swat changes to title 16, chapter 99, hawaii...

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SWAT Changes toTitle 16, Chapter 99, Hawaii Administrative Rules

Real Estate Brokers and Salespersons

On March 29, 2001, the Real Estate Commission held a public hearing on the proposed ruleschanges. The public hearing was designed to hear all persons interested in the proposedamendments to Title 16, Chapter 99, Hawaii Administrative Rules ("HAR"), entitled "Real EstateBrokers and Salespersons.” These proposed rules are the product of a collaborative effort betweenthe Department of Commerce and Consumer Affairs, the Real Estate Commission, and the realestate industry. These groups reviewed rules pursuant to a SWAT (Slice Waste and Tape) initiativeof Lt. Governor Mazie Hirono to eliminate null and void or unnecessary rules, and reduce regulatoryburdens on real estate licensees.

On May 9, 2001, Governor Benjamin Cayetano signed the rules for adoption. The 10-daystatutory wait period ended on May 20, 2001. On May 21, 2001, the amendments to Title 16,Chapter 99, Hawaii Administrative Rules ("HAR"), entitled "Real Estate Brokers and Salespersons”became effective.

The following is a short summary of the amendments. Grammatical and punctuation changeswere made throughout the proposed rules.

Section Number& Title

Amendment Why change made

Subchapter 1:GeneralProvisionsSection 16-99-2Definitions

“Branch office” (1) todelete the reference to“site office” and (2) tochange the branch officelicense requirement1.

• Amended to apply only to offices located onan island different from the island on whichthe principal place of business is located, andto require that only one branch office must beregistered per island.

• Additional offices located on the same islandas a principal place of business or branchoffice may be operated without registration.

• Further, branch office registration is notrequired for places of business from which nogeneral brokerage activities are conducted,but where real estate activities are conductedexclusively relative to condominium projects,subdivisions, single developer developments,time share projects, shopping centers andother commercial buildings.

• The substantive changes will cure theimbalance between the public benefit of officeregistration and licensing compared to thecost and time to monitor compliance, and willpermit the industry to be accountable with itsown standards.

1 Amends Hawaii Revised Statutes (HRS) section 467-12 by eliminating site office registrations andchanging branch office licensing to a registration requirement to implement Act 240 (SLH 1999)

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“Brokerage firm” or “firm” • Adds clarification and consistent terminologythroughout chapter 16-99 regarding brokerlicensees that operate as sole proprietors or asentities.

“Broker in charge” • Allows the registration of multiple brokers incharge for a brokerage firm, registered withthe principal place of business.

• Allows the principal broker, without notifyingthe commission, to determine the officelocations (branch, principal, or unregisteredoffices) at which those brokers in charge maybe assigned to work, provided that eachbranch office shall have at least one broker incharge.

• Language is clarified that a broker in chargemust be an individual broker licensee andmay not be an entity.

• The substantive changes will minimize thedisproportionate impact on a principal broker(or a solitary broker in charge) by allowingdesignation of additional brokers in chargethat may share responsibilities.

“Broker-salesperson” • Clarifies that a broker-salesperson means anindividual licensee and not an entity.

“Franchise,”“Franchise fee,”“Franchisee,” and“Franchisor”

• Deletes since the definitions are notnecessary.

“Inactive” • Removes the requirement that a licenseesurrender his license certificate and licenseidentification card when a license is placed oninactive status.

• Deletes the incorrect reference toreinstatement of an inactive license (sincesuch licenses are re-activated and suspendedlicenses are reinstated).

• Not requiring inactive licensees to return indiciaof licensing will correct the imbalance betweenthe public benefit compared to the cost andtime to monitor compliance.

“Involuntary inactive” • Clarifies the language consistency throughoutchapter 16-99.

“Licensee” • Clarifies the language for consistencythroughout chapter 16-99.

• Provides consistent use of the terms “person”2

and “individual.” 2 Defined in section 1-19, HRS to include both entities and individuals.

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“Place of business” • Clarifies that each brokerage firm shall haveone principal place of business and that homeoccupation offices are permitted provided theycomply with the zoning code and anyapplicable declaration, bylaws, house rules,recorded restrictions or covenants.

• Clarifies the language for consistencythroughout chapter 16-99, particularly the useof the term “brokerage firm.”

“Principal broker3,”“Site office4”

• Deletes since the definition is unnecessary andduplicative in chapter 16-99.

“Wall certificate” • Clarifies that wall certificates are issued toentities, as well as to individual licensees.

• Provides consistent language throughoutchapter 16-99, particularly the use of the term“person”5.

Section 16-99-3Conduct

“Broker in charge” • Provides consistent spelling of the term thatreplaces “broker-in-charge” throughout chapter16-99.

Subsection (f) • Deletes the requirement that the principalbroker or broker in charge review all real estatecontracts, to allow for delegation of that task atthe discretion of the principal broker, with theprincipal broker, nonetheless, remainingresponsible under section 467-1.6, HRS.

• This change allows the principal broker greaterflexibility in developing policies and proceduresfor handling the real estate transactions of thebrokerage firm without unnecessary regulation.

Subsection (m) • Clarifies that a principal place of businessmust have a principal broker or one or morebrokers in charge, or both, that areimmediately responsibility for the real estateoperations.

• Further, that a branch office must have one ormore brokers in charge that are immediatelyresponsibility for the real estate operationsconducted there.

• Allows multiple brokers in charge to beassigned to work at the principal place ofbusiness or branch office.

3 This definition already appears in section 467-1.6, HRS4 Amends HRS section 467-12 by eliminating site office registrations through implementation of Act 240(SLH 1999)5 Defined by section 1-19, HRS.

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Subsection (n) • To clarify that a principal place of businessshall be maintained at a registered location inthis State.

Subsection (o) • To increase from fourteen (14) days to thirty(30) days the period of time a principal brokeror broker in charge may be absent from theprincipal place of business before beingrequired to designate a temporary principalbroker or temporary broker in charge.

• Removes the requirement that a temporarybroker be designated, provided that anotherbroker in charge already is registered with thatprincipal place of business.

• Removes reference to designating a temporarybroker in charge for a branch office, since allbrokers in charge will be registered with theprincipal place of business.

• Pursuant to section 16-99-2 “Broker in charge,”it is the responsibility of the principal broker toensure that each branch office has at least onebroker in charge at its location.

• These amendments remove unnecessaryrequirements and cure the imbalance betweenpublic benefit and the cost and time to monitorcompliance.

Subsection (q) • Eliminates the reference to documentaryevidence of real estate transactionalexperience (as part of the broker experiencerequirement)6.

• By adding the current requirement that theexperience certification statement attest to thelength of full-time employment or association.

• Allows a broker in charge to sign theexperience certification statement.

16-99-3.1Disclosure ofagency

Entire section • Provides consistent language throughoutchapter 16-99, particularly the use of the term“brokerage firm.”

• Provides consistent language throughoutchapter 16-99, particularly the use of the term“time share” instead of “timeshare.7”

6 Amends HRS section 467-9.5 that does not require evidence of such transactions to be consistent with Act240 (SLH 1999).7 Amended to conform to the language of chapter 514E, HRS.

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16-99-4Client's account;trust funds;properties otherthan funds

Subsection (c) • Clarifies that client trust funds shall not becommingled with funds belonging to thebrokerage firm.

Subsection (e) and (f) • Deletes the unnecessary and redundantphrase “of Hawaii.”

Subsection (g) • Replaces “broker salesperson” with “broker-salesperson” to provide consistency oflanguage throughout chapter 16-99.

Subsection (h) • Clarifies that a broker in charge may handleclient’s funds, and so shall be responsible, likethe principal broker, to prevent commingling.

Subsection (i) • Clarifies that a broker in charge mayauthorize someone else to handle theplacement of trust properties (although thebroker in charge also will remain responsiblefor those trust properties).

• Clarifies that the references to a“salesperson” also include a salesperson thatholds a broker’s license, otherwise known as“broker-salesperson.”

• Clarifies in the final sentence that thereference to “broker” includes both the“principal broker” and the “broker in charge,”as the case may be.

Subsection (j) • Clarifies that a principal broker may allow abroker in charge to handle client’s funds, andso the broker in charge shall be responsible,like the principal broker, not to allow someoneelse to have custody or control of the funds,except as provided in chapter 467, HRS, andthis chapter.

Subsection (k) • Allows a principal broker to allow any of thebrokerage firm’s brokers in charge to havecustody and control of trust properties,regardless of whether the particular broker incharge is assigned to work at a branch office,the principal place of business, or otheroffice.

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16-99-5Notification andfiling of names,addresses, andchanges

Subsections (a) and (b) • Clarifies that the notification requirements aredifferent for individual licensees and brokeragefirms, and reflecting the new definition of“Broker in charge.”

• Allows registration of multiple brokers in chargewith the principal place of business, who maybe assigned to any place of business of thebrokerage firm, without commissionnotification.

• Deletes the requirements of notification of thename and license number of the broker incharge of a branch office and notification of theparticular office in which each licensee isengaged.

• Removes unnecessary regulation and permitsa principal broker to make personnelassignments with greater flexibility.

Subsection (b) • Clarifies that a brokerage firm may be a limitedliability company.

Subsection (c) • Clarifies the notification responsibilities of theprincipal broker or broker in charge when theprincipal place of business or branch officecloses.

Subsection (f) • Deleted to recognize that the real estatelicense is a statewide license and to removethe prohibition of licensees working for abrokerage firm on a different island from theirresidence.

Former subsection (g) • Allows a licensee who resides out-of-state or inanother country to retain an active Hawaii realestate license, provided that the licensee’sassociating principal broker or broker in chargeshall be subject to receipt of service of processon the licensee’s behalf.

Former subsection (h) • Conforms to current commission policy andpractice regarding the effective date ofchanges submitted by licensees to thecommission.

New subsection (h) • Allows any broker in charge of a brokeragefirm, as well as the principal broker, to sign achange form submitted to the commission.

New subsection (i) • Clarifies that failure to submit a requirednotification of a change within the allowed tenday period will subject a licensee to discipline(as provided in section 16-99-3(w)).

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16-99-5.1Involuntaryinactive licensestatus

Subsection (a)(6) • Deletes the reference to changing residence toanother island.

• Recognizes the statewide license as describedat section 16-99-5, above, and section 16-99-5.2, below, herein.

• Adds a reference to section 16-99-3(o)’srequirement that a temporary principal brokeror broker in charge must be designated inorder for associated licensees to retain activestatus if the principal broker is away from thebusiness for more than thirty days.

• Adds a reference to conform to current practiceand policy, which allows appointment of atemporary broker in charge (not just atemporary principal broker), to replace anabsent principal broker.

Subsection (b) • Conforms to the new definition of “broker incharge.”8

• Recognizes that all individual licensees will beregistered with the principal place of business.

• Reflects that involuntary inactive license statuswill not occur due to the license status orabsence of the broker in charge of a branchoffice.9

Subsection (c) • Allows any registered broker in charge to placea licensee on involuntary inactive status.

16-99-5.2Statewidelicense

New section • Provides that a real estate license is astatewide license, so that a licensee’s island ofresidence is not a bar to working with abrokerage firm with a place of business orbranch office on a different island, providedthat the principal broker and licensee complywith the specified supervisory, place ofbusiness, advertising, disclosure, and clientcommunication provisions.

• This amendment seeks to cure the imbalancebetween the public benefit and the time andcost spent on compliance, and will provide amore effective and efficient regulatoryalternative.

16-99-6Display oflicense

Entire section • Deletes the requirement that each individuallicensee display the license at the place ofbusiness.10

8 Described at section 16-99-2 ”Broker in charge.”9 The subsection is amended since the broker in charge of a branch office (and licensees working there) willnot be registered at that particular office, but will be registered with the principal place of business.10 Conforms the rule to Act 240 (SLH 1999), which amends section 467-12, HRS.

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• Deletes as unnecessary the requirement that alicensee carry a current license identificationcard at all times.

• Clarifies that section 467-12, HRS, requiringdisplay of the real estate “broker’s license”means the license of the “brokerage firm,” andclarifies that the license shall be displayed atthe principal place of business.

16-99-7Renewal oflicense

Entire section • Requires completed license renewal on orbefore the commission prescribed deadline,instead of the December 31 license expirationdate of an even-numbered year.11

16-99-8Restoration offorfeited license

Repealed12 •

16-99-9Reinstatementof suspendedlicense

Entire section • Amends the heading to clarify the language tomore accurately reflect the substance of theamended section.

• Deletes the first two sentences asunnecessary, since the final order ofsuspension must expressly recite specificreinstatement.13

• Two sentences are added to clarify thecommission’s right to suspend a license andthat reinstatement must comply with section92-17(c)(3), HRS.

16-99-10Revoked license

Entire section • Deletes the unnecessary and incorrectreference to an experience requirement14.

16-99-10.6Surrender of realestate license

Entire section • Corrects a misspelling, to make a punctuationcorrection, and to delete unnecessarylanguage.

16-99-11Advertisement

Subsections (a) through(f)

• Allows a licensee to abbreviate the corporatename.

• Allows an individual licensee greater flexibilityin choosing a license name other than the legalname, and permit advertising to omit aregistered trade name or to include only aregistered trade name.

11 Implements Act 240 (SLH 1999), which amends section 467-11, HRS.12 Conforms to Act 240 (SLH 1999), which amends section 467-11, HRS, by establishing new restorationrequirements that supersede and make null and void the provisions of this rule section.13 Section 92-17(c)(3), HRS, sets forth license reinstatement requirements, and section 436B-14, HRS, setsforth restoration requirements for a person whose license has forfeited for failure to timely apply forreinstatement.14 Section 467-15.5, HRS, requires that revoked licensees must start over as salespersons, even if theypreviously held a broker’s license, and there is no experience requirement for the salesperson level oflicense.

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• This amendment seeks to clarify the confusionin looking up the different corporate laws forthe different corporate entities.

Subsections (b) and (f) • Deletes and removes the requirement that abrokerage firm named in an advertisementmust identify the brokerage firm as a “broker”(“B”) or “Realtor” (“R”) and to clarify that onlyindividual licensees must include suchdesignations.

Former subsection (e) isrenumbered as (d)

• Deletes the requirement that advertisementsregarding fee simple property must identify theproperty as such.

• Deletes the option of advertising leaseholdproperty with the designation of “(L)” andrequires such advertisements to use the word“leasehold,” instead.

• By requiring only leasehold property to be soidentified, the amended rule makesadvertisement consistent with currentcircumstances and needs of the industry, whilemaintaining appropriate consumer protectiondisclosures.

Former subsection (d) • Deletes and replaced with new subsection (c),to clarify the language for better understanding.

Subsections (g) and (h) • Removes the advertising requirements specificto franchise operations, as obsolete andunnecessary.

Subsection (i) isrenumbered assubsection (f)

• Removes the requirement that the telephonenumber of a registered place of business beincluded in any advertisement that includesany other telephone number.

16-99-12Exam sitesolicitation

Entire section • Clarifies that only individual licensees takeexaminations.

Subchapter 2Applications19-99-17Forms andinstructions

Entire section • Replaces “non-refundable” with“nonrefundable” to provide consistent languagethroughout chapter 16-99. This change ismade throughout chapter 16-99 forconsistency and affects section 16-99-24.

16-99-18Examinationapplication

Repealed • Obsolete and no longer consistent with currentpractice, in that there is no formal applicationfor examination.

16-99-19Licensesapplications

Subsection (a) • Clarifies the language and corrects thegrammar.

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Subsections (a)(1) and (b) • Deletes the requirement that licenseapplications be submitted fifteen days prior to acommission meeting, since the requirement isnot necessary.

Subsection (a)(2) • Obsolete and not consistent with currentpractice and policy.15

Former subsection (3) isrenumbered as section (2)

• Clarifies that certain applications (i.e., brokerapplications) must include supportingdocuments regarding experience requirementsand that applicants who have received aneducation equivalency (formerly described as awaiver) must also submit the educationequivalency certificate as a supportingdocument.

• Rule now consistent with current practice andpolicy.

Subsection (b) • Changes the branch office license requirementto a registration requirement.16

16-99-19.1License name

New section • Implements the policy adopted by thecommission in its February 25, 2000memorandum titled “Decisions on Legal andLicense Names and Advertising.”

• Allows an individual licensee greater flexibilityin choosing a license name that is differentfrom the legal name.

• Clarifies that a licensee’s legal surname mustbe used.

• Clarifies that the license name of a corporation,limited liability company, or partnership mustbe in the legal name and may include aregistered trade name.

16-99-19.2Experiencecertificateapplication

• Changes the requirements a licensee mustmeet in order to satisfy the experiencerequirements to sit for the broker’s licenseexamination.17

16-99-24Certification ofexperience

Repealed • Obsolete broker experience requirements.18

• New section 16-99-19.2 has replaced thissection and incorporated any non-obsoleteprovisions.

15 Statutory authority (in chapter 436B, HRS) was repealed.16 Conforms with Act 240 (SLH 1999)17 Implements Act 240 (SLH 1999), amending section 467-9.5, HRS18 Implements Act 240 (SLH 1999), which amends section 467-9.5, HRS, changing the requirements alicensee must meet in order to satisfy the experience requirements to sit for the broker’s license examination.

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16-99-25Falsification ofapplication

Entire section • Consistency of language throughout chapter16-99, regarding the application (not“request”) for experience certificate.

Subchapter 3Examination16-99-29Examination forbroker andsalespersonlicense

Subsection (a) • Eliminates the requirement that theexamination be a written examination.

• Conforms the subsection consistent withcurrent practice and policy, since theexamination is currently administered byelectronic means.

• Removes the requirement that each part of theexamination be passed at the same time, andproviding, instead, a two-year period duringwhich an individual may pass separateportions of the examination on differentoccasions.

Subsection (d) • Deletes the requirement that the examinationbe taken in the State, and permitting theexamination to be taken at other locations asdetermined by the commission and its testingservice.

• Deletes the reference to alternative testingdates for religious reasons, since theexamination is offered within the State on eachday of the week except Mondays andTuesday, the reference is unnecessary.

Subsection (f) • Deletes the requirement that a licenseapplication be submitted within ninety (90)days after passing the examination.

• Provides that the license application must besubmitted within two years of the individual’slast examination date. (“Last examinationdate” is a reference to the fact that anindividual may pass different parts of theexamination on different examination dates,pursuant to amended subsection (a).)

Subsection (g) • Clarifies and conforms to current practice andpolicy that the experience certificate be currentand must be presented at the examinationlocation.

• Changes the education “waiver” to education“equivalency” certificate, to conform to currentpractice and policy and to provide consistentterminology throughout chapter 16-99, andaffects section 16-99-37.

16-99-30Examinationsubject matter

“Applicants” to read“candidates”

• Consistent use of language throughout chapter16-99.

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Subchapter 4Education andExperience16-99-36Educationrequirement

Entire section • Deletes, as obsolete, the reference to aminimum of forty class hours of education forthe salesperson requirement, and replaces it toaccurately reflect current practice and policy,whereby the current required course consistsof forty-five class hours.

16-99-37Education waiver

Heading language andsection language

• Replaces the term “waiver” with the term“equivalency,” which more accuratelydescribes the subject of the section and therelated policy of the commission.

Subsection (a)(3) • Clarifies that an associate of arts or associateof science degree does not qualify, and to addbusiness as a qualifying major.

Subsection (a)(4) • Reduces the number of qualifying semestercredits from twelve to six, and to add four morequalifying subject areas, including business,business law, real estate development andfinance.

Subsection (b) • Removes the limitation that an applicant coulduse each basis for education equivalency onlyonce, for taking either the salesperson orbroker examination.

• Allows the same basis to be used to qualify foreducation equivalencies for both examinations.

Subsection (c) • Increases from one year to two years the timeduring which an education equivalencycertificate remains valid.

16-99-38Experiencerequirement



16-99-39Equivalentexperience



19 Implements Act 240 (SLH 1999), which amends 467-9.5, HRS, changing the requirements a licensee mustmeet in order to satisfy the experience requirements to sit for the broker’s license examination.20 Implements Act 240 (SLH 1999), which amend 467-9.5, HRS, changing the requirements a licensee mustmeet in order to satisfy the experience requirements to sit for the broker’s license examination.

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Subchapter 5Registered RealEstate Schools16-99-52Home studycourses

Repealed • Unnecessary and overly burdensomeprovisions, and thereby deleting requirementsfor: a minimum of ten contact hours andapproval based only on hardship and unusualcircumstances where a student is unable toattend a course during a six month period.

• A new section, 16-99-52.1, is added to providefor more effective, efficient, and flexiblealternatives for independent study.

16-99-52.1Independentstudy course

New Section • Establishes more flexible provisions forindependent study course and to provide amore effective alternative to meet the needs ofstudents and schools.

16-99-53Application forregistration

Subsection (g) • Requires completed license renewal on orbefore the commission prescribed deadline,instead of the December 31 license expirationdate of an even-numbered year.21

16-99-53.1Alternative formsof school bond

Subsections (a) and (b) • Deletes the unnecessary phrase “real estate.”

Subsection (a)(1) • Deletes “located in this State.”Subsections (a)(2) and (b) • Replaces “federally-insured” with “federally

insured” to provide consistent languagethroughout chapter 16-99.

16-99-58Faculty

Subsection (c) • Changes “pre-license” to “prelicense,” toprovide consistent language throughoutchapter 16-99.

16-99-60Books andsupplies

Repealed • Unnecessary and cures an imbalance betweenthe public benefit and cost and time spent oncompliance.

16-99-61Certificate ofcompletion

Entire section • Extends from one year to two years the timeperiod during which a school completioncertificate shall be valid, allowing issuance of aschool completion certificate for completion ofan independent study course withoutattendance of scheduled classes.

• Clarifies that a passing grade means passingthe final examination

16-99-65Renewals

Subsection (a) • Requires completed license renewal on orbefore the commission prescribed deadline,instead of the December 31 license expirationdate of an even-numbered year.22

21 Implements Act 240 (SLH 1999), which amends section 467-11, HRS, requiring completed license renewalon or before the commission prescribed deadline.22 Implement Act 240 (SLH 1999), which amends section 467-11, HRS, requiring completed license renewalon or before the commission prescribed deadline.

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16-99-71Directmanagement andsupervision ofreal estateactivities

Repealed • Unnecessary rule.23

Subchapter 7Recovery Fund16-99-79Recovery fundsettlementprocedures

Paragraph (5) • Changes the term “licensee” instead of“individual’s” because the section could applyto a brokerage firm, as well as to an individual.

Subchapter 9ContinuingEducation16-99-87Definitions

“Beyond professionalentry”

• Clarifies the requirement that continuingeducation courses exceed minimum entry levelcompetency.24

“Certified” • Requires that continuing education providerscertify to the commission that instructors havemet the commission requirements;previously, the commission certified theinstructors. This deletion of a reference to acertified instructor is made throughoutchapter 16-99 for consistency.25

“Clock hours” • Clarifies which times are excluded and toremove the references to testing.26

“Core” course • Clarification“Continuing education” • Clarifies the definition and purpose of

continuing education.27

“Course and courseoffering”

• Conforms to current policy and practice byreducing the minimum required module ofcontinuing education to three hours, instead ofthree and one-third hours.

“Elective” • Clarifies that the term may apply to either acourse or a course offering and to clarify thelanguage.

23 Superseded by Act 47 (SLH 1999), which adds section 467-1.6, HRS, statutorily establishing the principalbroker responsibilities.24 Conform the language to that of Act 47 (SLH 1999), which adds section 467-4.5, HRS.25 Conform to Act 47 (SLH 1999), which adds section 467-4.5, HRS, deleting reference to certifiedinstructor.26 Conform to Act 47 (SLH 1999), which adds section 467-4.5, HRS, provides that continuing educationcourses shall not include an examination.27 Conform the language to that of Act 47 (SLH 1999), adding section 467-4.5, HRS, clarifying thedefinition and purpose of continuing education.

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16-99-88Continuingeducationimplementation

Repealed • Obsolete provisions for past implementation ofcontinuing education requirements.

16-99-89Equivalentcontinuingeducation

Subsection (a) • Defines continuing education.28

Former paragraphs (3)through (5)

• Deletes paragraph (3) as unnecessary andincorrectly refer to a ten-hour course minimum.

• Deletes paragraphs (4) and (5) as obsoletereferences to initial implementation.

New paragraph (3) • Allows an equivalency for courses which donot meet all of the requirements of section 16-99-100 (particularly the requirement thatcourses be offered by a registered Hawaiiprovider) so long as the courses are takenoutside the State and are certified by certainnational organizations.

Subsection (b) • Deletes the requirement for demonstrating byan objective method that the licensee haslearned the course information.

• Lessen the burden for obtaining anequivalency.

Subsection c • Adds a commission-determined equivalency tothe ten hours of continuing education.29

• The added equivalency will allow licenseeswho obtain a Hawaii salesperson licenseduring the year immediately prior to licenserenewal to renew the license withoutcompleting ten hours of continuing education.

• The amendment seeks to cure the imbalancebetween the public benefit and the cost andtime spent on compliance and will cure theunequal treatment of new licensees.

16-99-90License renewalprocedure

Entire section • Clarifies that only individual licensees arerequired to complete continuing educationcourses, that a mandatory core course must becompleted if one is specified by thecommission for the particular license renewalperiod, and that course completion must occurbefore a commission prescribed deadline.

• Deletes requirement that course certificates besubmitted with the renewal application.

• Adds a reference to submission by the provider 28 Conform to Act 47 (SLH 1999), which adds a reference to section 467-4.5, HRS.29 Required by section 467-11.5, HRS.

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of evidence of the licensee’s coursecompletion, since current commission policyand practice is to rely upon the providers tosubmit the evidence by an electronic method.

16-99-91Activating aninactive realestate license

Entire section • Clarifies that only individual licensees arerequired to complete continuing educationcourses.

16-99-92Continuingeducation hoursin licenserestoration andreinstatementcases

Entire section • Clarifies that completion of continuingeducation is required for “active” status inrestoration and reinstatement cases (asopposed to “inactive” status) except where thecommission determines an equivalent.

• Conforms to current policy and practice thatthe commissions not impose additionalconditions for restoration and reinstatementthat are not pursuant to chapter 16-99, chapter467, HRS, or the order of suspension.

16-99-99Application forregistration as acontinuingeducationprovider

Entire section • Deletes reference to term “processing fee,”and replacing the references with the correctterm, “application fee,” as used in chapter 16-53.

Subsection (a) • Deletes both the unnecessary reference to the“formation” of the course offering and theobsolete reference to the initial setting of fees,replacing the latter by adding a currentreference to fees provided in rules adoptedpursuant to chapter 91, HRS.

• Deletes the requirement of submission of anapplication forty-five (45) days prior to a courseoffering, since current practice and policy donot enforce the requirement.

Former paragraphs fromsubsection (a): (3), (4),(5), (6), (8), (9), (11),(12), (13), (16), (17),(18), (19), (20), (21),(22), (23), (24), and (25)

• Repeal provisions as unnecessary and seeksto cure the imbalance between the publicbenefit and the cost and time spent oncompliance.

Paragraph (1) • Clarifies for better understanding and conformsrequirements to current practice andprocedure.

Paragraph (2) • Clarifies for better understanding.• Adds reference to members or managers of a

limited liability company.

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Former paragraph (7)(newly numbered asparagraph (4))

• Deletes the requirement that the statement benotarized, to conform to current practice andprocedure (which do not require notarization).


• Deletes from the requirement that the actualstudent attendance policy be submitted, andreplacing that with submission of a statementcertifying to the existence of the policy.

• This deletion seeks to cure the imbalancebetween the public benefit and the cost andtime spent on compliance.

• Changes “three years” to state “four years,” toconform to section 16-99-112 (which requiresrecords to be kept for four years) and toconform to current practice and procedure.


• Deletes from the requirement that the actualrefund policy be submitted, and replacing thatwith submission of a statement certifying to theexistence of the policy.

• This amendment seeks to cure the imbalancebetween the public benefit and the cost andtime spent on compliance.


• Deletes from the requirement that the providerobtain a surety bond to be calculated using aformula, and replacing that with requirement ofa minimum $2,000 bond, provided that nobond is required if the provider certifies that noadvance payments are collected fromstudents.

• This amendment seeks to cure the imbalancebetween the public benefit and the cost andtime spent on compliance.

New paragraph (3) tosubsection (a)

• Requires information about the provider’sadministrator, in order to incorporate certainrequirements being deleted from paragraph(2) into this new paragraph.

16-99-100Criteria forapproving andcertifyingcontinuingeducationcourses

Subsection (a) • Deletes from the word “offering” to clarify thatthe section applies to a continuing education“course,” itself, whereas a course “offering”pertains to the course being taught at aparticular time and at a particular place.

• Deletes the requirement that courses must beoffered in this State.

• The amended rule will minimize thedisproportionate impact on the regulatedindustry, strengthen the qualitative benefit ofcontinuing education courses, and facilitateeasier compliance for licensees andproviders.

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Paragraphs (1), (2), and(3) of subsection (a)

• Defines continuing education.30

Former paragraphs (6)and (13) from subsection(a)

• Conforms to current practice and policy,which do not require such evaluations ascriteria for course approval.

16-99-101Courses notacceptable forcontinuingeducationrequirements

Heading • Refers to course “certification” instead ofcourse “requirements,” to clarify the languageand more accurately reflect the subject matterof the section.

Former paragraph (5) • Removes the prohibition against certifyingcourses consisting of meetings that are anormal part of in-house training, since suchtraining possibly could be designed to meetrequirements for certification and isunnecessary.

16-99-102Generalprocessingprocedures for acontinuingeducationcourse offering

Heading • Refers to an “application” for course“certification” instead of “general processingprocedures,” to clarify the language and moreaccurately reflect the subject matter of thesection.

Subsection (a) • Deletes the requirement that applications forcertification of a course or course offering bemade not less than forty-five (45) days beforethe proposed course offering, to conform tocurrent policy and practice (which do notenforce the requirement) and because therequirement is unnecessary.

• Deletes the application exception for a coursethat has been designated by the commissionas a core course.31

• Conforms to current practice and policy, whichrequires application for certification for allcourses not developed by the commission.

Subsection (b) • Deletes the reference to a “processing fee,”and replacing the reference with the correctterm, “application fee,” as used in chapter 16-53.

30 Conform to Act 47 (SLH 1999), which amends section 467-4.5, HRS, codifying defining continuingeducation.31 Conform to Act 47 (SLH 1999), adding section 467-4.5, HRS, permitting designation of more than one corecourse, and so the commission will no longer develop all core courses

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• Deletes the obsolete reference to the initialsetting of fees.32

Subsection (c) • Delete references to course “offerings,” sincereferences to “offerings” more appropriatelybelong in section 16-99-103.

• This amendment will clarify the section andconform it to current policy and practice.

6-99-103Subsequentofferings of acertifiedcontinuingeducationcourse

Entire section • Clarifies application to all offerings, both initialand subsequent, of certified continuingeducation courses.

• Adds references, which were deleted fromsection 16-99-102 (which applies to initialcourse certification applications) since theymore appropriately belong in section 16-99-103 (which applies to course “offerings”), asthe references apply to course “offerings.” Theadded references from section 16-99-102include the requirement that the courseoffering form be submitted at least fourteen(14) days in advance and the requirementregarding information that must be displayed atthe course site.

• Changes the requirement for commission“approval” of each course offering to anotification requirement, since approval isunnecessary and to conform more closely tocurrent policy and practice, since courseoffering requests are routinely processed bycommission staff.

32 Current reference to fees provided in rules adopted pursuant to chapter 91, HRS.

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Subsection (a)(2) throughsubsection (a)(4)

• Deletes the requirements for certificationsregarding the classroom compliance withhealth and safety codes and the courseoffering compliance with section 16-99-100, asunnecessary, since those certifications arecovered in the provider’s certificationapplication and in the course certificationapplication, respectively.

• Deletes the reference to payment of anadditional course offering fee, to conform tocurrent policy and practice, since no courseoffering fee is required or collected.

• Adds the requirement for certification that theinstructor has met the commissionrequirements.33

16-99-104Application andcriteria forcertification of acontinuingeducationinstructor

Entire section • Deletes references to the commissioncertifying an instructor.34

Subsection (a) • Adds the requirement that providers certify tothe commission that instructors have met thecommission requirements. 35

Former subsection (c)(7)(new subsection (b)(7))

• Deletes the reference to substantial teaching,as unnecessary.

• Clarifies that the commission requirementsfor an instructor’s ability to teach consist ofonly the expressly listed criteria, unless thecommission determines additional criteria.

Former subsection (d)(6)(new subsection (c)(6))

• Deletes the reference to a demonstration ofcommand knowledge being made before thecommission, as unnecessary and to conformto current practice and policy.

Subsection (f) (new • Adds “within the biennium” to conform the

33 Conform to Act 47 (SLH 1999), which adds section 467-4.5, HRS, and requires that continuingeducation providers certify to the commission that instructors have met the commission requirements.34 Conform to Act 47 (SLH 1999), which adds section 467-4.5, HRS, and requires that continuingeducation providers certify to the commission that instructors have met the commission requirements.35 Conform to Act 47 (SLH 1999), which adds section 467-4.5, HRS.

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subsection (e)) instructor’s workshop requirement to currentpolicy and practice.

Subsection (h) • Deletes the advisory committee asunnecessary.36

16-99-105Biennialproviderregistration,biennialinstructor andcoursecertification

Entire section • Deletes the references to instructorcertification.37

• Replaces renewal deadline references.38

Subsection (c) • Adds a reference to a “course owner” renewinga course certification.

• Conforms to current practice and policy, sincepersons who are not also registered providersmay own courses.

Subsection (c)(3) • Deletes from the obsolete reference to the feesset forth in section 16-99-107.39

Subsection (d) • Deletes as unnecessary, since the instructor’sdevelopment workshop requirement is coveredin section 16-99-104.40

16-99-106Forfeitedregistration,certification;reinstatement

Subsection (b) • Deletes from the heading and from theincorrect references to “reinstatement” of aforfeited registration or certification, and addingreplacement language using the correctterminology of “restoration,” therebyconforming the language to section 436B-14,HRS.41

• Deletes obsolete reference to the fees set forthin section 16-99-107 and replacing it by adding

36 Conform to Act 47 (SLH 1999), which adds section 467-4.5, HRS and requires that continuingeducation providers certify to the commission that instructors have met the commission requirements.37 Conform to Act 47 (SLH 1999), which adds section 467-4.5, HRS, and requires that continuingeducation providers certify to the commission that instructors have met the commission requirements.38 Implement Act 240 (SLH 1999), which amends section 467-11, requiring completed license renewal on orbefore the commission prescribed deadline, instead of the December 31 license expiration date of an even-numbered year.39 Current reference to fees provided in rules adopted pursuant to chapter 91, HRS.40 Conform to Act 47 (SLH 1999), which adds section 467-4.5, HRS and requires that continuingeducation providers certify to the commission that instructors have met the commission requirement.41 Conform to Act 47 (SLH 1999), which adds section 467-4.5, HRS, and requires that continuingeducation providers certify to the commission that instructors have met the commission requirement.Accordingly, the commission no longer certifies instructors, and references to such certification have beensuperseded by the statutory amendment. For these same reasons, the reference to section 16-99-104(regarding instructor certification criteria) is deleted from subsection (b)(2).

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a current reference to fees provided in rulesadopted pursuant to chapter 91, HRS, andchanging the term “sums” to “fees,” for clarity.

16-99-107Fees; renewalof providerregistration,course,instructor,certificate ofcompletion ofcourse,nonrefundableapplication fees

Entire section • Removes the reference to instructorcertification fees.42

• Deletes the obsolete reference to the adoptionof fees and the obsolete listing of non-currentfees, and replacing them by adding a currentreference to fees provided in rules adoptedpursuant to chapter 91, HRS.

16-99-108Revocation orsuspension of acontinuingeducationcoursecertification

Entire section • Deletes references to a course “offering” toconform to current practice and policy, sincecourse offerings are distinguished fromcourses, themselves; courses are certifiedwhereas a course “offering” refers to theteaching of a course on a particular date at aparticular time.

Paragraph (3) • Deletes to conform to statutory authority, asdescribed at 16-99-104.

Paragraph (4) • Deletes as unnecessary, since coursecertification is completely independent ofprovider registration.

16-99-109Revocation orsuspension of acontinuingeducationproviderregistration

Entire section • Deletes references to a course “offering” toconform to current practice and policy, sincecourse offerings are distinguished fromcourses, themselves; courses are certifiedwhereas a course “offering” refers to theteaching of a course on a particular date at aparticular time.

Paragraph (2) • Deletes from the reference to section 16-99-110(1) because that entire section is repealedherein, and replacing the reference withsection 16-99-104, which sets forth guidelinesfor instructor qualification.

Paragraph (5) • Deletes as unnecessary and redundant ofparagraph (2).

16-99-110Revocation orsuspension of a

Repealed • The commission cannot revoke or suspend acertification it does not convey.43

42 Conform to Act 47 (SLH 1999), which adds section 467-4.5, HRS, providing that the commission nolonger certifies continuing education instructors.43 Conform to Act 47 (SLH 1999), which adds section 467-4.5, HRS and requires that continuingeducation providers certify to the commission that instructors have met the commission requirements.

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continuingeducationinstructorcertification16-99-112Record keepinginformation andretention period

Entire section • Changes references to the particularinformation required to be kept in the provider’srecords, and the particular information requiredto be submitted to the commission, to conformto current practice and policy.

• Changes references to courses completed byalternative delivery methods.44

Subsection (c)(3) • Deletes since a continuing education courseshall not include an examination, pursuant tosection 16-99-87, definition of “clock hours.”

16-99-113Advertising

Entire section • The section is amended to makenonsubstantive, stylistic, and grammaticalchanges.

16-99-114Prohibitedadvertisingpractices

Paragraph (2) • Conform the rule to the policy adopted by thecommission in its February 25, 2000memorandum titled “Decisions on Legal andLicense Names and Advertising,” to permitprovider advertising in either the full licensename or a registered trade name, and to makea nonsubstantive punctuation change.

Paragraph (4) • Deletes as obsolete, since a continuingeducation course shall not include anexamination, pursuant to the statutoryamendment described, herein, at section 16-99-87, definition of “clock hours.”

Paragraphs (5) through(8)

• Renumbering former as a result of the deletionof former paragraph (4).

16-99-115Continuingeducationcourse entrancerequirements

Entire section • Amends the section to conform to currentpolicy and practice, which allows a provider toissue a course completion certificate uponpresentation of a commission-issuedrestoration application, in lieu of a real estatelicense pocket card.

16-99-116Discontinuingcourse offerings

Entire section • Deletes provisions allowing cancellation of aprovider’s registration if the provider fails toschedule any course offerings during a twelve-month period. The amendment removesprovisions that are unnecessary, do not protectthe public, and may have a disproportionateimpact on providers.

16-99-117 Entire section • Clarifies that it applies to the substance of a 44 Conform to Act 47 (SLH 1999) adding section 467-4.5, HRS, which permits delivery of continuingeducation courses by alternative delivery methods.

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Material change course, and to clarify that the course owner isresponsible for compliance with the rule.

16-99-118Mastercontinuingeducationinstructors list

Repealed • Repeals the requirement that the commissionmaintain a list of approved, certified instructors,to conform to statutory authority, as describedat section 16-99-104, herein, whereby thecommission no longer certifies continuingeducation instructors.

16-99-119Review,evaluation, andinvestigation

Entire section • Makes section consistent with the language ofthe heading.

• Deletes references to instructors, to conform tostatutory authority, as described at section 16-99-104, herein, whereby the commission nolonger certifies continuing educationinstructors.

• Clarifies that the section applies to continuingeducation providers, by deleting references toan administrator or course offering. Thosereferences are unnecessary, since a provider’soperations and performance inherently includethe administrator and course offerings.

16-99-120Continuingeducationproviderdisclosurestatement

Repealed • Repeals as unnecessary since amendment ofsection 16-99-99 deletes the requirement thata disclosure statement be submitted to thecommission with the continuing educationprovider’s registration application.

• Repeal of this rule seeks to cure the imbalancebetween the public benefit and the time andcost spent on compliance by the provider.

16-99-121Faculty

Paragraph (4) ofsubsection (b)

• Deletes as unnecessary, since the sectionalready describes the administrator’sresponsibilities in broad terms, which wouldinclude, among other things, advertising.

16-99-122Display ofcertificate ofregistration andinstructor'scertificate

Entire section • Deletes references to instructors, to conform tostatutory authority, as described at section 16-99-104, herein, whereby the commission nolonger certifies continuing educationinstructors.

16-99-123Classrooms

Entire section • Make nonsubstantive, stylistic changes.

16-99-124Classroomcompliance

Entire section • Makes a nonsubstantive, stylistic change.

16-99-125 Repealed • Repeals as unnecessary.

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Tuition andother charges

• Conforms to the amendment made to section16-99-99, removing the requirement that aprovider submit to the commission a disclosurestatement or a student registration form.

• Repealing the section seeks to cure animbalance between the public benefit and costand time spent on compliance.

16-99-126Books andsupplies

Repealed • Repeals as unnecessary.• Repealing the section seeks to cure an

imbalance between the public benefit and costand time spent on compliance.

16-99-127Hearings

Heading • Clarifies and simplifies to more accuratelyreflect the subject matter of the amendedsection.

Adding of new subsection(b)

• Replaces former subsections (b) and (c).• Deletes reference to instructors, to conform to

statutory authority, as described at section 16-99-104, (the commission no longer certifiescontinuing education instructors).

• Includes in the new subsection (b) a referenceto the commission’s “intent to revoke orsuspend,” rather than the commission’s“action,” to conform to due process noticerequirements.

16-99-128Request for acontested casehearing

Entire section • Clarifies that a contested case hearingpursuant to chapter 91, HRS, and chapter 16-201 may be requested by continuing educationproviders and course owners regarding denied,suspended, or revoked registration orcertification.

Subchapter 10CondominiumHotelOperators16-99-147Registration

Subsections (a) and (d) • Clarifies that registrations expire on even-numbered years.45

Subsection (d) • Refers to the commission prescribeddeadline.46

16-99-148Fidelity bond

Subsection (a) • Makes nonsubstantive stylistic, punctuationand grammatical changes.

16-99-150Conduct

Subsections (a) and (d). • Makes grammatical and punctuationcorrections.

45 Conforms to Act 240 (SLH 1999) amending chapter 514A, HRS, which establishes the expiration date ofregistrations as occurring at the end of each even-numbered year, not each year.46 Implementing Act 240 (SLH 1999), amending 467-11, HRS, as described herein, at section 16-99-7.

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