Hawaii Rental Agreements 101
Rental agreements are an essential aspect of renting and leasing property in Hawaii. They set the basic rules of a relationship between the landlord and tenant—what is expected from both parties during the lease term, when payments are due, who is responsible for repairs, and so forth. When renting property, it’s essential to have a rental agreement in writing, or you may not be able to enforce terms like when you as a landlord can enter the premises to make a repair or if the tenant is responsible for paying neighborhood association dues, which are common in many areas of Hawaii.
Hawaii law does not require a rental agreement between a landlord and tenant (though a written agreement is necessary for certain types of tenancies). The law does require that your rental agreement comply with many relevant laws, such as the federal Fair Housing Act, which prohibits discrimination because of race, color, religion, sex, disability, familial status, or national origin , and would generally prohibit a rental agreement or lease that requires additional rent or deposits because the tenant has children, for example.
In order to promote fair housing opportunities for Hawaii residents and reduce civil rights violations, a group of real estate professionals created a standard lease agreement to be used in the state. The Hawaii Association of Realtors (HAR) introduced the Residential Rental Agreement in 2010 after working with an antidiscrimination group. HAR’s residential rental agreement was modeled on the forms of the Hawaii Regional Council of Multiple Listing Services, which drafts MLS forms with the cooperation of local boards of Realtors across the state. HAR hired a legal committee to review the form to ensure compliance with state and federal laws. The new form adopted by the Department of Commerce and Consumer Affairs each year brings with it any changes made to that form by the HAR, which reviews the agreement each year as well.
Components of a Hawaii Rental Agreement
Drawing again from the Hawaii Association of Realtors Standards and Practices for Rental Agreements, and as noted above, the typical rental agreement or lease will note the following:
- Terms of Lease – this section should note if the rental agreement is for a fixed term (e.g., a twelve month lease for a residential apartment) or is a month to month lease. You should also note in there any other pertinent information, for example if you are renting a condo and are only authorized to rent it out for one year because that’s all the condo documents allow.
- Rent – there should be a provision in the rent section that provides the amount of the base rent per month, and if it is due on a certain date or in advance. For example, some leases provide that the rent is due on the 1st of each month, in advance, and rents that are not paid by a certain time incur a late fee. There’s also a provision for where the rent is to be paid to at the time of the signing of the lease.
- Security Deposit – it is typical that the lease requires a security deposit at the time the lease is signed. For example, the Hawaii Residential Landlord-Tenant Code provides that the security deposit can be the equivalent of two months rent. The security deposit is held by the Lessor under the lease, and is only used at termination or expiration of the lease or rental agreement. It is used by the Lessor for cleaning, re-renting, and any other purposes that are stated in that section of the rental agreement.
- Maintenance – typically, the rental agreement will provide that the Tenant maintains the property in a clean and sanitary condition except for normal wear and tear. It is also noted that the tenant has to give the landlord notice of any repairs to be made in a timely fashion and that the landlord will make all the repairs to the leased premises except for anything that is not ordinary wear and tear.
It is important to note that the parties can depart from the form rental agreement on any of the above points, these are just some of the more common features of a rental agreement or lease.
Essentials of a Valid Hawaii Rental Agreement
As part of the rental agreement, landlords are legally required to provide tenants with certain disclosures and information regarding the property to be rented, cigarette smoking, and any possible sewer or water service issues. Individual counties, like Maui, have their own rules, and what’s required by a county may not always be exactly the same as what’s required by the state.
You can find the legal requirements for the rental agreement in Chapter 521 of the Hawaii Revised Statutes, and under Sections 521-32 through 521-36 of the Hawaii Revised Statutes. Requirements include specific disclosures about the condition of the rental unit, security deposits, late fees, rules for returning rents, pre-rental inspections, and more. Crucial tenant disclosures include the following:
The state also requires landlords to make available the following information to tenants: The Hawaii Association of Realtors helps maintain compliance and shed professional light on the existing legal requirements, and their standardized rental agreement forms are based on Hawaii real estate purchase contracts. These contracts are tailored to meet legal standards and requirements, and are updated with every new revision or addition to state law.
Advantages of the Hawaii Association of Realtors Standard Rental Agreement
Using the standardized rental agreement provided by the Hawaii Association of Realtors (HAR) offers a multitude of benefits for both landlords and tenants. These benefits can help ease the process of entering into a rental agreement, providing clarity, legal protection, and a clear path for dispute resolution should issues arise.
For landlords, using a standard rental form can help avoid any ambiguity regarding expectations and obligations for both parties from the outset. Clarity in the terms of the rental agreement helps ensure that all parties understand their rights and responsibilities. It also provides a legally binding document that can aid in upholding the terms of tenancy and protect the landlord against potential legal repercussions. This transparency also benefits the tenant, making it clear from the start what is expected of them and providing a solid basis for their obligations .
For both parties, the HAR-standardized rental agreement includes provisions for resolving disputes. If conflicts arise regarding rental payments, maintenance issues, or any other aspect of the landlord-tenant relationship, the agreement outlines a specific procedure for resolution. This can include mediation or other forms of conflict resolution, providing a clear and structured process for addressing any issues that may occur during the tenancy.
Using HAR’s standardized rental agreement is an advantageous choice for landlords and tenants alike. The clarity, legal protection, and dispute resolution guidance offered by this standardized form can simplify the process and provide a greater sense of security for both parties. The benefits of using HAR’s standard rental agreement cannot be overstated, as it provides a secure platform for building harmonious and lawful landlord-tenant relationships.
Common Issues and Resolutions with Hawaii Rental Agreements
When entering into a rental agreement, whether you are a property manager, landlord, or tenant, issues can present themselves that may complicate the relationship among the parties. Early termination and rental disputes are two common issues that often arise. The Hawaii Association of Realtors ("HAR") has provided guidance in their publication "Residential Purchase Agreement and Addenda," and we would like to share with you excerpts from the HAR publication that provides some guidance on these issues.
EARLY TERMINATION
When might early termination occur? The earliest a lease can be terminated in Hawaii is when the lease has a definite term, such as one year, and that one year has expired. However, if the lease is month to month, either party may give the other a written 45-day notice for termination. When a tenant decides to vacate early and terminate the rental agreement, they may be held liable for any deficiencies in rent for the period of time until the landlord can find a new tenant. Alternatively, it is common for a landlord to have the option to keep the security deposit in lieu of rent for the period of time until the landlord can find a new tenant. The tenant may still be required to follow the formal steps and request in writing the return of the security deposit. If trade fixtures were installed by the tenant, then they are automatically the property of the landlord and must remain on the premises. If the tenant has left items on the premises, then the landlord may have the option to retain the security deposit for cleaning and repairs to the premises.
RENTAL DISPUTES
In Hawaii, as in most places, no tenant is required to stay past the end of the agreed upon rental period. So long as the rent has been paid for the period of time that the tenant has stayed past the designated day of termination, the tenant is entitled to remain in the premises. If the landlord attempts to evict the tenant early, in other words, before the end of the designated rental period, the landlord is acting illegally and is subject to statutory fines. Further, if the landlord locks the tenant out for failure to pay rent, the tenant can sue the landlord for statutory damages, attorney’s fees and costs. If the tenant fails to pay rent, the landlord must first send a notice to the tenant specifying the amount of delinquent rent. If payment is not received within five days, notice must be given to the tenant that the lease is terminated. In any event, a landlord may not terminate any lease or rental agreement because of tenant race, color, national origin, religion, sex, age, marital status, physical disability, or because the tenant has children under the age of 18 regularly domiciled with the tenant. In the unfortunate situation where a tenant has caused damage to the rental property, a landlord would have the right to file a lawsuit against the tenant. In addition, the lease must specify that the landlord has the option of retaining the security deposit in the event of damage to the premises. The tenant may have a duty to mitigate damages when they are leaving the rental property. In essence, the landlord may have a duty to find a new tenant, but the tenant would be required to cooperate in the process. Although, the landlord is under no obligation to accept a potential tenant that will not legally qualify.
Conclusion: Peace of Mind with Proper Rental Agreement
The importance of a comprehensive rental agreement cannot be overstated. For landlords, it provides the structure they need to reduce their risk of liabilities and unwanted surprises through a clear explanation of their rights and responsibilities — as well as those of their tenants. For tenants, it provides them with a roadmap to not only protect their rights but to also have a secure rental experience that matches what was promised before they signed on the dotted line. Both parties benefit from having a formal record that documents the understanding of their landlord-tenant/renter relationship.
Making matters even easier for landlords and tenants alike , the Hawaii Association of Realtors provides both a long-term rental agreement and a short-term rental agreement that are pre-written and time-tested, providing peace of mind to landlords when tenants sign their lease agreement — and peace of mind to tenants that they won’t encounter surprise fees or hassles. Working with a lease agreement that’s already been vetted and is in line with Hawaii regulations means both parties can feel confident about staying compliant with Hawaii law.