Resolving Residential Landlord-Tenant Issues in Hawaii in the Wake of COVID-19

Resolving Residential Landlord-Tenant Issues in Hawaii in the Wake of COVID-19

| Jun 1, 2020 | Real Estate |

Covid

On April 16, 2020, as part of his Fifth Supplemental Emergency Proclamation, Governor David Ige declared an eviction moratorium for residential dwellings throughout Hawaii in response to COVID-19. The moratorium was issued pursuant to Hawaii’s Emergency Management law, Hawaii Revised Statutes chapter 127A:

Pursuant to section 127A-13(a)(3), HRS, in order for the county and state agencies to engage in emergency management functions as defined in section 127A-2, HRS, and to forestall any eviction from a residential dwelling for failure to pay rent or lease or other related charge, the following shall be suspended, as allowed by federal law.

    1. Chapter 127A-30(a)(2), HRS, rental or sale of essential commodities during a state of emergency; prohibition against price increases, to the extent it prevents the termination of any tenancy for a residential dwelling unit in the area that is the subject of the proclamation for breach of a material term of a rental agreement or lease resulting from a failure to pay all or any portion of the rent or lease, maintenance fees, utility charges, taxes or other fees required by the rental agreement or lease.
    2. Section 521-68, HRS, landlord’s remedies for failure by tenant to pay rent. These remedies include the landlord’s ability to demand payment of all rent due rent within 5 days, and, to terminate the tenancy and bring an action for summary possession to retake possession of the dwelling, if the full rent due is not received within the 5 day period.
    3. Section 521-71 HRS, termination of tenancy; landlord’s remedies for holdover tenants, which include the landlord’s right to terminate the tenancy by providing 45 days’ notice, and to seek twice the rental amount due for each day the tenant remains in possession past the termination date, in addition to bringing an action for summary possession, for which the landlord could recover legal fees and court costs. In addition, following the lease termination date holdover tenants are generally not entitled to 48 hours’ notice prior to a landlord entering the dwelling to inspect or make repairs.
    4. HRS Chapter 666, summary possession, landlord and tenant, to the extent necessary to prohibit the commencement, continuation, or prosecution of an action to terminate a tenancy for a residential dwelling unit, for failure to pay all or a portion of the rent, maintenance fees, utility charges, taxes or other fees required for the residential dwelling unit. This basically prevents a landlord from filing an action for summary possession while the emergency proclamation remains in effect.

Governor Ige extended the statewide eviction moratorium in his sixth, seventh, and eighth supplemental emergency proclamations. The moratorium remains in effect as of this writing. The question becomes what happens when the eviction moratorium is lifted? When is this likely to occur? Will we see a rush to the courthouse? Is the judiciary equipped to handle the potential onslaught of filings?

According to the most recent census data, over 40% of Hawaii households rent. The moratorium effects a vast number of residents, landlords and tenants, combined. With all of the uncertainty looming in the wake of the moratorium, it can be an effective solution for some landlords and tenants to work together now to forge agreements as to how their residential lease may be continued, altered, or terminated once the moratorium is lifted, and for how long.

This firm has worked with some landlords and tenants during the pandemic to craft tenancy settlement agreements. Both sides have expressed relief over the ability to reduce some of the uncertainty by creating their own terms, individualized for their unique situation, and designed with an eye towards avoiding costly and time-consuming legal proceedings that may loom in the future.

In forging a tenancy settlement agreement, it is important that both parties have realistic expectations about the financial burdens each party is currently in a position to shoulder and how both parties’ financial outlook may change in time. While many tenants may have lost their jobs or suffered a dramatic reduction in income, many landlords in Hawaii depend on rental income to survive and pay their bills. Mortgage deferrals are not often possible or cost-effective for landlords. Tenants may find a tenancy settlement agreement allows them to retain their dignity and not face an eviction proceeding. Landlords benefit by getting a clearer picture of their tenants’ realistic ability to address rental obligations, allowing them to plan, and by avoiding legal fees associated with summary possession filings which they may not be able to ever recover from an outgoing tenant who is unable to pay rent.

To be successful, it is important that both parties be respectful of the other’s circumstances, remain flexible, and open-minded. Terms should be clear-cut, spell out how and when the lease will be continued, modified, or terminated (when it is possible again to do so) the rights and obligations of both parties upon continuation or termination of the lease, as well as both parties’ intent to be bound.

To learn more, call Emily A. Gardner, Attorney at Law, LLLC, at 808-727-1220.