Hawaii Practice Exam 3
Sandra doesn't have to worry about any maintenance on the common areas of her condo building, such as the fitness facility or exterior lawn care, because she pays ______. a) Association fees b) Property taxes c) Tenant fees d) Title insurance
a) Association fees Sandra's condominium association fees pay for maintenance of common areas.
Before closing, the ______ should get an appraisal of the property if the transaction's being financed. a) Buyer b) Lender c) Seller d) Title insurance company
a) Buyer If financing is being used, the buyer's lender will require the buyer to obtain an appraisal.
In Hawaii, where would Lei most likely find information about her rights to attend her condo association board meetings? a) Bylaws b) Declaration c) House rules d) Lease
a) Bylaws Bylaws detail owner's rights related to condominium governance as well as the board's scope of authority.
Charles is a licensed Hawaii salesperson. He's paid a commission for the sales he makes and sets his own work hours and methods. Which of these must be true? a) Charles is an independent contractor. b) Charles runs his own real estate firm. c) If Charles is injured at work, he's eligible for worker's compensation payments. d) If the real estate market slows down, Charles may be eligible for unemployment compensation.
a) Charles is an independent contractor. Commission-based compensation and individual determination of work hours are hallmarks of an independent contractor arrangement. Charles isn't eligible for unemployment or worker's compensation.
Jeff has filed a quiet title suit against Roger. What's the purpose of this suit? a) To clear up a cloud on title b) To clear up a property line dispute c) To exercise his right to quiet enjoyment of the property d) To prohibit the seller from releasing the buyer's name
a) To clear up a cloud on title A quiet title suit seeks to "quiet" (remove) claims against a property's title.
Dean is the listing agent for Jane's property. After a couple of weeks on the market, two formal written offers come through. One is for well below the listing price, and another is a bit closer, but still under the list price. What should Dean do with the offers? a) Present both offers to Jane. b) Present the higher offer to Jane, but not the lower offer. c) Present the lower offer to Jane, but not the higher offer. d) Respond to the buying agents and tell them to submit new offers closer to the listing price.
a) Present both offers to Jane. All formal written offers a licensee receives must be presented to the seller.
Which of the following elements is always required for a Hawaii real estate contract to be valid? a) Attorney review b) Consideration c) Earnest money d) Profit
b) Consideration In addition to consideration, a contract needs to be in writing and have legally competent parties, offer and acceptance, and a legal purpose.
When property managers take matters into their own hands and evict a tenant without going through the proper legal procedures, what type of eviction is it? a) Actual eviction b) Constructive eviction c) Self-help eviction d) Vigilante eviction
c) Self-help eviction A self-help eviction occurs when property managers take matters into their own hands rather than taking the time to go through the proper channels.
Travis, a licensed salesperson, filed a complaint against his broker alleging lack of supervision. He was awarded a judgment of $10,000, but the broker won't pay. For what amount may Travis apply to the real estate recovery fund? a) $0 b) $10,000 c) $15,000 d) $25,000
a) $0 Hawaii's real estate recovery fund reimburses consumers who've been awarded a court judgment against a licensee. Licensees are not eligible to apply for reimbursement from the fund.
To practice real estate in Hawaii, salespeople must be sponsored by ________. a) A broker b) A broker with at least 10 years of experience c) A licensed attorney d) An associate broker
a) A broker Salespersons must work under the supervision of licensed brokers.
When a tenant under a lease stays beyond the lease's terms, and the landlord continues to accept rent from that tenant, what happens? a) A month-to-month tenancy is automatically created. b) The landlord can evict the tenant without notice. c) The landlord can raise the rent. d) The tenant is given 30 days to renew their lease and select a different type of tenancy.
a) A month-to-month tenancy is automatically created. If a tenant under a lease stays beyond the lease's terms, and the landlord continues to accept rent from that tenant, a month-to-month tenancy is automatically created.
Which type of property tax is based on the value of the property? a) Ad valorem b) In rem c) Market value d) Special assessments
a) Ad valorem Ad valorem taxes are based on the value of the property. Remember that ad valorem is Latin for "according to value."
The principal broker of Welcome Home Real Estate failed to renew the business name registration. What happens now? a) All firm and licensee licenses will be placed on involuntary inactive status until the business name is registered. b) Nothing. Business name registration isn't required. c) The firm has a 90-day grace period to renew the name. d) The main location may continue to function normally, but branch office licenses will be inactivated.
a) All firm and licensee licenses will be placed on involuntary inactive status until the business name is registered. If the firm fails to register the business name, all firm and individual licenses will be placed on inactive status.
What's true about an escrow closing? a) All settlement services are handled by a closing agent. b) All settlement services are handled by the listing agent. c) The buyer and seller must be present. d) The buyer's and the seller's attorneys must be present.
a) All settlement services are handled by a closing agent. An escrow closing is one in which the parties don't meet face to face. Settlement paperwork and services are handled by a closing agent.
Ryan has made an offer on a Maui property and elects to have it tested for radon and lead. Which of these statements is true? a) As the buyer, Ryan will likely bear the cost of any inspections performed. b) If the inspection indicates the presence of lead or radon, the seller must correct these issues. c) Ryan's broker will complete an inspection contingency form and submit it with the offer to purchase. d) The seller traditionally pays for any inspections the buyer wishes to perform.
a) As the buyer, Ryan will likely bear the cost of any inspections performed. The inspection contingency clause provided in the HAR purchase contract notes that payment for all inspections the buyer requests are the buyer's responsibility.
In what way are the tasks that escrow performs limited? a) Escrow may only perform tasks according to written instructions from buyers and sellers. b) Escrow may only perform tasks as outlined by the courts. c) Escrow may only perform tasks as permitted by the buyer's lender. d) Escrow may only perform tasks as stipulated by the buyer's and seller's brokers.
a) Escrow may only perform tasks according to written instructions from buyers and sellers. Escrow is a fiduciary for both the buyer and seller and can only perform tasks approved by both parties in either the contract, the closing instructions, or some other written document.
Jimbo doesn't yet have a real estate license. Which activity is he legally allowed to perform without one? a) Give advice to a friend who is negotiating the purchase of a house. b) List a friend or family member's home for sale for a fee. c) Negotiate the sale of a house for two friends and receive a tip in thanks. d) Receive payment for managing real estate.
a) Give advice to a friend who is negotiating the purchase of a house. Any activity performed for another and for a fee requires a license. Jimbo should be in the clear if he gives advice to his friend negotiating the purchase of a house as long as he's not compensated for it.
How does use of a Hawaii land trust protect the true identity of the property owner? a) It allows property to be purchased and held in the name of a trustee. b) It allows the property owner to seal all records of conveyance. c) It permits buyers to purchase property in the name of a fictitious buyer. d) It permits the property owner's name to be removed from all legal conveyance documents.
a) It allows property to be purchased and held in the name of a trustee. Property may be purchased by or held in a land trust. The trustee's name appears on the purchase and ownership documents.
What happens to the public report the developer has sold all condo units? a) It expires. b) It remains on file with the local planning and zoning division. c) It remains on file with the REC and must be updated annually. d) It's turned over to the association board of directors.
a) It expires. The public report is a compilation of all governing documents and disclosures related to the condominium as well as information pertinent to building the project. Once the project is done and all units are sold, the public report expires.
Gina wrote a lease agreement for use with the six apartments she owns. Which of these provisions would Hawaii law prohibit? a) Landlord is not liable for injuries sustained on the premises. b) Landlord reserves the right to enter the premises with 48-hours' notice. c) Tenant is responsible for weekly garbage pickup. d) Tenants are prohibited from smoking on premises.
a) Landlord is not liable for injuries sustained on the premises. The rental agreement may not include any terminology that limits the landlord's liability.
Which of these environmental issues requires that a builder or developer get a special type of permit and meet additional regulations in order to build on or develop the property? a) Location in a special management area b) Location in a tsunami evacuation area c) Proximity to an active volcano due to vog d) Proximity to an airfield
a) Location in a special management area Building in a wetland or special management area requires special permitting and additional development considerations.
While he was in Colorado for six months helping care for his parents, Christian leased his Maui home to Lenore. He collected a security deposit but didn't prepare a written lease or complete an inventory of property condition. He returned home to find that Lenore severely neglected the house, nearly destroying it. Is Christian legally able to retain Lenore's security deposit? a) No, because Christian didn't complete the inventory of property condition. b) No, because there was no written lease. c) Yes, because her lease prohibited her from damaging the property. d) Yes, if the rental agreement was for a period of less than a year.
a) No, because Christian didn't complete the inventory of property condition. If the landlord doesn't provide a written inventory of property condition, the condition when the tenant vacates is considered to be the condition the property was in when the tenant moved in unless the landlord can prove otherwise.
In Hawaii, which of the following actions performed by a licensed salesperson is a real estate violation? a) Refusing to show a property because the prospective buyers are minorities b) Refusing to show a property that's outside of a buyer's budget c) Refusing to show a property to a party who's not financially qualified d) Showing a property to qualified buyers
a) Refusing to show a property because the prospective buyers are minorities Discriminating based on protected class status is a violation.
Hannah qualifies for a Hawaii County homeowner exemption. She owns her residence and has had it outfitted with ramps, wide doorways, and lowered counters since she's disabled. What else must be true of Hannah? a) She's a full-time resident of Hawaii. b) She's a registered voter. c) She's at least 65. d) She's legally blind.
a) She's a full-time resident of Hawaii. We don't know for sure that Hannah is 65 or legally blind. As a person with a disability, she may be eligible for a homeowner exemption, but she must still be a year-round resident of the state to qualify.
Some down payment assistance programs offer low- or no-interest deferred loans, known as silent seconds. Which of the following statements is true about these programs? a) The deferred loan doesn't need to be repaid until the first mortgage is paid off or refinanced, or the home is sold. b) The lender providing the first mortgage isn't informed of the borrower's use of a down payment assistance program. c) The programs rarely have qualifying requirements, and are first-come-first-served. d) They may only be used with FHA loans.
a) The deferred loan doesn't need to be repaid until the first mortgage is paid off or refinanced, or the home is sold. With this type of down payment assistance, deferred loans don't have to be repaid until the house is sold or the first mortgage is paid off, so the borrower doesn't make monthly payments on it, making it "silent."
Which of these is an example of kuleana rights? a) The right to apply for title to the land worked or farmed. b) The right to convert leasehold ownership to fee simple property ownership. c) The right to convey land owned by commoners. d) The right to distribute land to the high chiefs.
a) The right to apply for title to the land worked or farmed. After the Great Mahele, commoners who lived and worked the land and their descendants had rights (called Kuleana rights) to apply for land title. kuleana rights exist even today.
What's the purpose of a survey? a) To determine whether encroachments exist and to determine the boundaries of the property b) To establish history of past ownership c) To establish proof of ownership d) To insure the policy owner against financial loss if the title to the real estate has covered defects
a) To determine whether encroachments exist and to determine the boundaries of the property A survey is used to determine whether encroachments exist and to determine the boundaries of the property.
Brady moved out of his Lihue condo. How many days does his landlord have to provide him with a refund of his security deposit and an itemized accounting of deductions taken? a) 10 b) 14 c) 30 d) Five
b) 14 Landlords have 14 days. The notice must be in writing and accompanied by receipts for deductions taken as well as a check for the remainder.
Tina is negotiating a commercial lease in Hawaii. For which transaction is agency disclosure required? a) A lease of any length and value b) A lease that's one year or longer c) A lease that's six months or longer d) A lease with a total lease fee of $50,000 or more
b) A lease that's one year or longer Commercial leases of one year or longer require agency disclosure.
Which of these restrictive covenants would be prohibited by Hawaii's fair housing statute? a) A prohibition against changing the association bylaws or declaration b) A prohibition against conveying a property to any female c) A prohibition against developing the property into condominiums d) A prohibition against selling the property to any government agency
b) A prohibition against conveying a property to any female This section of Hawaii's revised statutes prohibits enforcement of any restrictive covenant that discriminates against a protected class.
To calculate property taxes, multiply the ______ by the tax rate. a) Amount of mortgage interest b) Assessed value c) Market value d) Square footage of the property
b) Assessed value To calculate property taxes, multiply the tax rate by the assessed value.
Which of the following must an individual do to be qualified to get a Hawaii broker's license? a) Be licensed as a Hawaii salesperson for the previous five years and pass the broker's exam b) Be licensed as a Hawaii salesperson for three of the previous five years and pass the broker's exam c) Be sponsored by a managing broker and pass the broker's exam d) Obtain a licensed or unlicensed assistant
b) Be licensed as a Hawaii salesperson for three of the previous five years and pass the broker's exam To qualify for a broker's license, an individual must have been employed full-time as a Hawaii licensed real estate salesperson for three of the previous five years prior to sitting for the broker exam.
In which of these situations is it permissible to not include the brokerage firm's trade name in promotional materials? a) Brenda is co-branding a brochure with a lender. b) Damien is a sole proprietor and has no registered business name. c) The information won' fit in the space reserved for Cooper's ad. d) The marketing materials are for an individual salesperson.
b) Damien is a sole proprietor and has no registered business name. Unless the firm is operated by a sole proprietor and has no trade name, marketing materials must include the brokerage firm's name.
Which of the following is used to establish proof of ownership? a) Abstract of title b) Deed c) Survey d) Title insurance policy
b) Deed A deed is used to establish proof of ownership.
Which of the following is true about Hawaii's de minimis encroachment allowance? a) For agricultural properties, the allowance is 18 inches. b) For commercial properties, the allowance is three inches. c) For conservation property, the allowance is nine inches. d) For residential properties, the allowance is three inches.
b) For commercial properties, the allowance is three inches. Commercial: three inches, residential: six inches, agricultural: nine inches, conservation: 18 inches.
Douglas is the buyer's agent for a transaction in which May (from a different brokerage) listed her seller client George's property. From whom will Douglas receive his compensation? a) From George b) From his own broker c) From May's broker d) It depends
b) From his own broker Licensees may receive compensation for real estate services only through their broker.
Based on the Professional and Vocational Licensing Act, which of these individuals is most likely to be refused a license? a) Dawn hasn't paid her federal income taxes for three years. b) Gerry is behind on court-ordered child support payments. c) Jeanine failed to pay several outstanding traffic citations. d) Marcella doesn't make her minor children attend school.
b) Gerry is behind on court-ordered child support payments. The act specifically permits licensing authorities to refuse to issue a new, restored, or reinstated license if it's proven that the applicant has failed to pay court-ordered child support.
Select the statement that most accurately a differences between independent contractors and employees. a) Employees set their own hours, pay their own expenses, and are compensated according to their results and not time spent. b) Independent contractors and employees are taxed differently. c) Independent contractors must file W-2s with the IRS. d) Most brokers are employees, not independent contractors.
b) Independent contractors and employees are taxed differently.
Which of these best describes the impact of the Great Mahele of 1848? a) It created a land classification system that included Moku-puni (entire islands), Moku (divisions of land within islands), Ahupua'a, which were triangular strips of land within Moku, etc. b) It distributed ownership of lands previously owned by the kings to high chiefs and chiefs who further distributed some of it to commoners who could work the land as tenants. c) It permitted commoners to own land previously owned by the king. d) It resulted in an overturn of the allodial ownership system and reverted ownership of all privately owned lands to the king, the high chiefs, and the chiefs.
b) It distributed ownership of lands previously owned by the kings to high chiefs and chiefs who further distributed some of it to commoners who could work the land as tenants. The Great Mahele, or great division of lands, was King Kamehameha's redistribution of lands formerly owned by Hawaiian kings to high chiefs and chiefs. Some of the land was further distributed to commoners who were permitted to work but not own the land.
Jacob included an appraisal contingency in his offer on Leilani's house, and Leilani accepted the offer. The appraisal came in $4,000 less than the list price of the home. Which of these is NOT an option Jacob and Leilani have? a) Jacob can come to the table with additional cash to cover the gap. b) Jacob can force the lender to increase the loan-to-value ratio to cover the gap. c) Leilani can reduce the property's list price to the appraised value. d) Leilani can terminate the contract.
b) Jacob can force the lender to increase the loan-to-value ratio to cover the gap. Jacob can't force the lender to loan a higher percentage of the purchase price.
Jenson just received his Hawaii real estate salesperson license. He didn't complete the prescribed pre-licensing coursework, and he took only the state licensing exam. How is this possible? a) Jenson has a two-year degree in business and real estate appraisal. b) Jenson held an active license in another state. c) Jenson redeemed his Hawaii broker's license for a salesperson license. d) Jenson worked as an unlicensed transaction coordinator for five years before applying for his license.
b) Jenson held an active license in another state. An applicant who holds a similar license in another state may apply for a waiver of the pre-license education requirement and the uniform portion of the licensing exam.
Karl signs a contract to buy Harvey's home. Before closing, it's discovered that Karl is only 16 years old. Because he's a minor, he's not considered legally competent to enter into a contract. Which of the parties can void the contract? a) Harvey b) Karl c) Nobody d) Only a judge
b) Karl If a party doesn't have legal capacity and enters into a contract anyway, the contract is voidable by the party lacking legal capacity.
Lanikila bought a home in a PD-H community. How does ownership of the common amenities differ from ownership of these amenities in a condominium project? a) Lanikila co-owns the amenities with the other unit owners; condo owners have use permission only. b) Lanikila has use of, but not ownership interest in, the amenities. c) Shared amenities in a PD-H are owned by the property owners. d) The businesses located in the PUD share ownership of the amenities.
b) Lanikila has use of, but not ownership interest in, the amenities. PUD common areas are typically owned by the owners association.
Where will you find official documentation about the licensing of real estate professionals? a) Codes of conduct b) Laws and regulations c) Ordinances d) Zoning codes
b) Laws and regulations License laws are recorded as laws or as regulations.
Which of the following is true of a resident manager? a) The RM has a fiduciary responsibility to the property managed and must prepare and maintain monthly statements of unpaid assessments. b) The RM is often salaried, and may receive a free place to live as compensation. c) The RM is required to carry a fidelity bond. d) The RM must maintain copies of the declaration, bylaws, house rules, and sample original conveyance document.
b) The RM is often salaried, and may receive a free place to live as compensation. The RM is often an employee of the association, and receives a salary and place to live.
What action could temporarily stop a foreclosure? a) The borrower abandons the property. b) The borrower declares bankruptcy. c) The borrower remains on the property. d) The borrower uses his right of redemption.
b) The borrower declares bankruptcy. The only option that would temporarily stop a foreclosure is the borrower declaring bankruptcy. If a borrower were to use the right of redemption, the foreclosure would be stopped altogether.
To which of these documents should a unit owner in a planned community condominium refer to determine whether the association prohibits property owners from displaying a flag? a) The articles of incorporation b) The bylaws c) The condominium map d) The seller's property disclosure
b) The bylaws The association bylaws or house rules should include information about what's permitted and prohibited.
Josie wants to add an Ohana dwelling to her property. Which of these is a requirement no matter which island Josie is on? a) Only family members may live in the Ohana. b) The dwelling must be permitted. c) The lot size must exceed 5,000 square feet. d) The Ohana must be detached from the main structure.
b) The dwelling must be permitted. While each county has varying Ohana regulations, an Ohana unit shouldn't be constructed without a permit no matter which island it's on.
Hawaii license laws describe required pre-licensure education, define activities that require a license, describe standards of conduct, and enforce these standards. Why do they do this? a) To earn money from Hawaii real estate licensees b) To protect consumers c) To protect licensees d) To protect the Hawaii Real Estate Commission
b) To protect consumers Hawaii license laws protect consumers by ensuring a standard of professionalism.
Jerrica just signed a lease agreement with Trevor, who owns several Kauai condos. Which of these statements regarding this lease is FALSE? a) Jerrica can elect to use her cancelled checks as receipts. b) Trevor is prohibited from providing Jerrica with his GET number. c) Trevor must provide Jerrica with a copy of the lease agreement. d) Trevor must provide Jerrica with the owner or owner's agent's contact information.
b) Trevor is prohibited from providing Jerrica with his GET number. Trevor must provide his tenants with his GET number so they may apply for low-income tax credits, if applicable.
Kaimani made an offer on Theo's Maui property on June 12. Theo provided Kaimani with the property disclosure on that same day. Two days later, he amended the disclosure. How many days does Kaimani have to terminate the contract based on the amended disclosure? a) 10 days from receipt of the amended disclosure. b) 10 days from receipt of the original disclosure. c) 15 days from receipt of the amended disclosure. d) 15 days from receipt of the original disclosure.
c) 15 days from receipt of the amended disclosure. Buyers have 15 days from receipt of the amended disclosure to terminate the contract based on disclosure information.
Gene's firm was disciplined for a licensee's misrepresentation. Gene now requires all salespeople to work prescribed hours, attend all training, and follow the work methods outlined in the policies and procedures manual. Which of these is true? a) As the principal broker, Gene can make these requirements of his associated licensees. b) Gene can take this action for a limited time in order to discipline his associated licensees. c) Gene is jeopardizing his licensees' independent contractor status. d) Licensee independent contractor status isn't jeopardized unless Gene pays licensees a salary.
c) Gene is jeopardizing his licensees' independent contractor status. By treating independent contractors as employees, Gene is jeopardizing their independent contractor status.
Suzanne just hired her sister, real estate licensee Geraldine, to list her property. Another broker schedules a showing for his client who's interested in Suzanne's property. What needs to take place? a) Geraldine doesn't need to do anything special, since she doesn't own the property. b) Geraldine must terminate her contract with Suzanne, since she can't represent a family member. c) Geraldine needs to disclose in writing to the other broker and his client that the property is owned by a family member. d) Geraldine needs to keep the fact that the property is owned by her sister confidential.
c) Geraldine needs to disclose in writing to the other broker and his client that the property is owned by a family member. Ownership interest, including direct or indirect interest of the licensee or an immediate family member, must be disclosed in writing to all parties to the transaction.
Robert holds a Hawaii real estate salesperson's license and is selling his own property. Which of these is true? a) He can advertise the property as for sale by owner as long as he discloses his licensed status. b) He can't list his property with his brokerage firm. c) He must disclose his license status to potential buyers. d) He must list the property with his brokerage firm.
c) He must disclose his license status to potential buyers. Licensees are prohibited from marketing their own properties as "for sale by owner." No matter whose property Robert is marketing, he must disclose his license status.
For home sellers, which of the following is a benefit of the seller's property disclosure statement? a) It forces the seller to make home repairs they would otherwise have avoided. b) It gives sellers the right to conceal material facts and known defects about the home for sale. c) It provides the seller with protection against liability and potential legal action. d) It removes transparency from the process, making the sale easier for the seller.
c) It provides the seller with protection against liability and potential legal action. An accurately completed residential property disclosure form provides protection against liability and potential legal action.
Keith is selling his condominium. Which of these statements about his disclosure responsibilities is FALSE? a) Keith must disclose if there are any common area facilities that are co-owned with other residents. b) Keith must disclose that the property was originally subdivided. c) Keith must disclose the amount of any impending special assessments. d) Keith must disclose whether the property is subject to any association.
c) Keith must disclose the amount of any impending special assessments. The seller's property disclosure requires Keith to disclose if there are any impending special association assessments, but not the amount.
Which of these is NOT an example of a purchase money mortgage? a) Jenna's seller, Rob, is financing her purchase of his home less a 10% down payment that Jenna must provide. The loan is for 20 years at 6% interest. Jenna will have title to the property. b) Kennedy is financing the down payment for the couple who's buying her house. She'll have a lien against the property. c) Kirsten is financing the full purchase price for the investors who are purchasing her duplex. The investors will provide a 15% down payment, and Kirsten will hold title to the property. d) Megan's lender has given Russell permission to borrow the down payment for his home purchase from the seller. The seller will hold a second-position lien against Russell's property until the loan is paid in full.
c) Kirsten is financing the full purchase price for the investors who are purchasing her duplex. The investors will provide a 15% down payment, and Kirsten will hold title to the property. A primary difference between an agreement of sale and a purchase money mortgage is who will hold title. If the seller will hold the title, it's an agreement of sale. If the seller will hold a lien against the property, it's a purchase money mortgage.
The residents of Oahu Avenue are a close-knit bunch. They're all young couples with small children, and they don't want this dynamic to change when two of the couples have to move. Those couples sign an agreement promising not to sell to anyone without kids, or to anyone over the age of 50. The contract can't be enforced because it's missing ______. a) Consideration b) Legally competent parties c) Legal purpose d) Offer and acceptance
c) Legal purpose This discrimination is a fair housing violation. Legal purpose means that contracts must be written for a lawful objective. A contract for an illegal purpose is void.
Mickey's license has been forfeited because the principal broker's license lapsed. What will most likely happen to the seller's transaction on which Mickey is currently working? a) Mickey can continue to work the transaction through closing. b) Mickey can switch brokerage affiliations and immediately pick the transaction back up. c) Mickey must cease all licensed activity, which means referring his client to another brokerage firm. d) The contract between Mickey's seller and the buyer terminates.
c) Mickey must cease all licensed activity, which means referring his client to another brokerage firm. When a license is forfeited for any reason, the licensee must immediately stop performing all licensed activities. The licensee may be able to transfer to a new firm, but that process can take a few days, in which time the client would be unrepresented.
For how long must a real estate brokerage firm retain trust account records? a) Five years b) One year c) Three years d) Two years
c) Three years HIREC requires that firms retain trust account records for at least three years. The records must be available for inspection by the commission.
Which of these statements regarding Hawaii's Land Court registration system is true? a) Clear title to a property registered in the regular system is documented with a Certificate of Title. b) Counties determine which properties are to be submitted to Land Court. c) Most conveyances are recorded through Hawaii's regular system. d) Title companies require that properties with Kuleana rights be registered through Land Court.
c) Most conveyances are recorded through Hawaii's regular system. In today's real estate industry, Land Court registration is rarely used and is never required. Most conveyances are registered through Hawaii's regular system.
When does the buyer find out how much money to bring to the closing? a) After receiving title b) At the closing c) Prior to the closing d) The day of signing
c) Prior to the closing The buyer finds out how much money to bring to closing prior to closing.
New ownership registration in Hawaii's Land Court is rare. Why does the state continue to use this system? a) Agricultural and rural property conveyance can only be registered through the Land Court system. b) Leasehold property conveyance must be registered in the Land Court system. c) Properties originally recorded in the Land Court system remain in that system, so both it and the regular system are maintained. d) The state wishes to maintain the historical aspects of land registration.
c) Properties originally recorded in the Land Court system remain in that system, so both it and the regular system are maintained. Because properties that were originally registered in the Land Court system remain in that system, the state must maintain both the regular and the Land Court systems.
Regal moved to Hawaii County from Arizona and signed a 10-year lease. She's responsible for paying the property taxes on her condo. She just learned she's not eligible for the homeowner exemption. Why might that be? a) Leasees aren't eligible for the homeowner exemption. b) Only natives of Hawaii are eligible for the homeowner exemption. c) Regal must demonstrate a full year of tax filing before she's eligible. d) The amount of Regal's lease doesn't meet the exemption threshold.
c) Regal must demonstrate a full year of tax filing before she's eligible. Leasehold owners are eligible for the exemption if they're responsible for paying the taxes. In Hawaii County, Regal needs to demonstrate a year of tax filing to be eligible. Remember that eligibility requirements vary among counties.
Which of these projects could be eligible for funding through the Native Hawaiian Housing Loan Guarantee Program? a) Mickey moved from his home state of Colorado and intends to rehabilitate a single family home on Hawaiian home land for his family. b) Morris is a native Hawaiian and intends to renovate and live in a single family home in a special management area on Oahu. c) Ron is a native Hawaiian. He plans to rehabilitate a three-bedroom house located on Hawaiian home lands and then live in it. d) Wendy plans to build a new duplex on Hawaiian homelands and rent both sides out.
c) Ron is a native Hawaiian. He plans to rehabilitate a three-bedroom house located on Hawaiian home lands and then live in it. The Native Hawaiian Housing Loan Guarantee Program is limited to native Hawaiians and owner-occupied single-family homes located on Hawaiian home lands.
Toni purchased a fee simple property in Hawaii. Her deed is recorded in Hawaii's regular system. What can she do to ensure she has sole ownership of the property? a) File a Hawaii quiet title suit. b) Purchase title insurance. c) Submit the property to Hawaii Land Court. d) Submit the property to the Bureau of Conveyances.
c) Submit the property to Hawaii Land Court. Toni can submit the property to Hawaii Land Court. The judicial review process will reveal if Toni is the sole owner. If she is, she'll receive a certificate of title verifying ownership.
Which of these must comply with Hawaii's fair housing laws related to accessibility? a) Christian substantially remodeled a single-family property in 2016 to convert it to a rental unit. b) Sandy constructed her fifth single-family rental property in 2002. c) Sunny Side Development built a five-unit apartment building in 2016. d) The Seaview Apartment complex, built in 1989, houses six units.
c) Sunny Side Development built a five-unit apartment building in 2016. Multi-family properties built after March 13, 1991, must meet certain design and accessibility requirements.
Which of these is an example of a brokerage disclaimer you'd find in a Hawaii purchase contract? a) Buyers and sellers must agree to first try mediation to resolve any disputes that arise. b) Licensees may not act as dual agents in a Hawaii real estate transaction. c) The brokerage firm hasn't made any representations about property boundaries. d) The seller isn't liable for the brokerage firm's failure to perform its obligations.
c) The brokerage firm hasn't made any representations about property boundaries. A disclaimer is something that limits a party's responsibility. The HAR purchase contract includes a disclaimer noting that the brokerage firm has not made any representations about property boundaries.
What's the relationship between the fiduciary duties owed by a licensee and the level of care provided by that licensee? a) A licensee who exercises an appropriate standard of care is automatically performing the required fiduciary duties. b) None. They're separate concepts. c) The fact that agents are fiduciaries raises the level of care required of licensees. d) The level of care expected of a licensee is specifically described by the six fiduciary duties.
c) The fact that agents are fiduciaries raises the level of care required of licensees. Because agents are fiduciaries, the standard of care they must exercise is even greater than it would otherwise be.
Caitlin needs to pay for some routine maintenance to one of the units in her apartment complex. Which bank account should she use? a) Either the trust account or the operating account b) The firm's operating account c) The operating account for that specific unit d) The trust account for that specific unit
c) The operating account for that specific unit Funds in the firm's operating account are used for operating expenses. Trust account funds are disbursed only for very specific purposes, such as returning a security deposit.
How does the tax rate for resort properties compare to the residential property tax rate in Hawaii? a) Property type isn't considered when property taxes are assessed. b) The resort rate is exactly the same as the residential rate. c) The resort rate is higher. d) The resort rate is lower.
c) The resort rate is higher. A property's use is considered when determining property tax rates in Hawaii. Commercial resort tax rates are higher than residential tax rates.
Trinity is creating some marketing material for a new leasehold listing. Which of these statements is true? a) All marketing materials must include the leasehold renegotiation term. b) The ads must identify how many years are left on the lease. c) Trinity must identify the property as a leasehold. d) Trinity must market the property as a periodic lease.
c) Trinity must identify the property as a leasehold. Any leasehold property advertised for sale must be clearly identified as leasehold.
Which number or numbers represent the parcel number for TMK number 453120310? a) 120 b) 3 c) 31 d) 310
d) 310 The last three digits, 310, represent the parcel number. The first number, 4, indicates the property is located on Kauai.
What must you have to apply as a real estate salesperson in Hawaii? a) A 90% or better on prelicensing education exams b) A bachelor's degree c) A six-month reserve of operating funds d) A sponsoring broker
d) A sponsoring broker Applicants for a salesperson's license must be sponsored by a Hawaii broker.
What is Hawaii's residential property disclosure form? a) A statement of the condition the home will be in after repairs are completed b) A statement that lists all home upgrades the seller made c) A statement that outlines the home repairs made in the past five years d) A statement the seller provides to the buyer that outlines all known property defects
d) A statement the seller provides to the buyer that outlines all known property defects A property disclosure form outlines all known property defects of the home for sale and is provided to the buyer upon completion by the seller.
Which of these is the first step in beginning a condominium project? a) An engineer or architect must develop and certify a site plan and then present it for recoding with the Bureau of Conveyances. b) Developers must file a public report with the REC. c) Developers must notify any property leaseholders. d) Developers must present a Declaration of Condominium Property Regime, Condominium map, and Bylaws for recording with the Bureau of Conveyances.
d) Developers must present a Declaration of Condominium Property Regime, Condominium map, and Bylaws for recording with the Bureau of Conveyances. Before development can begin on a condominium project, the developers must present the required documentation, including a Declaration of Condominium Property Regime, for recording with the Bureau of Conveyances.
Which of these provisions does the HAR Purchase Contract form NOT include? a) Agency disclosures b) Brokerage firm obligations c) Buyer obligations d) Dual agency consent
d) Dual agency consent The HAR Purchase Contract form notes if the licensee is acting as a dual agent, but there's a separate consent form that must be completed for any dual agency transaction.
Which of these is an example of good consideration? a) A payment of less than $10,000 b) A payment of more than $10,000 c) Earnest money paid with a cashier's check or wire transfer d) Gifting a house to a family member
d) Gifting a house to a family member Valuable consideration differs from "good" consideration, which may merely be consideration of affection, such as when a person gives a family house to her child, receiving love and goodwill in return.
What must a licensee do when preparing a CMA (or opinion of price) for a consumer? a) Have an appraiser sign off on the price before it's presented. b) Hire a home inspector to physically inspect the property. c) Hire an appraiser to value the property. d) Include a statement that the opinion isn't an appraisal.
d) Include a statement that the opinion isn't an appraisal. Licensees must include a statement that the opinion isn't an appraisal. Only appraisers can conduct appraisals.
Descendants of native Hawaiian farmers, who lived and worked the land, have ______, which gives them reasonable access, agricultural uses, and other gathering rights to kuleana land. a) Kanaka rights b) Kauai rights c) Konohiki rights d) Kuleana rights
d) Kuleana rights Kuleana rights give Native Hawaiian farmers rights on the kuleana land, which included possession, agricultural use, and gathering rights.
Which of these statements about the Hawaii property disclosure form and distressed or short sale properties is FALSE? a) Jenson is selling his condominium to his son. He's not required to provide a seller's property disclosure form. b) Jonah must disclose the amount of his mortgage loan when selling the property as a short sale. c) Mark, the trustee in a bankruptcy proceeding is selling a home. Mark isn't required to provide a disclosure form. d) Oahu Bank and Trust is selling a property acquired through foreclosure. The lender is required to provide a seller's property disclosure form.
d) Oahu Bank and Trust is selling a property acquired through foreclosure. The lender is required to provide a seller's property disclosure form. Certain exemptions to providing the disclosure form are in place, including sales to a child, sale by operation of law (bankruptcy), and sale by a creditor in a foreclosure action. Sellers must disclose pending short sale or foreclosure actions.
Which of the following actions would NOT be considered a violation of fair housing law in Hawaii? a) Failing to provide accessible entrances and common areas in a new multi-family dwelling b) Implying in a listing advertisement that a property is more appropriate for persons without a disability c) Refusing to allow a person with a disability to make reasonable modifications deemed necessary for full enjoyment of the property at the tenant's own expense d) Requiring that a person with a disability who made reasonable modifications to the property restore it to its original condition (excluding normal wear and tear).
d) Requiring that a person with a disability who made reasonable modifications to the property restore it to its original condition (excluding normal wear and tear). It's a violation to refuse to allow a person with a disability to make reasonable modifications at his own expense, but the owner can require that the person return the property to its original condition.
Mariah is in year 23 of a 55-year leasehold interest in her Hawaii property. She wants to move out of state. Which of these is true? a) Her landlord must buy her out of her ownership interest. b) Her landlord must convert the property to fee simple ownership. c) She may sell her leasehold interest, and the lease term resets to the original number of years. d) She may sell her leasehold interest subject to the years remaining on her lease.
d) She may sell her leasehold interest subject to the years remaining on her lease. Leasehold interests may be sold or conveyed, but the lease term is subject to the remaining years on the existing lease. This is why leasehold values tend to decrease with the age of the lease.
Kirk's new landlord promised to repair the HVAC unit and plumbing issues before Kirk moved in. Kirk moved in, and then discovered that the landlord hadn't made the agreed-upon repairs. The landlord promised to do so within the next month, so Kirk remained. If the landlord fails to make the repairs, what are Kirk's options? a) Kirk can terminate his rental agreement and vacate the property within one month of the landlord's failure to make promised repairs. b) Kirk can't terminate his lease based on the landlord's failure to make repairs because he didn't check to see that the repairs had been made before he moved in. c) Kirk must provide the standard required notice to vacate since he stayed longer than one week after moving in and finding that the repairs weren't made. d) Since Kirk relied on the landlord's promise to correct the repairs after he moved in, he retains the right to terminate his agreement if the landlord fails to make the repairs.
d) Since Kirk relied on the landlord's promise to correct the repairs after he moved in, he retains the right to terminate his agreement if the landlord fails to make the repairs. If property conditions aren't as promised when the rental term begins, tenants can terminate within the first week. The termination right extends indefinitely if tenants rely on landlord promises to correct issues.
The ______ is the federal act that deals with telephone solicitation. a) Bitphone b) Telecommunication Device Act of 2003 c) Telecommunications Information Act d) Telephone Consumer Protection Act
d) Telephone Consumer Protection Act The federal act dealing with telephone solicitation is known as TCPA, or the Telephone Consumer Protection Act.
In Hawaii, both parties have to sign the agreement to demonstrate _____. a) That an attorney has reviewed the contract. b) That their agents have agreed to the terms and conditions. c) That the very first offer was accepted. d) That they understand the terms.
d) That they understand the terms. The signatures of both parties demonstrate that they understand the terms of the agreement.
Which of these statements about Hawaii purchase contract contingencies is true? a) All contingencies are prepared using separate HAR contract addenda. b) Hawaii real estate regulations prohibit the inclusion of purchase contract contingencies. c) The buyer and seller must employ an attorney to write a contract that includes contingencies. d) The HAR purchase contract includes provisions that address most contingency issues.
d) The HAR purchase contract includes provisions that address most contingency issues. Most contingency situations are addressed in the body of the HAR purchase contract. Only HAR members have access to this contract form, so other contract forms may or may not cover the same contingencies.
Kenneth plans to shop around for his mortgage loan to be sure he's getting the best interest rate and terms. What document from his lender permits him to make comparisons? a) Kenneth's settlement statement details all closing costs, so he can use it to compare lender loan products. b) The buyer's net sheet provides all the figures necessary for comparing loan products. c) The Closing Disclosure discloses all loan costs, so he can compare costs between lenders. d) The Loan Estimate permits Kenneth to comparison shop.
d) The Loan Estimate permits Kenneth to comparison shop. The Loan Estimate, issued three days after loan application, permits borrowers to compare loan terms between various lenders and loan programs.
Margot purchased shares in a Hawaii Co-op a little over a year ago. She just realized that she never received a property tax bill. Which of these statements might explain this? a) Co-op purchasers have a two-year grace period before they're required to pay property taxes. b) Co-ops are personal property, so aren't subject to property taxes. c) Margot's tax bill got lost in the mail. d) The cooperative corporation pays the property taxes.
d) The cooperative corporation pays the property taxes. A cooperative is a business entity (corporation, partnership, or trust) that owns the building and pays the property taxes. Each lessee is assessed a portion of the tax attributable to the individual unit.
Which of these statements about condominium management is correct? a) Chapter 514-B requires that condominium projects have a managing agent. b) Managing agents are independent contractors and therefore don't have to be licensed. c) Resident managers collect association fees and other moneys and therefore must be licensed. d) The managing agent has a copy of the project's governing documents.
d) The managing agent has a copy of the project's governing documents. A condominium project isn't required to have either a managing agent or a resident manager. Any managing agent must hold a real estate license and must maintain on file a copy of the project's governing documents.
Farquhar bought a house at a foreclosure auction. A few weeks later, he was notified that he couldn't take possession of or title to the property. What likely happened? a) The lender received another offer higher than the one Farquhar made at the auction. b) The lender revised the previous owners' loan and permitted them to remain in the property. c) The other lien holders protested the auction sale, so the lender retained the property. d) The previous owners redeemed the property by paying all mortgage payments and fees.
d) The previous owners redeemed the property by paying all mortgage payments and fees. Some states have a statutory redemption period after a foreclosure sale within which the homeowners can pay all funds owed to the lender to retain ownership.
Who is responsible for paying the conveyance tax in Hawaii? a) The buyer b) The lender c) The listing agent d) The seller
d) The seller The person who is doing the conveying—the seller—is responsible for paying the conveyance tax.
Which of these acknowledgments do buyers and sellers make by signing the HAR Purchase Contract form? a) The brokerage firm makes no guarantee as to the tax map key. b) The brokerage firm must ask permission before placing any ads or property signage. c) The buyers are purchasing the property in as-is condition. d) The seller makes no guarantee regarding the property's future resale value
d) The seller makes no guarantee regarding the property's future resale value By signing the contract form, buyers and sellers acknowledge that the seller and brokerage firm aren't guaranteeing future rental returns or resale value.
Ron and Eliana are neighbors. Ron wants to buy Eliana's Maui rental property. In the contract that Ron and Eliana sign, Ron is identified only as "the neighbor." Which statute or contract element does this violate? a) Consideration b) Legal purpose c) Offer and acceptance d) The statute of frauds
d) The statute of frauds The statute of frauds requires not only that a contract to convey property be in writing, but also that the contract identify the parties to the contract.
Bane's tenant has made frequent complaints regarding the landlord's failure to properly maintain the condo unit. Bane begins eviction proceedings against the tenant. Under Hawaii's retaliatory eviction regulations, which of these circumstances can the landlord NOT use as a reason for eviction? a) The landlord has a contract to sell the property. b) The landlord is going to completely remodel the property. c) The landlord's son is going to move into the property. d) The tenant keeps a dog as a service animal.
d) The tenant keeps a dog as a service animal. After circumstances for a retaliatory eviction occur, the landlord can still evict a tenant if other legal reasons for eviction exist. However, the landlord can't evict a tenant for having a dog as a service animal.
Which of these activities would a principal broker most likely be required to perform in the proper supervision of associated licensees? a) To create a mission statement and core values for the firm b) To require associated licensees to be in the office to greet potential clients c) To train associated licensees how to generate leads d) To train associated licensees on relevant real estate laws and rules
d) To train associated licensees on relevant real estate laws and rules Principal brokers are responsible for their associated licensees' behavior related to license-law related activities.
A Hawaii landlord has set the monthly rent for a residential unit at $1,850. What's the maximum amount the landlord can require for a security deposit? a) 85% of the monthly rental amount b) An amount equal to the monthly rental amount c) As much as he wants d) Twice the monthly rental amount
d) Twice the monthly rental amount If the tenant is permitted to bring a pet, the landlord may charge twice the monthly rental rate as a deposit.
In Hawaii, within what time frame after passing the licensing exam must a salesperson license applicant apply for a license? a) 90 Days b) Five years c) One year d) Two years
d) Two years The applicant must apply within two years of passing the exam and may only work under the direction and supervision of a licensed broker.
Reggie is a legal guardian for his mother, who suffers from a mental illness. His mother would like to buy a luxury condo, but Reggie tells her she can only afford a cheap condo. In reality, his mother could easily afford a luxury condo, and Reggie hopes to transfer her excess money into his personal account. Reggie's mother trusts his word, and enters into a contract to buy a cheap condo. This is an example of ______. a) Duress b) Innocent misrepresentation c) Mutual mistake d) Undue influence
d) Undue influence Undue influence exists when an act of persuasion overcomes another person's free will and judgment. Reggie's familial relationship to his mother gives him the opportunity to exercise undue influence over her decisions.
Why is proximity to a Hawaii wetlands subject to material fact disclosure? a) It will be more expensive to purchase than other properties. b) The flooding danger is higher in these areas than in other locations on the islands. c) Wetlands are more prone to hurricane damage than other areas. d) Wetlands are often home to protected species of wildlife or plants.
d) Wetlands are often home to protected species of wildlife or plants. Wetlands are often home to threatened and protected wildlife and plants. Thus, development of these areas is limited and subject to special permitting.
