In most rental markets, real estate investors and landlords who live out-of-state have the option of choosing a local property manager or taking care of their property on their own, from wherever they are.

In Hawaii, the laws are a little bit different. Local property management isn’t an option – it’s a legal requirement.

A lot of landlords aren’t aware of this law, and that can get them into some expensive legal trouble. If you’re not already working with a Hawaii property management company and you live on a different island or in a different state than where your investment property is located, you’ll want to make sure you’re following the law and complying with its requirements.

Local Hawaii Property Management

Hawaii Revised Statutes Section 521-43(f) states the following:

“Any owner or landlord who resides out of State or on another island from where the rental unit is located shall designate on the written rental agreement an agent residing on the same island where the unit is located to act in the owner’s or landlord’s behalf.”

This is an important legal requirement. If you own a rental home and you’re not living in Hawaii, you have to hire a local property manager on the same island as your property.

Laws like this often seem restrictive and prohibitive, but it actually is designed to protect you, your tenants, and your investment. Managing rental property from afar is difficult. When you have someone in the same area, you will enjoy a lot more peace of mind. You’ll know that your experienced property manager can get over to the property within minutes if there’s an emergency. You’ll know someone who understands the local laws and rental trends is there to manage marketing, showings, tenant screening, and routine maintenance.

Hawaii Lease Agreements and Rental Contracts

As a result of this statewide law, you have to designate a property manager on your Hawaii lease agreement. A good rental experience starts with a strong lease. Check the agreement you’re currently using, and if it doesn’t reflect your property management company, make sure you revise it. We can help you if you aren’t sure where to find a template or how to incorporate the right language.

Review your property management agreement as well. You should only work with a Hawaii property manager who understands this law and all other laws pertaining to your rental property. You’re hiring a local professional to lease, manage, and maintain your rental property. Make sure you’re getting all the expertise you need; it’s important to do more than just check off this requirement. You need experience and professionalism.

Every management agreement is unique, and each property manager will have their own way of operating. However, you want to be sure your management agreement includes things like:

  • Dates and terms of the management agreement and relationship.
  • Specific scope of work for your property manager.
  • Authority and restrictions as a legal agent.
  • Accounting, bookkeeping, and financial duties of the manager.
  • Communication processes between owner and manager and tenant and manager.
  • Fees and costs of property management.
  • Liability and insurance required by both parties.

We have been managing rental properties in Hawaii for years, and we understand how to effectively and efficiently care for your investment. Contact us at Hawaiian Dream Properties for more information.