Posted in Blog  
  on Mar 04, 2016

Hawaii Security Deposit Law for Landlords and Tenants

Most landlords in Hawaii will require a security deposit from their tenants to guard against potential damages to the rental property or unpaid rent. According to Section 44 of the Landlord and Tenant Act, there are specific rules in place that landlords and tenants must follow in regards to this deposit, its uses, and how it must be returned. Here are the key points that you're going to want to know.

1. Landlords May Deduct From a Security Deposit For Only Three Specific Reasons.

The security deposit may be used to remedy tenant-caused damages to a rental unit, failing to pay rent, or to compensate for the failure to return keys at the termination of a rental agreement. It may also be used to restore the cleanliness of a rental unit less normal wear and tear and to compensate a landlord should a rental agreement be wrongfully terminated. No other deductions are allowed.

2. Landlords Are Restricted On The Amount They Charge For a Security Deposit.

A landlord may only require a security deposit that is equal to one month of rent. This includes any other deposits that may be requested, including a pet deposit.

3. A Security Deposit Does Not Cover The Last Month Of Rent Automatically.

Even though it is equal to one month of rent in many instances, a tenant cannot use their security deposit for the last month of rent they owe unless the landlord specifically agrees to this request. For a tenant to qualify for this, they must notify their landlord of this request with a 45 day notice of leaving the premises. If this is allowed, a landlord still retains the right to pursue the tenant for any damages that were caused within the rental unit.

4. Itemized Deductions Are Required For Security Deposit Claims.

Landlords have a duty to return a security deposit within 14 days of the termination of a rental agreement and a tenant moving out. Any claims to the security deposit must be itemized and placed in writing within this period of time. It is permitted for a reasonable estimate of cost to be subtracted from a security deposit if any repair or cleaning work cannot be completed within a 14 day period. Mailing the itemized list and remainder of the deposit on the fourteenth day is permitted as compliance with this portion of the security deposit law.

5. Tenants Have 1 Year To Dispute a Security Deposit Claim.

Tenants are allowed to take legal action against a landlord regarding their security deposit return for up to 1 year after the termination of the rental agreement.

6. Security Deposits Transfer To New Owners.

If a landlord sells the unit being rented, then the new owner is given 20 days under Hawaii law to notify the tenant of the amount credited as their security deposit. If this does not occur, then the state assumes that the tenant has paid one full month of rent as a security deposit, even if this did not happen. The new landlord would then be responsible to return this amount to the tenant upon the termination of the lease less itemized deductions.

7. Disputes On Security Deposits Are Heard In Small Claims Court.

Under Hawaii law, attorneys are not allowed to represent either party when there is a security deposit dispute which escalates to small claims court. The court can award up to 3x the amount of the security deposit plus legal costs if it determines a landlord has wrongfully and willfully retained all or part of a security deposit. Landlords can be awarded damages equal to the portion they retained lawfully plus their actual costs of the lawsuit.

8. Tenants Are Still Liable For Damages.

If a landlord does not return a security deposit or an itemized list of deductions within 14 days, they must return the entire deposit to the tenant. This does not excuse the tenant responsibilities for damages, cleaning costs, or unpaid rent that may have occurred from their occupancy. Landlords must sue for these costs, however, and they may not be entitled to recover legal costs from such an action at the court's discretion.

These key points of the security deposit laws in Hawaii can change periodically, so it is important to regularly check Section 44 of the Landlord and Tenant Codes to see what the expectations are for both parties in addition to checking guides like these. In doing so, you will be able to protect your rights and privileges whether you are a landlord or a tenant


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