
omplaints O
ffice
0
5
10
15
20
25
30
35
40
45
50
46
7-7 12
14
(1)
14
(2)
14
(3)
14
(4)
14
(6)
14
(7)
14
(8)
14
(10
)
14
(12
)
14
(13
)
14
(15
)
14
(16
)
14
(18
)
14
(20
)
30
43
6B
-16
43
6B
-19
(6)
19
(7)
19
(8)
19
(9)
19
(12
)
19
(16
)
19
(17
)
HRS Ch. 467 and 436B
Complaints and Violations Found
Violations Found or Admitted Allegations in RICO Complaints
32
Real Estate Education Fund
Fiscal Year1995 1996 1997 1998 1999
Revenues
Fees $695,185 $68,895 $579,390 $55,880 $539,033
Investment Income 33,881 67,403 38,586 49,045 48,280
Total Revenues 729,066 136,298 617,976 104,925 587,313
Expenditures and Encumbrances 555,367 367,227 473,892 371,700 316,508
Excess (deficiency) of revenues $173,699 ($230,929) $144,084 ($266,775) $270,805
REVENUES AND EXPENDITURES AND ENCUMBRANCES 1995 - 1999
Rea
l Est
ate
Edu
catio
n Fu
nd
FUND BALANCEAs of June 30, 1999
(Unaudited)
ASSETS I. OPERATIONS
Cash Personnel $245,099
In State Treasury $430,888 Supplies 289
Short term cash investments 185,178 Postage 1,612
Investment securities (cost) 74,262 Equipment Rentals/Maintenance 4,800
Investment income due from Recovery Fund 29,116 Machinery and Equipment 2,408
Total Assets $719,444 Total Operations 254,208
LIABILITIES AND FUND BALANCE II. DIRECT LICENSEE EDUCATION
Liabilities Quarterly Bulletin/Annual Report 37,452
Payables $22,027 Research and Education Center 4,200
Fund Balance Neighbor Islands Outreach 1,185
Reserve for Encumbrances 31,416 Advice, Education, Referral 144
Unreserved 666,001 Programs 10,438
Total Fund Balance 697,417 Total Direct Licensee Education 53,419
Total Liabilities and Fund Balance $719,444
III. INDIRECT LICENSEE EDUCATION
REVENUES AND EXPENDITURES Interactive Participation w/Orgs. 4,351For the Year Ended June 30, 1999 Cooperative Ed., Res., Admin. Prog. 1,000
(Unaudited) Division and Department Programs 1,000 Staff Development 740
Revenues Dues & Subscriptions 245
Fees $539,033 Records Management 1,545
Interest 48,280 Total Indirect Licensee Education 8,881
Total Revenues 587,313
Expenditures 285,092 Total Expenditures and
Excess (deficiency) of revenues over expenditure 302,221 Encumbrances $316,508
Fund Balance
Beginning of Year 395,195
End of Year $697,416
FY 1999 EXPENDITURES AND ENCUMBRANCES(Unaudited)
33
ASSETS Case No. Licensee Amount
Cash Civ. 91-4210-12 Milagros C. Baradi 25,000 In State Treasury $173,489 Short term cash investments 258,343Investment securities (cost) 192,982 Total Assets $624,814
LIABILITIES AND FUND BALANCE
Liabilities Investment income due to Real Estate Education Fund $8,638Fund Balance Reserve for encumbrances 5,373 Unreserved 610,803 Total Fund Balance 616,176Total Liabilities and Fund Balance $624,814
FY 1999 RECOVERY FUND PAYMENTS
FUND BALANCE
As of June 30, 1999(Unaudited)
Real Estate Recovery Fund
Fiscal Year1995 1996 1997 1998 1999
Revenues $57,872 $55,191 $35,764 $38,202 $44,217Expenditures and Encumbrances Operations 4,820 13,960 Claims 0 105,554 35,971 145,000 33,060 Contract services 56,626 50,562 44,823 50,255 25,000Total Expenditures and Encumbrances 56,626 156,116 80,794 200,075 72,020Recoveries 1,181 -555 -64 48,745 0Excess (deficiency) of revenues over expenditures $2,427 ($101,480) ($45,094) ($113,128) ($27,803)
REVENUES AND EXPENDITURES AND ENCUMBRANCES 1995 - 1999
Real E
state Reco
very Fu
nd
34
Condominium Education Fund
Fiscal Year1995 1996 1997 1998 1999
Revenues Fees $267,716 $265,885 $565,060 $93,310 $535,580 Investment income 2,856 3,943 7,582 18,928 19,909 Total Revenues 270,572 269,828 572,642 112,238 555,489
Expenditures and Encumbrances 308,551 243,883 230,263 255,443 255,472Excess (deficiency) of revenues ($37,979) $25,945 $342,379 ($143,205) $300,017
REVENUES AND EXPENDITURES AND ENCUMBRANCES 1995 - 1999
Con
dom
iniu
m E
duca
tion
Fund
FUND BALANCE
As of June 30, 1999(Unaudited)
ASSETS Personnel $78,636 Supplies 5,333
Cash Postage 2,253 In State Treasury $754,586 Equipment Rentals/Maintenance 4,800 Short term cash investments 250,000 Research and Education Center 132,768 Total Assets $1,004,586 Education and Research 26,815
Equipment for Office 566 Staff/Commissioner Development 4,038 Resource Materials 83
Liabilities Dues & Subscriptions 180 Payables $14,846Fund Balance Total Expenditures and Encumbrances $255,472 Reserve for Encumbrances 18,864 Unreserved 970,876
Total Fund Balance 989,740
Total Liabilities and Fund Balance $1,004,586
Expenditures
Personnel $77,066REVENUES AND EXPENDITURES Supplies 7,500For the Year Ended June 30, 1999 Postage 7,000
(Unaudited) Equipment Rentals/Maintenance 12,000 Contingency 1,000
Revenues Education and Research 208,333 Fees $535,580 Equipment for Office 5,000 Interest 19,909 Staff/Commissioner Development 5,000 Total Revenues 555,489 Resource Materials 5,000Expenditures 236,608 Dues & Subscriptions 2,000Excess of revenues over expenditures 318,881 Miscellaneous 1,000Fund Balance Beginning of year 670,859 Total Expenditures $330,899 End of year $989,740
FY 2000 BUDGET
FY 1999 EXPENDITURES AND ENCUMBRANCES
(Unaudited)
LIABILITIES AND FUND BALANCE
35
FY
1999 Pro
gram
of W
ork
EDUCATION REVIEW COMMITTEE
Continuing Education 1999-2000 Core Course—Research and development of core course for1999-2000 license biennium.
Evaluation and Education System for CE andPrelicensing Instructors— In a collaboration withthe Hawaii Association of Realtors and HARES,continue to administer evaluation system ofprelicensing and continuing education instructors.
HREREC Interactive Program— Participation withCommission at neighbor island meetings.
Webpage— Maintain and improve HRERECwebpage through Internet.
Real Estate Hotline— Administer the HRERECdelivery system of real estate and condominiuminformation for neighbor island licensees utilizingthe WATTS line.
HREREC Administration— Administration ofprogram of work and budget, including contracts,budget, joint projects, contracted projects, andcoordination of activities.
Administration of Prelicense EducationProgram, Schools, and Instructors—Administration of prelicense school and instructors,applications, approval process, information,renewals, certification, records management,reevaluation, etc. Coordination of instructor’sexamination program.
Administration of Examinations— Administrationof real estate licensing examination programincluding contract administration with ASI,information, troubleshooting, review andamendments to application booklets, periodicreports, EXPro daily exams, etc.
Administration of Continuing EducationElective Courses— Provide administrativeinformation to elective course providers andlicensees, assist providers in submissions, reviewsubmission applications, review submittedcurriculum, make recommendations, and recordsmanagement.
Administration of Continuing Education Program,Providers, and Instructors— Administration ofcontinuing education program, providers, instructors,courses, information center, records management,etc. Research, development, printing, and distributionof quarterly School Files, a bulletin for educators; ajoint program with Prelicense Education Program
Real Estate Education Fund (REEF)— Maintenanceand review of budget, finance, and records for REEF;preparation of financial statements; preparation ofbudgets; administration of fund investment programsincluding contract administration and procurementcode management.
Annual Report and Quarterly Bulletin— Research,edit, printing, and distribution of annual report andquarterly bulletin.
Meetings and Symposium— Plan, coordinate, andconduct monthly Education Review Committeemeetings.
Advice, Education, and Referral— Provide advice,education, and referral to applicants, licensees,government officials, consumers, publicorganizations, etc.
Neighbor Island Outreach— Hold two ERCmeetings at selected neighbor island sites with CRCand LRRC meetings.
Interactive Participation with Organizations—Active participation with Hawaii, Pacific Rim, national,and international organizations and governmentagencies for the exchange of information andconcerns, sharing of educational and researchefforts, joint projects of mutual concern, training, etc.
Real Estate Seminars— Provide for a statewideseminar for real estate licensees and/or consumersthrough a contractor via subsidy, sponsoring,assisting, or cosponsoring.
Legislative Participation, Research, and Report—Research, participate, and/or report on any requestby the Legislature, including resolutions, agreements,and issues of mutual concern.
FY 1999 Program of Work
36
FY
199
9 P
rog
ram
of
Wo
rk
Real Estate Specialists of the Day— Real estatespecialists set up office on a neighbor island toprovide advice, education, and referral with advancedpublicity, mailouts, and appointments; upon request,provide training to RICO investigators.
Real Estate Speakership Program— Subject toState government approvals and priorities, honorrequest to provide a speaker, resource person, orparticipant in a function related to real estateeducation.
Instructor’s Development Workshop—Development, sponsoring, coordination, and/orproducing of instructor development workshops forprelicensing and continuing education instructors tomeet rule requirements.
Uniform Section Equivalency of PrelicensingExamination— Study the feasibility of recognizingand accepting the uniform section of ASI and/or ETSexams for candidates who have the uniform sectionof another state exam per Legislative Auditor’s report.
Prelicensing Education EquivalencyAdministration— Study and evaluate educationalrequirements of other States and jurisdictions incoordination with ARELLO.
Records Management— Evaluate, plan, reorganize,and implement a centralized, consistent, user friendly,computerized glossary of the existing and futurerecords and files.
Real Estate Reference Library— Subscribe andpurchase real estate reference materials for publicreview. Study and report on the feasibility of aprogram through the Hawaii State Library systemsimilar to the Condominium Review Committee’sprogram.
New Technology Program— Administration of in-house and network computer system, coordinationwith DCCA’s coordinator, training of staff, purchasesof hardware and software, programming, etc.
Information Distribution System— Research,development, and implementation of a centralizedinformation distribution system for all the educationproducts produced by the Commission and HREREC.
New Salesperson and new Broker Startup Kits—Package and distribute startup kits to newly licensedsalespersons.
Cooperative Education, Research, andAdministration Program— Actively participate andsponsor cooperative education, research andadministrative programs for those that provide director indirect services to Commission or are part of areal estate related program.
Division and Department Programs— Coordinateactivities and programs of mutual concern with PVLDand DCCA.
Staff and Commissioners Development—Development and training of staff and commissionersfor better administration of the real estate programs.
HREREC Termination Transition— Work and planwith HREREC on the transition of the termination ofcontract, included transfer of programs, referencematerials, equipment, and other issues on or beforeJune 1999.
Broker Curriculum and Resources—Transfer fromHREREC Chair; ERC focus group to review finalreport and materials, and make recommendations toERC.
LAWS AND RULES REVIEW COMMITTEE
Professional Responsibility Course— Independentstudy course on professional responsibility for use asa Commission option in disciplinary sanctions,restorations, and reinstatements.
Hawaii Real Estate Laws and Rules Manual—Research, develop and amend Hawaii Real EstateLaws and Rules Manual.
Real Estate Recovery Fund— Provide information,process and administer claims; coordinateresponsibilities with consultant attorneys; administerrecords management, financial reports, administerinvestment of funds; maintenance and review ofbudget, preparation of financial statements,preparation of budget.
Rule Making, Chapter 99— Study and evaluateChapter 99, HAR, and Chapter 467, HRS, forpossible rule making.
Rule Making, Chapter 53, Fees— Monitor andreview services provided in relation to fees charges,research/study, make recommendations, developdrafts, administer rule making, hearing, approval; incoordination with Licensing Administrator.
37
Real Estate Licensing and CertificationAdministration— Review and recommendamendments to licensure requirements to improveconsumer protection, or streamline the licensingprogram. Handle appeals for license/certification/registration denials.
Meetings and Symposium— Plan, coordinate, andconduct monthly LRRC meetings.
Advice, Education, and Referral— Provide advice,education, and referral to applicants, licensees,government officials, consumers, publicorganizations, etc., including research, reproduction,mailing, etc. Publish and distribute educational andinformational materials; provide educational materialsthrough Commission website. Maintain and improvewebpage through Internet.
Neighbor Island Outreach— Hold two LRRCmeetings on neighbor island sites with CRC andERC.
Legislative Acts and Resolutions— Reviewlegislative acts; publish and distribute Chapter 467public copy; develop summary briefing. Plan andimplement requirements of acts and resolutions.
Legislative and Government Participation—Coordinate with Administration; Provide briefings toLegislators and staff, act as resource to Legislators,draft language, draft committee reports, etc.Research, study, and draft written testimony on non-Commission bills; provide oral testimony at hearings,etc.
Interactive Participation with Organizations—Continue active participation with Hawaii, Pacific Rim,National, and International organizations andgovernment agencies for the exchange of informationand concerns, sharing of educational and researchefforts, joint projects of mutual concern, training, etc.
Review of Services and Organization— Analyzeand initiate steps to improve the services provided oramend processes without compromising consumerprotection, to streamline for effectiveness andefficiency, amendments to laws, amendments torules, amending forms, amending the system,staffing, equipment, reorganization, etc. Conducttraining sessions for Licensing Branch personnel.
Application Processing and Forms— Study andevaluate the processing of application forms, the wall
and pocket card license; evaluate and amend formsand instructions; assist in mainframe computerprogramming issues. Study and report on otherelectronic/computer methods to improve processingincluding additional uses of bar coding.
ARELLO National Disciplinary Action Data Bank—Continue participation in the ARELLO NationalDisciplinary Data Bank to assist in background reviewof applicants and assist in consumer protectionnationally.
License Renewal— Implement plan for 99/00renewal, research feasibility of moving distribution ofrenewal application forms to an earlier date.Distribute a list of all current real estate salespersonsto principal brokers, to update records at least sixmonths prior to renewal deadline.
Commissioners Education Program— Researchand draft amendments to Commission Workbook forCommissioners. Hold orientation sessions for newCommissioners and annual workshop for allCommissioners.
Division and Department Programs— Coordinateand work with PVLD/DCCA, and others on anyprogram of mutual concern, joint program with ERCand CRC.
HUD/ARELLO Fair Housing Agreement—Administer the terms of the agreement andcoordinate annual review by HUD officials.Participate with ARELLO Fair Housing Committeeand work with ARELLO on the terms of theagreement.
Case Law Review Program— Monitor, collect, andreport on case law, disciplinary actions, judgmentsand decisions on Hawaii court cases, federal courtcases, and other States court cases; material casesto be considered for Real Estate Bulletin. ReportHawaii cases to ARELLO annually.
FY 1999 P
rogram of W
ork
38
FY 2000 Program of WorkEDUCATION REVIEW COMMITTEE
Continuing Education 1999-2000 Core CourseEvaluation and Education System forContinuing Education and Prelicensing
InstructorsPost HREREC Contract Termination
AdministrationAdministration of Prelicense Education
Program, Schools, and InstructorsAdministration of ExaminationsAdministration of Continuing Education Elective
CoursesAdministration of Continuing Education
Program, Providers, and InstructorsReal Estate Education Fund (REEF)Annual Report and Quarterly BulletinMeetings and SymposiumAdvice, Education, and ReferralNeighbor Island OutreachInteractive Participation with OrganizationsReal Estate SeminarsLegislative Participation, Research and ReportReal Estate Specialist Office of the DayReal Estate Speakership ProgramInstructor’s Development WorkshopUniform Section Equivalency of Prelicense
ExaminationPrelicensing Education Equivalency
AdministrationRecords ManagementReal Estate Reference LibraryNew Technology Program and Commission
WebsiteInformation Distribution SystemNew Salesperson and New Broker Startup KitsCooperative Education, Research, and
Administration ProgramDivision and Department ProgramsStaff and Commissioners DevelopmentBroker Curriculum and Resources
LAWS AND RULES REVIEW COMMITTEE
Real Estate Recovery FundRule Making, Chapter 99Rule Making, Chapter 53, FeesReal Estate Licensing, Registration and
Certification AdministrationMeetings and SymposiumAdvice, Education, and ReferralNeighbor Island OutreachLegislative Acts and ResolutionsLegislative and Government ParticipationInteractive Participation with OrganizationsReview of Services and OrganizationsApplication Processing and FormsARELLO National Disciplinary Action Data
BankLicensing RenewalCommissioners Education ProgramDivision and Department ProgramsHUD/ARELLO Fair Housing AgreementCase Law Review Program
FY 2
000
Pro
gram
of W
ork
