Why a Landlord Must Tailor the Standard Hawaii Rental Agreement
The Hawaii Rental Agreement produced by the Hawaii Association of Realtors has become the standard form used in renting Hawaii real estate. Although I believe in using well-crafted, standard documents for real estate transactions, they all can be tailored to better suite my clients. During negotiations I can often times delete language or add language that does not “kill the deal” for my client.
A good example of how the standard Hawaii Rental Agreement actually hurts landlords in a particular situation is when the fixed rental period ends on a particular date. Many times a landlord tells me that he/she will have a new tenant move in on the day after the fixed rental period ends because the incoming tenant will be paying more rent and the current tenant is trouble.
The problem for the landlord is they did not carefully read the Hawaii Rental Agreement and did not tailor the Rental Agreement to favor the landlord.
Paragraph 5 does say the “Fixed Rental Agreement which, unless otherwise agreed to in writing, will end on _________________.” However, the last sentence of Paragraph 16.H provides, “If TENANT stays in the Unit after TENANT’S Rental Agreement is ended, TENANT will be a HOLDOVER TENANT and may be liable for twice the monthly rent under the Rental Agreement on a prorated daily basis for each day TENANT is a HOLDOVER TENANT.”
Thus, the tenant may not vacate the premises at the end of the rental period, and in fact may stay longer. The failure of the tenant to vacate may result in the landlord being in breach with the new, incoming tenant.
The consolation to the landlord is supposed to be the financial penalty to the tenant for staying beyond the rental period. Many landlords think they are entitled to twice the rent. The problem with that conclusion is the Rental Agreement uses the word “may be liable for twice the monthly rent under the Rental Agreement”.
The word “may” is a problem for the landlord. When I represent the landlord I replace the word” may” with the word “shall”.
As you can see standardized forms are beneficial, but only up to a point.
Contact us for a consultation. We'll guide you through this process and tailor the Hawaii Rental Agreement.
Article written by Nathan Natori