While there is no shortage of free residential rental agreements available online, as often is the case, you get what you pay for.
And I get it. Lawyers are expensive, and for a simple document it’s tempting to get something “good enough” for “free.” However, more often than not, what you could end up getting is something that violates Hawaii’s Residential Landlord-Tenant Code and might wind up costing you a lot in the long run.
Hawaii’s Residential Landlord-Tenant Code has a handful of specific requirements that might not be captured by a free document generator. Additionally, even if the generic form doesn’t explicitly run afoul of the code, it likely will not have crucial language setting forth the rights and obligations of the parties.
Here are three things to keep in mind when reviewing a residential rental agreement.
>> Rent increases. The rental amount cannot be increased during the rental term. More often than not, a form rental agreement found online will be silent as to when and how a landlord can increase the rent. This might give the parties the impression that a rental increase is allowable if the landlord provides sufficient notice to the tenant.
With the sharp increase in inflation over the past couple of years, some landlords may have been rethinking the amount of rent they were charging and told their tenants the rent would be increasing. For rental agreements longer than a month, that is not allowed, regardless of how much advance notice the landlord gives a tenant.
Let’s say a rental agreement is for five years and the landlord lets the tenant know at the start of Year Four that the rent will increase starting Year Five to keep up with inflation. Many would think that one year is more than enough notice to a tenant. Doesn’t matter. The rental amount cannot be increased during the rental term.
The rule is even stricter for shorter rental agreements. For rental agreements that are month to month, the landlord needs to provide written notice 45 days in advance of the increase, not one month. For rental agreements that are less than month to month (e.g., week to week), landlords need to provide 15 days’ advance written notice.
>> Security deposits. The security deposit cannot exceed one month’s rent and must be returned within 14 days after the rental agreement ends. Many online forms simply provide a blank for the landlord to insert the security deposit amount.
A cautious landlord might require a security deposit equal to first and last month’s rent, an estimated cleaning fee, an estimated fee to replace lost keys, and an extra fee if the tenants have a pet. That is not permitted. The total amount of all deposits cannot be in excess of one month’s rent.
Further, the landlord- tenant code dictates that the landlord can use the security deposit only for specific items and requires that within 14 days after the rental agreement ends, the landlord provide the tenant with either the full security deposit or a written accounting of what the security deposit was used for, including invoices and receipts, and any money left over. If the landlord fails to do so, the landlord forfeits the right to the security deposit and must return the full amount to the tenant.
>> Owner designees. The landlord must disclose each person authorized to manage the premises and each person who is an owner of the premises or who is authorized to act on behalf of the owner. Most online forms omit this information, but it is specifically required by the Hawaii code. If this information is not provided to a tenant, a tenant has the right to demand disclosure and, if the landlord fails to respond within 10 days, the tenant is entitled to $100 plus attorneys’ fees.
For more comprehensive assistance with understanding the rights and obligations of landlords and tenants under the code, you can consult the Landlord/Tenant Code Handbook published by the state Office of Consumer Protection, or call the office’s Residential Landlord/Tenant Hotline at 808-586-2634 from 8 a.m. to noon Monday through Friday.
Avery Matro is a partner at Carlsmith Ball LLP and can be reached at amatro@carlsmith.com.
