Which of the following actions is a violation that the Commission may take disciplinary action against?

Which of the following actions is a violation that the Commission may take disciplinary action against?

• A. Paying referral fees to local businesses
• B. Demanding high commissions from clients
• C. Accepting commission from anyone other than the broker
• D. Utilizing marketing strategies for referrals

Answer: (C)

The action of accepting a commission from anyone other than the broker is a clear violation of real estate regulations. In Hawaii, as in many other states, the broker is the licensed entity responsible for overseeing all transactions in a real estate firm. Agents and employees must operate under the broker's license, and handling commissions outside of this structure undermines the established broker-agent relationship. This regulation is in place to ensure that all financial transactions are properly managed and disclosed, providing an additional layer of consumer protection and maintaining the integrity of the real estate profession. Other choices may involve practices that are common in business but do not directly contradict licensing laws or rules set forth by the real estate commission. For example, paying referral fees to local businesses can be permissible under certain circumstances and within the limits defined by law. Similarly, demanding high commissions is a subjective business practice and may reflect the value an agent believes they provide to their clients. Utilizing marketing strategies for referrals is also a standard practice in the industry, as long as it complies with existing advertising laws. Thus, the act of accepting commissions improperly is what directly leads to potential disciplinary action from the Commission.

The action of accepting a commission from anyone other than the broker is a clear violation of real estate regulations. In Hawaii, as in many other states, the broker is the licensed entity responsible for overseeing all transactions in a real estate firm. Agents and employees must operate under the broker's license, and handling commissions outside of this structure undermines the established broker-agent relationship. This regulation is in place to ensure that all financial transactions are properly managed and disclosed, providing an additional layer of consumer protection and maintaining the integrity of the real estate profession.

Other choices may involve practices that are common in business but do not directly contradict licensing laws or rules set forth by the real estate commission. For example, paying referral fees to local businesses can be permissible under certain circumstances and within the limits defined by law. Similarly, demanding high commissions is a subjective business practice and may reflect the value an agent believes they provide to their clients. Utilizing marketing strategies for referrals is also a standard practice in the industry, as long as it complies with existing advertising laws. Thus, the act of accepting commissions improperly is what directly leads to potential disciplinary action from the Commission.