Hawaii Real Estate Practice Exam

10 sample questions, with answers explained

Every question above with its correct answer and the reasoning behind it. Read the explanations for the ones you answered correctly too. A lucky guess and knowing the rule look identical on a score report. These are sample questions from our larger bank.

1. 1. A Hawaii lessor sells leased land to the lessee as part of conversion to fee simple. How does chapter 508D treat that sale?

   • AIt eliminates every tax and recording requirement
   • BIt is a listed exemption from that chaptercorrect
   • CIt automatically creates dual agency for the parties
   • DIt requires the seller to guarantee every future resale price

   Why: HRS 508D-3 lists this conversion sale as an exemption. An exemption from that disclosure chapter is not an exemption from every other property law.

   Property ownership

2. 2. A Hawaii brokerage lists only a post office box and an answering service as its office. What is missing?

   • AOnly a different business-card color
   • BA second post office box in another ZIP code
   • CA qualifying physical place of businesscorrect
   • DA larger mobile-phone data plan

   Why: HAR 16-99-2 excludes a mere post office box, answering service, mail drop or motor vehicle from a place of business.

   Practice of real estate

3. 3. A Hawaii managing agent will receive a rebate on an expenditure for an owner. Whose knowledge and consent are required?

   • AOnly the contractor issuing the rebate
   • BOnly an unlicensed bookkeeping assistant
   • CBoth the owner and the principal brokercorrect
   • DNo one's, if the rebate is smaller than the management fee

   Why: HAR 16-99-3 prohibits the commission, rebate or profit on owner expenditures without the owner's and principal broker's knowledge and consent. The rebate amount does not erase that requirement.

   Property management

4. 4. A Hawaii broker deposits a client's check in a personal account to simplify bookkeeping. Which concept describes the mixing?

   • ANovation
   • BAccretion
   • CComminglingcorrect
   • DProration

   Why: HAR 16-99-2 identifies depositing client funds in a broker's personal account as commingling.

   Practice of real estate

5. 5. Available tax-map-key maps identify a Hawaii residential property within the climate commission's designated sea-level-rise exposure area. How should the seller address that fact under current 508D-15?

   • ADisclose it only if the buyer first proves an insurance loss
   • BTreat the designated area as exempt merely because the property is residential
   • COmit it because only past flooding may ever be disclosed
   • DInclude the covered material fact in the statutory disclosurecorrect

   Why: Current HRS 508D-15 includes this designated exposure area in the mapped-area notification rule, subject to the stated map availability condition. The scenario supplies that condition rather than assuming an unqualified survey duty.

   Property disclosures

6. 6. A Hawaii licensee negotiates a purchase through a company in which the licensee has ownership. What disclosure to the property owner is required?

   • AOnly the company's advertising slogan
   • BNothing if the company pays cash
   • CThe licensee's true position in writingcorrect
   • DOnly a confidential note to the buyer's lender

   Why: HAR 16-99-3(g) requires written disclosure of the licensee's true position to the listing owner or property owner when acquiring covered property interests.

   Property disclosures

7. 7. Before a Hawaii licensee posts a for-rent sign, what authorization and approval are required?

   • AOnly oral permission from any current tenant
   • BOnly a broker's private assumption that the owner will agree
   • COnly approval from a neighborhood advertising service
   • DWritten owner or seller authorization and principal-broker or broker-in-charge approvalcorrect

   Why: HAR 16-99-3 requires both the written owner authority and the specified broker approval. A tenant's statement does not substitute for those requirements.

   Practice of real estate

8. 8. A Hawaii application arrives without supporting education and experience documents. What does the rule require?

   • AIssue a permanent license automatically
   • BAccept a business card as a substitute
   • CWait to request documents until the first license renewal
   • DReject the applicationcorrect

   Why: HAR 16-99-19(a)(2) requires rejecting applications without supporting education and experience documents.

   Practice of real estate

9. 9. A Hawaii broker advertises a leasehold property for sale. What specific word must identify the interest in the advertisement?

   • ALeaseholdcorrect
   • BFreehold
   • CFee simple
   • DUnrestricted

   Why: HAR 16-99-11 requires identification by the word leasehold in any medium. A leasehold interest must not be presented as fee-simple ownership.

   Property disclosures

10. 10. A Hawaii licensee claims that personal investment purchases are outside the conduct rule. What is correct?

    • AOnly transactions producing a commission are covered
    • BThe rule applies only to firms and never individuals
    • CThe conduct rule also covers the licensee's personal transactionscorrect
    • DEvery personal purchase is categorically exempt

    Why: HAR 16-99-3(a) applies the conduct requirements to licensees' personal real estate transactions as well as brokerage business.

    Practice of real estate