USA – HAWAII Law and Practice Contributed by: Jon Pang, Lisa Broulik and Matthew Cohen, Case Lombardi, A Law Corporation
mination is typically permitted only where the breach is material. By contrast, it is not customary for commercial leases to expressly define events of landlord default permit - ting termination by a tenant. However, common law principles for breach of contract may apply, including a remedy of termination if the landlord fails to perform under the lease (eg, failure to maintain). Hawaiʻi’s “Landlord-Tenant Code” codifies the com - mon law implied warranty of habitability for residen - tial leases. The implied covenants of quiet enjoyment and the duty of care also apply to both commercial and residential leases, potentially affording a tenant a right of termination if the landlord breaches such covenants. 6.20 Registration Requirements For Regular system (“race-notice”) property, leases with a term of one year or more are required to be recorded; otherwise, such leases are void against a third party transacting in good faith and for a valuable consideration, not having actual notice of the con - veyance and whose conveyance is first recorded (see HRS Section 502-83). For Land Court system (“pure race”) property, leases with a term of one year or more are required to be recorded in order to be effective to bind the land, but are still contracts between the parties in any event (see HRS Section 501-101). In most cases, the entirety of the lease itself is not typi - cally recorded, with long-term ground leases being an exception. It is more customary for parties to record a “short-form” or “memorandum of lease”. The Bureau of Conveyances charges different record - ing fees for documents recorded in the Regular and Land Court systems, with fees varying based on the number of pages in the document. 6.21 Forced Eviction Commercial leases typically set forth a list of events of default by the tenant that entitle the landlord to rem- edies, including summary possession proceedings and termination of the lease. However, regardless of whether or not the lease expressly identifies summary possession as a remedy, landlords have a statutory right to seek to evict a tenant by pursuing a summary
possession action. If the court determines that the landlord is entitled to possession of the premises, the court will grant the landlord a judgment of possession and writ of possession. The writ of possession will authorise a sheriff to physically evict the tenant and restore possession to the landlord. Summary posses - sion proceedings in Hawaiʻi typically take anywhere from several weeks to several months, or longer. 6.22 Termination by a Third Party A commercial lease may be terminated when the government exercises its eminent domain power in a condemnation proceeding. However, the government must provide just compensation when taking private property. Commercial leases typically include a “condemna - tion” provision, which typically provides that the lease will terminate as of the date the condemning author - ity receives possession or acquires the right to pos - session. This provision often distinguishes between a substantial taking and a partial taking, and may ascer - tain whether either party has the right to terminate the lease in the event of a partial taking of the demised premises. It also usually specifies how much of the compensation from the condemning authority is to be allocated between the landlord and the tenant. How - ever, in most cases, the landlord retains all compensa - tion from the condemning authority, and the tenant is not entitled to any portion of the condemnation award. HRS Chapter 516 also allows lessees of long-term residential leases to initiate the condemnation of the fee interest, allowing them to purchase the land under their homes. 6.23 Remedies/Damages for Breach In the event of a tenant’s breach and the termination of a commercial lease, the landlord may seek dam - ages, which can include past due rent, default interest and late charges on such past due rent, legal fees, and costs incurred by the landlord in connection with the re-leasing of the premises, including broker fees. Commercial leases are not subject to the state’s usury law and there is no specified limit on the interest rate charged. However, landlords are required to mitigate their damages by common law.
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