Property Management Laws And Regulations In Hawaii

Hawaii regulates third-party property management through several authorities at once, and the rules that matter most to a management company are the ones covering your license, your client trust accounts, and the money you hold on behalf of owners and tenants. This guide covers those rules for professional managers, with the statute or agency regulation behind each one.

Everything below is sourced to Hawaii's own statutes, agency rules, and court materials rather than to secondhand summaries. Specific dollar amounts and deadlines do change; the citations do not, so you can always open the authority and confirm the current text before you act on it.

Licensing Requirements For Property Managers

Hawaii requires a real estate broker or salesperson license to manage real property for others for compensation, as this activity falls within the statutory definition of a real estate broker. The Hawaii Real Estate Commission, housed within the Department of Commerce and Consumer Affairs, administers licensing under HRS Chapter 467, while the Regulated Industries Complaints Office (RICO) investigates unlicensed activity. Narrow exemptions exist for property owners managing their own property, for a custodian or caretaker employed by a single owner, and for hotel operators, but a condominium association of owners does not count as a single owner for the caretaker exemption. Third-party companies managing rentals on behalf of multiple owners generally need brokerage licensure.

• A real estate broker is defined to include any person who, for compensation or valuable consideration, manages or offers to manage any real estate or improvements for others as a whole or partial vocation, which is the statutory basis for licensing property managers. (HRS § 467-1)
• The license exemption for a custodian or caretaker applies only to an individual employed by a single owner to manage or care for that owner's property, and by definition a single owner does not include an association of owners of a condominium, cooperative, or planned unit development. (HRS § 467-1 (definition of "Custodian or caretaker"))
• Licensing is not required for an owner (or a person acting under a power of attorney from the owner) who manages, leases, or rents that owner's own real estate, for a custodian or caretaker of a single owner's property, or for a person who manages or operates a hotel. (HRS § 467-2)
• The principal broker of a brokerage firm has direct management and supervision responsibility over the firm and its licensees, including responsibility for client trust accounts, disbursements from those accounts, and the firm's accounting practices. (HRS § 467-1.6(a), (b)(1))
• DCCA guidance for rental property owners states that owners may self-manage their own property, employ a custodian or caretaker, or hire a licensed real estate broker or salesperson, and that a real estate license is required to lease, rent, or manage real property for others in Hawaii. (HRS §§ 467-1, 467-2 (as summarized in agency guidance))

Client Trust Account Rules

Every Hawaii brokerage firm handling rents, deposits, or other client funds must keep them in a dedicated trust fund account at a federally insured depository, deposited by the next business day after receipt, with the principal broker designated as trustee. Commingling client funds with the firm's own operating funds is prohibited, detailed transaction records must be kept for at least three years and are subject to Real Estate Commission inspection, and the principal broker bears direct personal responsibility for the trust account and its accounting practices. A principal broker may delegate custody of trust funds to a broker-in-charge, but the two remain jointly responsible.

• A brokerage firm that does not immediately place entrusted funds into a neutral escrow depository must maintain a trust fund account at a federally insured bank or depository in Hawaii, with the principal broker designated as trustee. (Hawaii Administrative Rules (HAR) § 16-99-4(a))
• Every brokerage firm must deposit or place trust funds received, such as rental income and security deposits, into a neutral escrow depository or a trust fund account by the next business day following receipt, and that depository must be located in the same state as the property. (HAR § 16-99-4(d))
• The principal broker or broker-in-charge is prohibited from commingling client funds with other moneys, and commingling includes keeping undisputed management fees or other fees in the client trust account beyond a reasonable time after they have been earned. (HAR § 16-99-4(h))
• Every brokerage firm must retain trust fund records for at least three years, and the records must clearly show the names of persons from whom funds were received and to whom disbursed, dates and amounts of each transaction, and the purpose of the funds, all subject to inspection by the Commission. (HAR § 16-99-4(b))
• A principal broker may allow a broker-in-charge to have custody and control of trust properties, but the principal broker and broker-in-charge are jointly responsible for any trust properties the principal broker authorizes the broker-in-charge to handle. (HAR § 16-99-4(k))
• The principal broker is directly responsible for the brokerage firm's client trust accounts, disbursements from those accounts, and the firm's accounting practices. (HRS § 467-1.6(b)(1))

Trust account rules are where Hawaii management companies get into trouble fastest, because a shortage is a licensing problem and not just a bookkeeping problem. The habits that keep you clean are the boring ones: deposit on time, never let operating money and client money mix, reconcile every account every month, and keep a per, property record you could hand to an auditor without preparing it first. Our guide to preparing for a trust account audit walks through what examiners actually ask for.

Security Deposit Rules

Hawaii caps a residential security deposit at one month's rent, with an optional additional pet deposit of up to one more month's rent that cannot be charged to tenants without pets or to tenants using an assistance animal as a disability accommodation. The statute does not require landlords to pay interest on security deposits. Landlords must return the deposit, or provide written notice itemizing amounts retained with supporting documentation, within 14 days after the rental agreement terminates, and missing that 14 day deadline forfeits the landlord's right to retain any of it.

• A landlord may require a security deposit of not more than one month's rent, plus an additional pet damage deposit of not more than one month's rent, which cannot be charged to a tenant without a pet or for an assistance animal that is a reasonable accommodation for a disability. (HRS § 521-44(b))
• At termination of the rental agreement, if the landlord intends to retain any part of the security deposit, the landlord must notify the tenant in writing with the particulars and grounds for retention, including written evidence such as invoices or receipts, and return the deposit or balance not later than 14 days after termination of the rental agreement. (HRS § 521-44(c))
• If the landlord fails to furnish the required written notice and supporting information within 14 days after termination of the rental agreement, the landlord forfeits the right to retain the security deposit and must return the entire amount to the tenant. (HRS § 521-44(c))
• Disputes over retention of a security deposit may be brought in the small claims division of the district court, and if the court finds the landlord wrongfully and wilfully retained the deposit, it may award the tenant treble damages equal to three times the amount wrongfully retained plus costs of suit; a wrongful but non-wilful retention results in an award equal to the amount retained plus costs. (HRS § 521-44(g), (h))
• The statute does not require a landlord to pay interest on a residential security deposit, and no such requirement appears anywhere in HRS section 521-44. (HRS § 521-44)

Lease Agreements And Required Disclosures

Hawaii law requires landlords to disclose in writing, at or before the start of tenancy, the identity and address of anyone authorized to manage the premises and of the owner or the owner's authorized agent for service of process and receipt of rent. If there is a written rental agreement, the landlord must give the tenant a signed copy, and the landlord must give the tenant a written receipt for rent paid. A distinctive requirement for third-party managers is that any owner or landlord who lives outside the state, or on a different island from the rental unit, must designate on the written rental agreement an on-island agent authorized to act on the owner's behalf.

• A landlord, or any person authorized to enter into a rental agreement on the landlord's behalf, must disclose to the tenant in writing at or before commencement of tenancy the name and address of each person authorized to manage the premises and of each person who is an owner or authorized to act for the owner for service of process and receiving rents, notices, and demands. (HRS § 521-43(a))
• In the case of a written rental agreement, the landlord must furnish a copy of the lease or rental agreement to the tenant, and the landlord must furnish the tenant a written receipt for rent paid at the time of payment. (HRS § 521-43(d), (e))
• Any owner or landlord who resides outside the State or on a different island from where the rental unit is located must designate, on the written rental agreement, an agent residing on the same island as the unit to act on the owner's or landlord's behalf. (HRS § 521-43(f))
• A landlord or agent who fails to make the required disclosures becomes an agent of the landlord for purposes of service of process and for performing the landlord's obligations under the chapter and the rental agreement. (HRS § 521-43(b))
• Landlords must provide their general excise tax number to tenants for the purpose of the tenant filing for a low-income housing tax credit. (HRS § 521-43(h))

Entry Notice And Tenant Privacy

Hawaii's landlord-tenant code requires landlords to give tenants at least two days' notice before entering a dwelling unit to inspect, make repairs, or show the unit, except in emergencies or when notice is impracticable, and entry may only occur during reasonable hours. Outside of these purposes, a landlord has no right of entry except by court order, unless the tenant has abandoned the unit or during a permitted extended-absence entry.

• The tenant may not unreasonably withhold consent for the landlord to enter to inspect the premises, make necessary or agreed repairs or improvements, supply agreed services, or show the unit to prospective purchasers, mortgagees, or tenants. (HRS § 521-53(a))
• Except in an emergency or where impracticable, the landlord must give the tenant at least two days' notice of intent to enter and may enter only during reasonable hours, and the landlord may not abuse the right of access or use it to harass the tenant. (HRS § 521-53(b))
• The landlord has no other right of entry except by court order, unless the tenant appears to have abandoned the premises or as permitted under the extended-absence provisions of the code. (HRS § 521-53(c))

Rent, Late Fees, And Other Charges

Hawaii has no general statewide rent control for residential rentals, and the landlord-tenant code lets landlords and tenants agree to any lawful consideration as rent. State law does preserve county authority to enact emergency rent-control ordinances tied to a declared housing-shortage emergency, but that is a narrow, county-level exception rather than a statewide rent cap. The code sets minimum advance-notice periods before a landlord can raise rent on a periodic tenancy, but does not set a statutory cap on late fees.

• The landlord and tenant may agree to any consideration, not otherwise prohibited by law, as rent, and in the absence of agreement the tenant pays the fair rental value. (HRS § 521-21(a))
• For a month-to-month tenancy, rent may not be increased without written notice given at least forty-five consecutive days before the effective date of the increase; for a tenancy of less than month to month, at least fifteen consecutive days' notice is required. (HRS § 521-21(d), (e))
• Nothing in the district court landlord-tenant chapter authorizes evicting a tenant contrary to a county rent-control ordinance declaring an emergency arising out of a housing shortage, but this provision only preserves county emergency-ordinance authority under separate county-powers statutes rather than imposing a statewide rent control scheme. (HRS § 666-20)
• HRS Chapter 521 contains no provision setting a statutory cap or specific formula for residential late rent fees. (HRS Chapter 521, Part II (Rental Agreements))

Fee income is also taxable income, and how you record management fees, late fees, and pass, through charges affects both your compliance position and your books. See our guide to Hawaii property management taxes for the reporting side.

Fair Housing Obligations

Hawaii's fair housing law, enforced by the Hawaii Civil Rights Commission, prohibits discrimination in real estate transactions on a list of protected bases that is substantially broader than the federal Fair Housing Act. In addition to race, color, religion, sex, and familial status, Hawaii law expressly adds sexual orientation, gender identity or expression, marital status, ancestry, age, and HIV infection as protected categories, and separately bars requiring an HIV test as a condition of a real estate transaction.

• It is a discriminatory practice for an owner, any other person engaging in a real estate transaction, or a real estate broker or salesperson to discriminate because of race, sex including gender identity or expression, sexual orientation, color, religion, marital status, familial status, ancestry, disability, age, or HIV infection. (HRS § 515-3)
• Prohibited discriminatory practices include refusing to engage in a real estate transaction, discriminating in the terms or conditions of a transaction, failing to transmit a bona fide offer, and steering a person seeking to rent or buy. (HRS § 515-3(1)-(5))
• It is unlawful to solicit or require, as a condition of engaging in a real estate transaction, that a buyer, renter, or lessee be tested for HIV infection. (HRS § 515-3)
• A landlord or agent must refuse to permit reasonable modifications to existing premises at a disabled tenant's own expense only in limited circumstances, and must make reasonable accommodations in rules, policies, practices, or services when necessary for a person with a disability to have equal use and enjoyment of the housing, subject to reasonable restrictions on animal-based accommodations. (HRS § 515-3)
• The Hawaii Civil Rights Commission's implementing rules define terms used in the fair housing rules, including "ancestry" (national origin or an ethnic group's characteristics) and "age" (over the age of majority or an emancipated minor), for purposes of enforcing chapter 515. (Hawaii Administrative Rules § 12-46-302)

Habitability And Safety Duties

Hawaii's landlord-tenant code requires landlords to keep rental premises in compliance with health and safety codes and in habitable condition throughout the tenancy, covering structural repairs, common-area cleanliness, and working electrical, plumbing, and other supplied systems. Landlords must also document the unit's move-in condition in a signed inventory, or risk a presumption that any damage found at move-out already existed at move-in. Separately, the code bars landlords from retaliating against tenants who complain about code violations or request repairs, and bars self-help evictions through cutting off essential utilities.

• The landlord must at all times during the tenancy comply with applicable building and housing laws materially affecting health and safety, keep common areas clean and safe, make repairs necessary to keep the premises habitable, and maintain electrical, plumbing, and other supplied facilities and appliances in good working order. (HRS § 521-42(a))
• Prior to initial occupancy the landlord must inventory the premises and make a written, signed record of the condition of the premises and any furnishings or appliances; if the landlord fails to do so, the condition of the premises at termination is rebuttably presumed to be the same as when the tenant first occupied it. (HRS § 521-42(a))
• A landlord may not bring an action to recover possession, cause a tenant to quit involuntarily, demand a rent increase, or decrease services after a tenant has complained in good faith about a health or housing code violation to a government agency, or after the tenant has requested repairs, subject to specific listed exceptions such as the tenant committing waste or the landlord's good faith need to occupy or demolish the unit. (HRS § 521-74(a), (b))
• A tenant from whom possession is recovered, or who is otherwise involuntarily dispossessed, in violation of the retaliation provisions is entitled to recover damages sustained plus the cost of suit, including reasonable attorney's fees. (HRS § 521-74(c))
• A landlord may not recover or take possession of a dwelling unit by wilfully interrupting or diminishing running water, hot water, electricity, gas, or other essential services contrary to the rental agreement or the habitability section, except in case of abandonment or surrender. (HRS § 521-74.5)

Eviction Basics

Hawaii evictions are brought as a "summary possession" action in district court under HRS Chapter 666, which works together with the notice requirements in the Residential Landlord-Tenant Code. For nonpayment of rent, the landlord must give written notice giving the tenant not less than five business days after receipt to pay before the rental agreement can be terminated. For a tenant's material noncompliance with maintenance or use obligations, the landlord generally must give written notice with at least ten days to remedy before terminating and filing for possession.

• For nonpayment of rent, the landlord may demand payment and notify the tenant in writing that unless payment is made within a time stated in the notice, not less than five business days after receipt, the rental agreement will be terminated; if the tenant remains in default, the landlord may bring a summary proceeding for possession. (HRS § 521-68(a))
• For a tenant's material noncompliance with maintenance or use obligations, the landlord must notify the tenant in writing of the noncompliance and allow at least ten days after receipt of the notice to remedy it before terminating the rental agreement and bringing a summary proceeding for possession, except that no cure period is required if the noncompliance causes or threatens irremediable damage. (HRS § 521-69(a))
• Eviction proceedings in Hawaii are brought as "summary possession" actions in district court, a process governed by HRS Chapter 666 (Landlord and Tenant), which operates alongside the Residential Landlord-Tenant Code in Chapter 521. (HRS Chapter 666, Part I)

Staying Compliant Without Guessing

Most Hawaii compliance failures are not decisions, they are drift: a deposit that sat too long, a reconciliation that got skipped in a busy month, a lease template that never got updated after a statute changed. Build the calendar first. Monthly trust reconciliations, an annual review of your lease and disclosure packet against current statutes, and a documented process for deposits and refunds cover the large majority of what an examiner will ask about.

This guide is a starting point for professional managers, not legal advice. For a specific dispute, a novel fact pattern, or anything with real money at stake, work with a Hawaii attorney, and confirm the current text of any statute cited above with the Hawaii Real Estate Commission or the Hawaii legislature.

Sources

Every fact above is drawn from one of the official sources below.

• HRS § 467-1, Hawaii DCCA Real Estate Branch (Hawaii Revised Statutes Chapter 467)
• HRS §§ 467-1, 467-2 (as summarized in agency guidance), Hawaii DCCA Regulated Industries Complaints Office (RICO)
• Hawaii Administrative Rules (HAR) § 16-99-4(a), Hawaii Real Estate Commission, Hawaii Administrative Rules Title 16, Chapter 99
• HRS § 521-44(b), Hawaii State Legislature (Hawaii Revised Statutes)
• HRS § 666-20, Hawaii State Legislature (Hawaii Revised Statutes)
• HRS § 515-3, Hawaii State Legislature (Hawaii Revised Statutes)
• Hawaii Administrative Rules § 12-46-302, Hawaii Civil Rights Commission