Complaints filed with the state against Hawai'i real estate agents in the last fiscal year rose to a six-year high, while the number of fines issued was the highest in at least a decade.

The state Real Estate Commission reported that there were 122 complaints filed against real estate agents during the 12 months ended June 30. That was up from 95 complaints in the prior fiscal year and was the highest since 140 complaints were filed in 2001. In the last decade, complaints reached a low in 2003 at 64.

The recent rise could suggest that more agents are running afoul of professional standards or displeasing consumers during the cooling housing market, especially considering that the number of home sales this year are expected to be the lowest in five years.

But Jo Ann Uchida, complaints and enforcement officer for the Regulated Industries Complaints Office of the state Department of Commerce and Consumer Affairs, said there is no clear indicator as to why complaints are up.

"This is not an aberration or a significant spike," she said. "It is trending upward, but we aren't seeing anything that is cause for alarm."

A TINY FRACTION

Last year there were about 14,800 active real estate agents licensed in Hawai'i — including sales agents and property managers of residential and commercial property — so the number of complaints represents a tiny fraction, 0.8 percent, of those in the business.

Calvin Kimura, executive officer of the Real Estate Commission, recommends that consumers review complaint histories and disciplinary records for real estate agents on file with the state, especially considering that buying or renting property is usually a major life decision involving substantial money.

The Regulated Industries Complaints Office receives, investigates and prosecutes complaints against real estate agents. The Real Estate Commission, which is also attached to the Department of Commerce and Consumer Affairs, takes disciplinary action against licensees based on RICO hearings results or settlement agreements.

Of the 122 complaints filed in the last fiscal year, 101 cases were still pending as of June 30. Another 21 cases were resolved mostly with a mix of warning letters and legal action. Five cases produced insufficient evidence to pursue.

The Real Estate Commission during the fiscal year took disciplinary action against 36 agents, including some whose complaint cases dated back to 2001.

Most of the discipline involved cases where licensees failed to disclose prior professional discipline or criminal convictions, including one agent who had a real estate license revoked in California and another agent who had 30 criminal convictions in Alaska.

Kimura said that past criminal convictions typically don't disqualify someone from being a real estate agent, but that lying about a criminal or disciplinary record usually does.

SOME SPECIFIC CASES

A few other disciplinary actions involved agents doing business with licenses the agents said they didn't realize had expired.

One agent lost his license for five years after failing to make a timely disclosure that an oceanfront home he marketed for sale on the Big Island violated county permitting rules. The disclosure was made after a buyer agreed to a purchase, which later fell through.

In one alarming case, independent agent William L. Stedman had his license revoked by the commission for threatening a Mainland couple who agreed to buy a time-share in 2004.

The commission said Stedman bought a helicopter tour for the couple as a sales incentive, but that the couple afterward canceled their purchase within a 7-day period allowed by law.

The commission said Stedman, after initially trying to persuade the couple to reconsider their purchase or pay him back for the tour, made repeated telephone calls to the couple's Mainland home after the couple asked not to be contacted.

Part of one recorded Stedman voice message cited by the commission said: "More than likely, I am never going to get the money back that I had given you and I just want to let you know that you are a coward! You and your wife don't deserve something as special as this, and just to let you know that if I ever saw you again, I'm going to mop up the floor with you! You and your wife shouldn't even bother having kids cause if they're going to (expletive) act like you guys, you are polluting the world."

Stedman is also alleged to have indicated to the couple that he had their credit card numbers and other personal information. The couple said they canceled their credit card accounts because of Stedman's action.

According to the commission, Stedman insisted his behavior was out of character and caused in part by personal problems. The commission fined Stedman $5,000 and suspended his license for two years with a provision that he undergo a psychiatric assessment before the license can be reinstated.

MORE FINES ISSUED

In another matter, Steven J. Gines of Maheda Realty Inc. in 2003 allegedly accepted $1,550 from a tourist to buy a time-share that the buyer said he never delivered. The commission fined Gines and his company $80,000 each, revoked their real estate licenses and ordered $1,550 in restitution. Maheda Realty is no longer in business, according to state business registration records.

Of the disciplinary actions taken in the last fiscal year, the commission issued $109,500 in fines against 42 licensees, mostly ranging from $1,000 to $5,000.

The 42 fines, which included some issued to agents and the firms they worked for, was a 10-year high, up from 33 fines in 2006. Uchida said the rise may be due to the Regulated Industries Complaints Office recently developing more staff specialties focused on the real estate industry.

There were seven license revocations, which was within the 10-year range of four to eight annually. Only two licenses were suspended, which was within the 10-year range of zero to five annually.

Reach Andrew Gomes at agomes@honoluluadvertiser.com.

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