HB2575 HD1.DOC

SECTION 1. In most cases, landlords in Hawaii are able to increase the rent on rental units without much concern over whether the unit will sit vacant because of the scarcity of affordable housing. Even if a landlord's current tenant cannot afford the increased rent on a rental unit, there is likely another tenant willing to take the current tenant's place.

While turnover in tenants as a result of increased rents benefits the landlords and property owners, it does not always benefit the community. Tenants who know that they could be priced out of their current residence have no incentive to invest in their community. If rents were stable and tenants could be assured that they would face only reasonable increases, then tenants may stay in their rental units longer and invest in the community around them.

The legislature finds that tenants need some semblance of housing security but landlords and property owners also need the ability to increase their rents by a reasonable amount. The legislature further finds that the policy of rent stabilization, which is distinct from a policy of rent control, could simultaneously respond to those opposing needs.

The purpose of this Act is to establish a rent stabilization law that will apply to all rental units located in structures that are over a certain age.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

RENT STABILIZATION

§ -1 Definitions. For purposes of this chapter, unless context requires otherwise:

"Action" means the same as the term is defined in section 521-8.

"Department" means the department of commerce and consumer affairs.

"Dwelling unit" means the same as the term defined in section 521-8.

"Family" includes a family of one.

"Landlord" means the same as the term is defined in section 521-8.

"Owner" means the same as the term defined in section 521-8.

"Rental agreement" means the same as the term defined in section 521-8.

"Single family residence" means the same as the term defined in section 521-8.

"Tenant" means the same as the term defined in section 521-8.

§ -2 Application. (a) The provisions of this chapter shall apply to all dwelling units designed for rental use or rented, including dwelling units that are subleased by tenants, at any time on or after July 1, 2018, except for dwelling units listed in subsection (b).

(b) The provisions of this chapter shall not apply to:

(1) A dwelling unit in a single family residence; provided that the single family residence does not rent more than dwelling units to families who are not related to the property owner by blood, marriage, or adoption;

(2) Dwelling units located in structures less than years old; provided that:

(A) The structure did not replace a structure that provided dwelling units for rent; and

(B) The tenants that rented dwelling units in the previous structure were not evicted for the purpose of allowing the property owner to build the current structure;

(3) Accommodations in hotels, motels, and inns that are primarily rented to guests for a period of thirty days; provided that the same tenant has not occupied one or more of the dwelling units in a single structure for more than thirty consecutive days;

(4) A dwelling unit that is owned, operated, or managed by a government unit, agency, or authority for purposes of providing housing to low-income, very low-income, or extremely low-income households; and

(5) A dwelling unit in an institution that is monitored or licensed by the State, and provides medical, geriatric, or educational services.

§ -3 Monthly rent increases. (a) A landlord of a dwelling unit subject to a rental agreement shall be permitted to increase a dwelling unit's monthly rent by a maximum
of per cent at the end of the term of the rental agreement, or every twelve months. The recalculated, increased monthly rent shall be in effect for a term established by the new rental agreement and shall be the monthly rent used to calculate future rent increases.

(b) A landlord shall be permitted to increase the monthly rent for a dwelling unit beyond the restrictions in subsection (a) after the dwelling unit is vacated by all tenants. There shall be no limit to the monthly rental amount that a landlord may charge for a dwelling unit following the vacancy of the dwelling unit by all tenants.

§ -4 Remedies. (a) A tenant or the department may file for a civil action to enforce the provisions of this chapter.

(b) A tenant may refuse to pay an increase in rent that is in violation of the provisions of this chapter and such violation shall be a defense in any action brought to recover the possession of a dwelling unit or to collect rent.

(c) Whenever it is necessary for a tenant of a dwelling unit to file a court action to recover the payment of rent which was in excess of the maximum lawful rent allowed by the provisions of this chapter, or whenever it is necessary for the tenant to defend against any wrongful action filed in court against the tenant by the landlord to recover the possession of the tenant's dwelling unit, the landlord shall be liable to the tenant for damages in the amount of $ or not more than three times the amount by which the payment demanded, accepted, received, or retained exceed the lawful amount of rent, whichever is more. The prevailing party in any such suit shall be entitled to reasonable attorney's fees and costs as determined by the court."

SECTION 3. This Act shall take effect on January 1, 2050.

HOUSE OF REPRESENTATIVES	H.B. NO.	2575
TWENTY-NINTH LEGISLATURE, 2018		H.D. 1
STATE OF HAWAII