If you’re offering a rental property for the first time, adding a security deposit to the lease or rental agreement will provide you with many benefits. However, you also need to keep in mind the requirements set by the state of Hawaii. Find out what you need to know in the guide below.
Benefits of Security Deposits
Tenants pay security deposits in addition to the first month’s rent when they move in. The deposit protects you from paying out of pocket for damage incurred by the tenant. You can also use it if the tenant leaves and still owes you rent or utility bills. Although Hawaii law doesn’t require you to keep the deposit in a separate account, you should do so for good record-keeping, to gain interest, and to make sure it’s available when the tenant moves out.
Hawaii Law Governing Security Deposits
In Hawaii, the landlord may ask for up to one month’s rent as a security deposit. The landlord must return the deposit within 14 days of the tenant’s vacancy to their last known address. To save time and headaches, get a forwarding address from your renters when they give notice.
You are not required to give the deposit back if the tenant breaks the lease or is absent from the rental property with no explanation for longer than 20 days. Deposits can be used to cover non-payment of rent or utilities or damage above and beyond normal wear and tear. An itemization of use must be given to the tenant within the 14 days. If you fail to refund the deposit within the required time, the tenant may sue you for up to three times the amount of the deposit plus legal fees.
For professional assistance managing security deposits and other tenant issues for your rental property, turn to Classic Maui Properties in Pukalani, HI. Led by an industry veteran with over 39 years of experience, these experts in the Maui real estate market can help you buy or sell a home as well. Call (808) 878-1001 to discuss a property, or visit their website to learn more about their offerings.