HB2188 HD1

SECTION 1. This Act shall be known and may be cited as the Hawaii Tenant Screening Fairness Act.

SECTION 2. The legislature finds that low-income households and people experiencing homelessness face numerous barriers in the rental housing market. Typically, prospective tenants often apply for as many open rentals as possible due to the significant competition for these rental units. While the legislature recognizes that landlords and their agents have a legitimate interest in screening applicants, reducing the number of transactions in which applicants must pay a screening fee will reduce housing costs and improve access to rental housing.

The legislature further finds that to help individuals and families seeking rental housing in the State, the legislature enacted Act 200, Session Laws of Hawaii 2023, which authorizes an application screening fee for rental applications and requires costs associated with vetting an application to be used only for that purpose and the return to the applicant of any remaining fees. However, an applicant may still be required to submit application fees to multiple landlords or their agents, who are using those fees to obtain similar information.

The legislature additionally finds that tenant screening companies provide tenant screening reports to landlords and their agents, and the tenant screening reports from tenant screening companies are trusted and validated tools for screening applicants. In many instances, applicants pay each landlord or their agent to whom they are applying for housing a fee for the landlord or agent to obtain a screening report.

The legislature further finds that many tenant screening companies already allow applicants to purchase a tenant screening report. The applicant will have an opportunity to see what is in the screening report and correct any errors that appear in the report. Once the applicant purchases a tenant screening report, at the applicant's direction, the tenant screening company will provide the screening report directly to as many landlords or their agents as the applicant desires for thirty days at no additional cost. The legislature finds that because the screening report is provided directly to the landlord or their agent by a trusted third-party, the risk of tampering with screening reports is virtually eliminated.

The legislature also finds that requiring landlords and their agents to accept the tenant screening reports from a tenant screening company would reduce the cost to the applicants. The tenant screening companies that provide these services are trusted by many landlords and agents to protect sensitive data, ensuring privacy for the applicant, and bear the risk when failing to do so. Because the tenant screening companies are trusted to faithfully carry out the service when the landlord makes the request for a tenant screening report, they should be trusted by landlords to faithfully carry out the service when the applicant requests the report be provided to the landlord.

Accordingly, the purpose of this Act is to require residential landlords and their agents to accept comprehensive reusable tenant screening reports from applicants and establish remedies for a landlord's or agent's refusal to accept such reports.

SECTION 3. Chapter 521, Hawaii Revised Statutes, is amended by adding a new section to part VI to be appropriately designated and to read as follows:

"§521- Remedies for violations of comprehensive reusable tenant screening report obligations. If a landlord or landlord's agent refuses to accept a comprehensive reusable tenant screening report from an applicant in violation of section 521-46(a)(3):

(1) The landlord or landlord's agent shall be liable to the applicant for $250 plus reasonable attorney's fees and costs;

(2) The landlord or landlord's agent shall be subject to a fine of no more than $250 that may be assessed in an action brought by the applicant or in an action brought by the office of consumer protection; and

(3) The landlord or landlord's agent shall be subject to a fine of no more than $500 if the landlord or landlord's agent has committed two or more prior violations of section 521-46(a)(3) within ten years of the instant violation, which may be assessed in an action brought by the office of consumer protection."

SECTION 4. Section 521-46, Hawaii Revised Statutes, is amended to read as follows:

"[[]§521-46[]] Application screening fee[.]; comprehensive reusable tenant screening reports. (a) When a landlord or the landlord's agent receives a request from an applicant to rent a dwelling unit, the landlord or [~~the~~] landlord's agent may charge the applicant an application screening fee at the time the application is processed for the dwelling unit to cover the costs of obtaining information about the applicant; provided that [a]:

(1) A landlord or the landlord's agent shall only charge an application screening fee for an applicant who is eighteen years of age or older or an emancipated minor[.];

(2) Before taking action relating to an application screening for which a landlord or landlord's agent would expect to collect an application screening fee, a landlord or landlord's agent shall disclose to an applicant that the applicant has the right to provide to the landlord or landlord's agent a comprehensive reusable tenant screening report; provided that the disclosure shall be provided in a location and in a manner reasonably likely to reach applicants, including:

(A) In advertisements and other public notices of the dwelling unit's availability, displayed in at least twelve-point, boldface type, unless the size, format, or display requirements of the advertisements or other public notice make this requirement impracticable, in which case the font and size of the advertisement shall match the rest of the advertisement or other public notice;

(B) On the home page of a website maintained by the landlord or landlord's agent, including a property management company, displayed in at least twelve-point type;

(C) In a paper or an online rental application for the dwelling unit, displayed in at least twelve-point, boldface type; or

(D) Orally, directly to the applicant, with written confirmation of receipt by the applicant of the advisement;

(3) If a comprehensive reusable tenant screening report is made available to the landlord or landlord's agent at the request and expense of an applicant and is received within thirty days from the date the report was prepared, the landlord or landlord's agent shall not charge an application fee or a fee for the landlord or landlord's agent to access the report; provided that a landlord or landlord's agent may charge an application screening fee to obtain information not contained in the comprehensive reusable tenant screening report, but this fee shall not be used for updating the information in a comprehensive reusable tenant screening report received within thirty days from the date the report was prepared; and

(4) If a landlord or landlord's agent conducts their own screening of tenants using a comprehensive reusable tenant screening report, the landlord or landlord's agent may charge the applicant for the actual costs incurred in obtaining the report in circumstances where the comprehensive reusable tenant screening report requires that the report be initiated by the landlord; provided that the applicant is notified in advance of the landlord's or landlord's agent's intent to conduct the screening or the applicant explicitly requests that the landlord or landlord's agent obtain the report on the applicant's behalf.

Information sought by the landlord or [~~the~~] landlord's agent charging the fee may include personal reference checks, tenant reports, criminal background checks, and credit reports produced by any consumer credit reporting agency.

(b) Upon request by the applicant, a landlord or the landlord's agent shall provide to the applicant [a]:

(1) [~~Receipt~~] A receipt for payment of the application screening fee; [~~and~~]

(2) [~~Breakdown~~] A breakdown of costs covered by the application screening fee[.]; and

(3) A certified copy of the applicant's criminal background check and credit report that are less than thirty days old.

(c) A landlord or the landlord's agent shall return to the applicant any amount of the application screening fee that is not used for the purposes authorized by this section within thirty days after the landlord or landlord's agent has submitted screening requests.

(d) For the purposes of this section:

"Comprehensive reusable tenant screening report" means a consumer report that meets all of the following criteria:

(1) Was prepared within the previous thirty days by a consumer credit reporting agency;

(2) Is made directly available to a landlord for use in the rental application process or is provided through a third-party website that regularly engages in the business of providing comprehensive reusable tenant screening reports and complies with all federal and state laws pertaining to the use and disclosure of consumer reports, including the federal Fair Credit Reporting Act; and

(3) Includes all the following information regarding an applicant: name, contact information, verification of employment, last known address, criminal background check, and credit report.

"Consumer credit reporting agency" has the same meaning as in section 489P-2.

"Credit report" has the same meaning as in section 489P-2."

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 3000.

HOUSE OF REPRESENTATIVES	H.B. NO.	2188
THIRTY-THIRD LEGISLATURE, 2026		H.D. 1
STATE OF HAWAII