REPORT TITLE:
Real Estate 


DESCRIPTION:
Codifies principal broker responsibilities.  Reorganizes
continuing education provisions into new section.  Directs HAR to
work with REC in developing legislation on consumer protection
and licensing issues.  (SD1) 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO REAL ESTATE BROKERS AND SALESPERSONS.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The purposes of this Act are to:
 
 2      (1)  Consider if consumer protection in real estate
 
 3           transactions in Hawaii is being compromised as
 
 4           indicated by the Association of Real Estate License Law
 
 5           Officials (ARELLO) which reported that Hawaii,
 
 6           requiring ten hours per two-year licensing period, is
 
 7           ranked forty-six out of forty-nine states for mandatory
 
 8           continuing education hours based on average hours per
 
 9           year of licensing period, with the number one ranked
 
10           state requiring thirty hours within a two-year
 
11           licensing period;
 
12      (2)  Reorganize all applicable continuing education
 
13           provisions, presently located in different sections,
 
14           into a new section for easier review and understanding;
 
15      (3)  Provide flexibility, additional options, and more
 
16           offerings of continuing education courses;
 
17      (4)  Codify the principal brokers' responsibilities in a new
 
18           section, including requirements for training and
 
19           educating associating real estate licensees; and
 

 
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 1      (5)  Direct the Hawaii Association of Realtors to convene a
 
 2           work study group and discuss continuing education and
 
 3           other administration issues with various parties, and
 
 4           submit any proposed consensus-derived legislation to
 
 5           the next legislative session.
 
 6      SECTION 2.  Chapter 467, Hawaii Revised Statutes, is amended
 
 7 by adding two new sections to be appropriately designated and to
 
 8 read as follows:
 
 9      "§467-    Principal brokers.  (a)  The principal broker
 
10 shall have direct management and supervision of the brokerage
 
11 firm and its real estate licensees.
 
12      (b)  The principal broker shall be responsible for:
 
13      (1)  Developing policies and procedures for the brokerage
 
14           firm concerning the handling of real estate
 
15           transactions and the conduct of the associating real
 
16           estate licensees and other staff, including education
 
17           and enforcement of the policies and procedures;
 
18      (2)  Ensuring that all associating real estate licensees are
 
19           provided information and training on the latest
 
20           amendments to real estate licensing laws and rules as
 
21           well as other related laws and rules;
 
22      (3)  The client trust accounts, disbursements from those
 
23           accounts, and the brokerage firm's accounting
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1           practices;
 
 2      (4)  The brokerage firm's records, contracts, and documents;
 
 3      (5)  All real estate contracts of the brokerage firm and its
 
 4           handling by the associating real estate salespersons;
 
 5      (6)  Establishing and maintaining a training program for all
 
 6           associating real estate licensees;
 
 7      (7)  Setting a policy on continuing education requirements
 
 8           for all associating real estate licensees in compliance
 
 9           with the statutory requirement;
 
10      (8)  Ensuring that the licenses of all associating real
 
11           estate licensees and the brokerage firm license are
 
12           current and active; and
 
13      (9)  Properly handling any commission application, real
 
14           estate license application, or renewal application that
 
15           the principal broker or the brokerage firm expressly
 
16           agrees to handle on behalf of the applicant, including
 
17           without limitation, verifying for completeness and
 
18           appropriate fees, and mailing or delivering the
 
19           appropriate documents to the commission by the required
 
20           deadline.
 
21      §467-    Continuing education.  (a)  The commission may set
 
22 requirements for continuing education providers, instructors, and
 
23 courses and determine whether the requirements have been met.
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1      (b)  Continuing education providers shall:
 
 2      (1)  Certify that instructors for its courses have met the
 
 3           commission requirements;
 
 4      (2)  Ensure that its instructors are competent in the
 
 5           subject matter of the course and current in knowledge
 
 6           of the subject matter; and
 
 7      (3)  Ensure that the curriculum for the course contains
 
 8           current information and the latest laws and rules, and
 
 9           amendments thereto.
 
10      (c)  Continuing education instructors shall ensure that they
 
11 instruct the course with current information and the latest laws
 
12 and rules, and amendments thereto.
 
13      (d)  Continuing education courses:
 
14      (1)  Shall have a curriculum level above the current minimal
 
15           competency entry level in any of the following areas:
 
16           (A)  Protection of the general public in real estate
 
17                transactions;
 
18           (B)  Consumer protection; or
 
19           (C)  Improvement of the licensee's competency and
 
20                professional standards and practice; and
 
21      (2)  Shall be:
 
22           (A)  Approved by the commission and delivered by an
 
23                instructor certified by an approved continuing
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1                education provider;
 
 2           (B)  A national course taught by a nationally certified
 
 3                instructor certified by, including but not limited
 
 4                to, the National Association of Realtors or its
 
 5                affiliates, the Building Owners and Managers
 
 6                Association, the Community Associations Institute,
 
 7                or any other national organization approved by the
 
 8                commission; or
 
 9           (C)  A continuing education course certified by the
 
10                Association of Real Estate License Law Officials;
 
11           provided that all continuing education courses shall be
 
12           offered by an approved continuing education provider;
 
13           and
 
14      (3)  Shall not require an examination.
 
15      (e)  The commission shall determine how many hours of a
 
16 continuing education course will be considered for credit to meet
 
17 the continuing education requirements for real estate licensees.
 
18      (f)  The commission may develop its own continuing education
 
19 courses or approve courses developed by others.
 
20      (g)  The commission may approve a mandatory core course or
 
21 courses or its equivalent for a licensing biennium.
 
22      (h)  Courses offered by alternative delivery methods with
 
23 interactive instructional techniques may be approved by the
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 commission.  Interactive instructional techniques may include but
 
 2 are not limited to:
 
 3      (1)  The opportunity for immediate exchange with an
 
 4           instructor; and
 
 5      (2)  Assessment and remediation through the assistance of
 
 6           computer, electronic, audio, or audiovisual interactive
 
 7           instruction designed to internally measure and evaluate
 
 8           whether students have mastered stated learning
 
 9           objectives."
 
10      SECTION 3.  Section 467-11.5, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "§467-11.5  Prerequisites for license renewal.(a)  Prior
 
13 to the license renewal of a real estate broker or real estate
 
14 salesperson, the licensee shall provide the commission with proof
 
15 of having attended ten hours of continuing education or its
 
16 equivalent as determined by the commission during the two-year
 
17 period preceding the application for renewal.  Failure to satisfy
 
18 the continuing education requirement by the license expiration
 
19 date shall result in the license being automatically placed on an
 
20 "inactive" status.
 
21      (b)  To reactivate a license which has been placed on an
 
22 "inactive" status, the licensee shall submit to the commission
 
23 proof of having satisfied the continuing education requirement of
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 this section, a complete application setting forth the
 
 2 information as may be prescribed or required by the commission,
 
 3 and payment of the proper fee.
 
 4      [(c)  Courses offered by alternative delivery methods with
 
 5 interactive instructional techniques may be approved by the
 
 6 commission.  Interactive instructional techniques may include but
 
 7 are not limited to:
 
 8      (1)  The opportunity for immediate exchange with an
 
 9           instructor; and
 
10      (2)  Assessment and remediation through the assistance of
 
11           computer, electronic, audio, or audiovisual interactive
 
12           instruction designed to internally measure and evaluate
 
13           whether students have mastered stated learning
 
14           objectives.
 
15      (d)] (c)  No license shall be renewed if the license trade
 
16 name, partnership, or corporation is not currently registered
 
17 with the department of commerce and consumer affairs."
 
18      SECTION 4.  Section 467-1, Hawaii Revised Statutes, is
 
19 amended by deleting the definition of "continuing education".
 
20      [""Continuing education" means a course:
 
21      (1)  With a curriculum level above the current minimal
 
22           competency entry level in any of the following areas:
 
23           (A)  Protection of the general public in its real
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1                estate transactions;
 
 2           (B)  Consumer protection; or
 
 3           (C)  Improvement of the licensee's competency and
 
 4                professional standards and practice; and
 
 5      (2)  That is:
 
 6           (A)  Approved by the commission and delivered by an
 
 7                approved continuing education instructor;
 
 8           (B)  A national course taught by a nationally certified
 
 9                instructor certified by the National Association
 
10                of Realtors or its affiliates; or
 
11           (C)  A national course taught by a nationally certified
 
12                instructor certified by, including but not limited
 
13                to, the Building Owners and Managers Association,
 
14                the Community Associations Institute, or other
 
15                national organization approved by the commission;
 
16 provided that the continuing education course is offered by an
 
17 approved continuing education provider.  Continuing education
 
18 courses shall not require an examination."]
 
19      SECTION 5.  The Hawaii Association of Realtors shall
 
20 initiate a work study group during the legislative interim to
 
21 discuss continuing education and administration issues with the
 
22 real estate commission, the department of commerce and consumer
 
23 affairs, and other interested parties.  The work study group
 

 
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                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 shall submit its consensus recommendations on proposed
 
 2 legislation to address consumer protection and licensee concerns
 
 3 to the legislature not later than twenty days prior to the
 
 4 convening of the 2000 regular session.
 
 5      SECTION 6.  Statutory material to be repealed is bracketed.
 
 6 New statutory material is underscored.
 
 7      SECTION 7.  This Act shall take effect upon its approval.