Hawaii-2024-SB2040-Introduced

SECTION 1. The legislature finds that the State has one of the highest percentages of renter households in the nation, with forty-three per cent of households in the State consisting of renters. The legislature recognizes that the State also has the least amount of affordable housing in the nation, resulting in thousands of Hawaii's families, many of whom are facing eviction, being unable to find alternative housing. The legislature further recognizes that evictions increase homelessness, unemployment, crime, and mental and physical illness. Further, children who experience an eviction often show signs of slower academic progress and other developmental impairments. Ultimately, each eviction results in significant financial and social costs to the evicted household and the surrounding community.

The legislature believes that eviction procedures must carefully balance the landlord's need for sufficient enforcement against the tenant's need for sufficient protection. The legislature further finds that without adequate safeguards, tenants can become targets for abuse during eviction proceedings. Currently, the residential landlord-tenant code makes it difficult for tenants to defend themselves against wrongful evictions. While the code clearly outlines landlords' responsibilities, it fails to provide tenants with suitable methods of recourse and ways to hold landlords accountable in various situations.

The legislature notes that leases, like other contracts, are reciprocal. The Hawaii supreme court has held that landlords cannot require a tenant to pay rent if the tenant does not receive the basic services to which they are entitled. While many states have passed laws specifying that tenants cannot be forced to pay rent for uninhabitable premises, the legislature has failed to formally recognize this principle, resulting in a lack of enforcement and numerous unjust and illegitimate evictions.

The legislature acknowledges that landlords are prohibited from retaliating against tenants who request repairs to their respective homes or complain about health or safety code violations. However, although the residential landlord-tenant code guarantees compensation for other landlord offenses, it also places on the tenant the burden of proving entitlement to compensation for a landlord's retaliation. The result is often that tenants who have been retaliated against are not made whole, allowing landlords to continue these retaliatory practices.

The legislature additionally finds that exposure to environmental hazards can cause serious harm to a child's health. Environmental hazards in poorly maintained housing can cause developmental delays, lower cognitive function, behavioral disorders, poor executive function, learning disabilities, neurobehavioral effects, hypertension, cancer, endocrine disorders, and many other long-term health problems. Socially and economically marginalized families are often most at-risk for these adverse effects since they have more language, time, and financial constraints. Ensuring a basic level of healthy housing will improve health, education, and achievement outcomes for the most vulnerable children while minimizing long-term costs to the State.

Accordingly, the purpose of this Act is to:

(1) Prohibit landlords from recovering possession of dwelling units from tenants if habitability of premises is significantly impaired;

(2) Set a tenant's liability for rent if habitability of premises is significantly impaired; and

(3) Provide remedies for unlawful retaliatory evictions.

SECTION 2. Section 521-42, Hawaii Revised Statutes, is amended to read as follows:

"§521-42 Landlord to supply and maintain fit premises. (a) The landlord shall at all times during the tenancy:

(1) Comply with all applicable building and housing laws materially affecting health and safety[;] with an affirmative duty to investigate and remediate health hazards;

(2) Keep common areas of a multi-dwelling unit premises in a clean and safe condition;

(3) Make all repairs and arrangements necessary to put and keep the premises in a habitable and safe condition[;] using licensed contractors certified by the State or federal government when disturbing hazardous substances such as, but not limited to lead and asbestos;

(4) Maintain all paint, electrical, plumbing, and other facilities and appliances supplied by the landlord in good working order and condition, subject to reasonable wear and tear;

(5) Except in the case of a single family residence, provide and maintain appropriate receptacles and conveniences for the removal of normal amounts of rubbish and garbage, and arrange for the frequent removal of [~~such~~] waste materials; and

(6) Except in the case of a single family residence, or where the building is not required by law to be equipped for the purpose, provide for the supplying of running water as reasonably required by the tenant.

Prior to the initial date of initial occupancy, the landlord shall inventory the premises and make a written record detailing the condition of the premises and any furnishings or appliances provided. Duplicate copies of this inventory shall be signed by the landlord and by the tenant and a copy given to each tenant. In an action arising under this section, the executed copy of the inventory shall be presumed to be correct. If the landlord fails to make [~~such~~] an inventory and written record, the condition of the premises and any furnishings or appliances provided, upon the termination of the tenancy shall be rebuttably presumed to be the same as when the tenant first occupied the premises.

(b) The landlord and tenant may agree that the tenant is to perform specified repairs, maintenance tasks, and minor remodeling only if:

(1) The agreement of the landlord and tenant is entered into in good faith and is not for the purpose of evading the obligations of the landlord;

(2) The work to be performed by the tenant is not necessary to cure noncompliance by the landlord with section 521-42(a)(1); and

(3) The agreement of the landlord and tenant does not diminish the obligations of the landlord to other tenants.

(c) If a landlord's failure to materially comply with subsection (a) results in the significant impairment of the habitability of the premises:

(1) No action or proceeding to recover possession of the dwelling unit may be maintained against the tenant, nor shall the landlord otherwise cause the tenant to be removed from the dwelling unit involuntarily; provided that:

(A) The tenant continues to pay rent equal to the fair rental value of the premises or the agreed upon rent, whichever is less; and

(B) The landlord's ability to recover possession of the unit is restored upon:

(i) Termination of the rental agreement in accordance with law or terms of the agreement; or

(ii) Restoration of the premises to a habitable condition,

whichever comes first; and

(2) The tenant's liability for rent, from the date of significant impairment, shall not exceed the fair rental value of the premises."

SECTION 3. Section 521-63, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) If the condition referred to in subsection (a) was caused wilfully or negligently by the landlord[,] or was the result of noncompliance with section 521-42(a), the tenant may recover any damages sustained as a result of the condition."

SECTION 4. Section 521-74, Hawaii Revised Statutes, is amended to read as follows:

"§521-74 Retaliatory evictions and rent increases prohibited. (a) Notwithstanding that the tenant has no written rental agreement or that it has expired, so long as the tenant continues to tender the usual rent to the landlord or proceeds to tender receipts for rent lawfully withheld, no action or proceeding to recover possession of the dwelling unit may be maintained against the tenant, nor shall the landlord otherwise cause the tenant to quit the dwelling unit involuntarily, nor demand an increase in rent from the tenant; nor decrease the services to which the tenant has been entitled, after:

(1) The tenant has complained in good faith to the department of health, landlord, building department, office of consumer protection, or any other governmental agency concerned with landlord-tenant disputes of conditions in or affecting the tenant's dwelling unit [~~which~~] that constitutes a violation of a health law or regulation or of any provision of this chapter; or

(2) The department of health or other governmental agency has filed a notice or complaint of a violation of a health law or regulation or any provision of this chapter; or

(3) The tenant has in good faith requested repairs under section 521-63 or section 521-64.

(b) Notwithstanding subsection (a), the landlord may recover possession of the dwelling unit if:

(1) The tenant is committing waste, or a nuisance, or is using the dwelling unit for an illegal purpose or for other than living or dwelling purposes in violation of the tenant's rental agreement;

(2) The landlord seeks in good faith to recover possession of the dwelling unit for immediate use as the landlord's own abode or that of the landlord's immediate family;

(3) The landlord seeks in good faith to recover possession of the dwelling unit for the purpose of substantially altering, remodeling, or demolishing the premises;

(4) The complaint or request of subsection (a) relates only to a condition or conditions caused by the lack of ordinary care by the tenant or another person in the tenant's household or on the premises with the tenant's consent;

(5) The landlord has received from the department of health certification that the dwelling unit and other property and facilities used by or affecting the use and enjoyment of the tenant were on the date of filing of the complaint or request in compliance with health laws and regulations;

(6) The landlord has in good faith contracted to sell the property, and the contract of sale contains a representation by the purchaser corresponding to paragraph (2) or (3); or

(7) The landlord is seeking to recover possession on the basis of a notice to terminate a periodic tenancy, which notice was given to the tenant previous to the complaint or request of subsection (a).

(c) Any tenant from whom possession has been recovered or who has been otherwise involuntarily dispossessed, in violation of this section, is entitled to recover the damages sustained by the tenant in an amount equal to not less than two months' rent and the cost of suit, including reasonable attorney's fees.

(d) Notwithstanding subsection (a), the landlord may increase the rent if:

(1) The landlord has received from the department of health certification that the dwelling unit and other property and facilities used by and affecting the use and enjoyment of the tenant were, on the date of filing of the complaint or request of subsection (a), in compliance with health laws and regulations;

(2) The landlord has become liable for a substantial increase in property taxes, or a substantial increase in other maintenance or operating costs not associated with the landlord's complying with the complaint or request, not less than four months prior to the demand for an increase in rent; and the increase in rent does not exceed the prorated portion of the net increase in taxes or costs;

(3) The landlord has completed a capital improvement of the dwelling unit or the property of which it is a part and the increase in rent does not exceed the amount [~~which~~] that may be claimed for federal income tax purposes as a straight-line depreciation of the improvement, prorated among the dwelling units benefited by the improvement;

(4) The complaint or request of subsection (a) relates only to a condition or conditions caused by the want of due care by the tenant or another person of the tenant's household or on the premises with the tenant's consent; or

(5) The landlord can establish, by competent evidence, that the rent now demanded of the tenant does not exceed the rent charged other tenants of similar dwelling units in the landlord's building or, in the case of a single-family residence or where there is no similar dwelling unit in the building, does not exceed the market rental value of the dwelling unit.

(e) Notwithstanding subsections (b) and (d) to the contrary, subsection (a) shall apply without exception if the department of health or other governmental agency has notified the landlord about a health hazard and recommended actions are incomplete."

SECTION 5. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	2040
THIRTY-SECOND LEGISLATURE, 2024
STATE OF HAWAII