Lack of Written Inventory Before Move-In Didn’t Defeat Owner’s Claim

Facts: After a Section 8 resident became delinquent in her payment of rent and after the owner made demands for payment, the resident notified the owner of complaints she had regarding the unit. County Housing intervened in the dispute, and the owner and resident signed a mutual termination agreement acknowledging that the lease would terminate on June 30, 2011. County Housing assistance payments ended on July 1, 2011.

The resident didn’t vacate the unit on June 30, 2011, didn’t pay her portion of the rent for June 2011, and didn’t pay rent for July and August 2011. On Aug. 3, 2011, the owner filed a complaint seeking possession of the unit, unpaid rent, damages, and attorney’s fees. The resident was evicted. And in December 2011, the district court held a trial on the owner’s other claims and the resident’s counterclaim, which sought judgment against the owner for $500,000.

On appeal, the resident argued that because the owner failed to prepare a written inventory of the unit prior to her initial occupancy in accordance with state law, the district court erred in finding her responsible for damages to the unit.

Ruling: An Hawaii Intermediate Court of Appeals upheld the lower court’s judgment.

Reasoning: State law provides that if the owner, prior to the initial date of occupancy, fails to prepare a written inventory detailing the condition of the unit and any furnishings or appliances provided, upon the termination of the tenancy, the condition of the unit and such furnishings or appliances “shall be rebuttably presumed to be the same as when the tenant first occupied the premises.”

However, the court pointed out that the presumption isn’t conclusive; it may be rebutted by contrary evidence. Here, the court found that County Housing had inspected the unit before the start of the resident’s occupancy “at which time the Premises passed inspection.” At that time, the inspection didn’t identify “any damage to doors, holes in the drywall, mildew or mold on the Premises, missing or broken toilet seats or shower rods, broken medicine cabinets, broken windows or screens, stains on the carpet, [or] rats in the Premises”; and that an inspection conducted after she vacated the unit revealed damages to the Premises, including “four broken doors, three missing towel bars, holes in the drywall, a broken medicine cabinet, missing light and doorbell covers and stain in the carpet.” The court found that it had no basis for disputing these findings.

• Balog v. Wakita, April 2014