October 23, 1995
TO: ALL CITY AGENCIES
FROM: SAMUEL L. DOMINGO, CHAIR, AND ETHICS COMMISSIONERS
SUBJECT: GUIDELINES ON REAL ESTATE LICENSES
The Ethics Commission issues these guidelines on the holding of active real estate sales or broker licenses by City personnel. These guidelines apply to elected or appointed City officers and all City employees.
The portion of the Standards of Conduct that applies to real estate licenses is Section 11-102(c), Revised Charter of the City and County of Honolulu 1973 (1994 Ed.), which states in pertinent part:
No elected or appointed officer or employee shall... [e]ngage in any business transaction or activity or have a financial interest, direct or indirect, which is incompatible with the proper discharge of such person's official duties or which may tend to impair the independence of judgment in the performance of such person's official duties.
The holding of an active real estate license enables personnel to engage in business transactions or activities and to have financial interests through commissions on sales that may be incompatible with official duties.
These guidelines constitute a minimum standard of conduct. The administrative heads of City agencies may establish a higher, or more restrictive, standard of conduct relating to real estate licenses.
City personnel who activate or obtain real estate licenses need to file a new CC-8, Disclosure of Interests by Officers and Employees, form.
The general rule in regard to the holding of active real estate sales or broker licenses has two parts.
1. Active Real Estate Licenses:
City personnel who a) have authority to take official action to enforce the laws or b) have access in the course of City employment to confidential information regarding real estate on Oahu should not have active sales or broker licenses and therefore must inactivate such licenses.
2. Ownership of a Real Estate Business:
City personnel who a) 1) have such enforcement authority or 2) have access to confidential information relating to real property and b) own all or part of real estate firms should not manage the operations of such business interests.
Such personnel should file with the Commission an affidavit in which they promise to abide by this restriction. Attached is a sample affidavit.
"Official act" or "official action" means a decision, recommendation, approval, disapproval, or other action, including inaction, which involves the use of discretionary authority. Section 3-8.1, Revised Ordinances of Honolulu 1990.
Examples of City positions with enforcement authority include but are not limited to:
a. Police officers
b. Fire safety inspectors, such as Firefighters III
c. Investigators for the Liquor Commission
d. Building inspectors
Examples of City agencies in which personnel may have access to confidential information regarding real estate, whether the personnel have discretionary authority (such as managers) or ministerial duties (such as secretaries), include but are not limited to: Department of the Corporation Counsel, Department of Finance, Planning Department, Department of Land Utilization, Board of Water Supply, Department of Public Works, City Council, and Office of Council Services.
Examples of positions where official duties, whether discretionary or ministerial, may entail access to confidential information regarding real estate include but are not limited to: civil engineers, structural engineers, architects, and landscape architects.
The Ethics Commission has established the following exceptions to the general rule:
1. Personnel who have inactive licenses or who inactivate licenses in accordance with these guidelines may activate such licenses for the purpose of buying or selling their own primary or secondary residences but not rental property or property owned by relatives. Personnel who activate licenses under the provision above should inform their appointing authority and the Commission before activation and after inactivation in writing.
2. Members of boards or commissions who do not receive more than a stipend in compensation and whose duties relate to real estate may choose to retain active real estate licenses, provided: a) they sign affidavits in which they agree to limit their real estate activities to real property that will not be affected by pending, required, or anticipated official action by the City and b) they abstain from official action that affects real property in which they have an interest.
If you have any questions, please call the Commission office at 527-5573.
SAMUEL L. DOMINGO
Chair, Ethics Commission
ROBERT J. FISHMAN