Renting Out Your Property in Hawaii: A Guide for Landlords

Familiarize yourself with Hawaii's Residential Landlord-Tenant Code (Chapter 521). This code outlines your rights and responsibilities as a landlord in Hawaii. Pay special attention to security deposit limits (maximum one month's rent), required disclosures, and tenant rights. The Hawaii Public Housing Authority website and the Legal Aid Society of Hawaii offer helpful resources.

Check with your county government to determine if you need a business license to operate a rental property. Requirements vary by county (Honolulu, Hawaii, Maui, Kauai). If your property is in a vacation area, verify if you need a Transient Accommodations Tax (TAT) license from the Hawaii Department of Taxation, even for long-term rentals.

Register with the Hawaii Department of Taxation to obtain a General Excise Tax (GET) license. All rental income in Hawaii is subject to GET, currently at 4.5% on Oahu and 4% on neighbor islands. You'll need to file periodic GET returns and remit taxes collected.

Verify that your property is zoned for rental use with your county planning department. If your property is part of a homeowners association (HOA) or condominium association, review their rules regarding rentals. Some may have restrictions on rental terms or require approval before renting.

Create a rental application to collect information from potential tenants. Include sections for personal information, rental history, employment details, income verification, references, and authorization for background and credit checks. Ensure your screening process complies with Fair Housing laws, which prohibit discrimination based on protected characteristics.

Develop a detailed checklist to document the condition of the property before move-in and after move-out. Include all rooms, fixtures, appliances, and exterior areas with space to note condition and take photos. This documentation is crucial for security deposit disputes and should be signed by both parties.

For properties built before 1978, federal law requires landlords to provide tenants with a lead-based paint disclosure form and the EPA pamphlet 'Protect Your Family from Lead in Your Home.' Even if you're unsure about lead paint, you must provide this disclosure for pre-1978 buildings.

Create a receipt for security deposits that includes the amount received, date of receipt, and a statement explaining that the deposit (maximum one month's rent in Hawaii) will be held in a separate account. Hawaii law requires landlords to return deposits within 14 days of lease termination with an itemized statement for any deductions.

Develop clear rules for your rental property covering noise restrictions, maintenance responsibilities, pet policies, smoking policies, and other important guidelines. Rules must be reasonable and cannot contradict terms in the lease or Hawaii landlord-tenant law. Provide these rules to tenants before they sign the lease.

Prepare a form to notify tenants when you need to enter the property. Hawaii law requires landlords to provide at least 48 hours' notice before entering a rental unit except in emergencies. The form should include the date, time, and purpose of entry.

Create a comprehensive lease agreement that complies with Hawaii law. Include terms for rent amount and due date, lease duration, security deposit terms, maintenance responsibilities, and required disclosures. Hawaii has specific requirements regarding disclosures about flood zones, military ammunition, and other hazards that must be included.

Obtain landlord insurance (also called dwelling fire or DP policy) that covers the building, liability protection, and potentially lost rental income. Standard homeowner's insurance doesn't cover rental activities. Consider requiring tenants to obtain renter's insurance as part of your lease terms.

Research and prepare any Hawaii-specific disclosures required for your property location. These may include flood zone notifications, presence of military ammunition in the area (for properties near military installations), and disclosure of any known hazardous conditions on the property.

Set up a system for collecting and tracking rent payments. Consider online payment options, which are increasingly expected by tenants. Document your late fee policy, ensuring it complies with Hawaii law (fees must be reasonable and specified in the lease).

Establish a clear procedure for tenants to report maintenance issues. Hawaii law requires landlords to keep rental properties in habitable condition. Document your process for responding to maintenance requests and keep records of all repairs and communications.