The security deposit is monies paid by or for the tenant. It cannot exceed one month's rent and it could include other deposits such as key or pet deposits.
The landlord can use the security deposit for unpaid rent, failure to return keys, cleaning costs if the tenant did not leave the unit in as clean a condition as it was at the start of the tenancy, and for accidental or intentional damages to the unit caused by the tenant. The landlord cannot make deductions from the security deposit for normal wear and tear. The landlord has the right to keep the entire security deposit when the tenant wrongfully quits the dwelling unit. Wrongfully quit is defined as a tenant who is absent from the unit for a continuous period of 20 days or more, without paying rent and without written notice to the landlord.
If the landlord keeps a tenant's security deposit at the end of the tenancy, the tenant must be notified in writing as to the reasons for retaining part or all of the deposit, and be given an itemized list of the deductions, along with the cost of each deduction, and written evidence such as copies of receipts, estimates or invoices for each deduction made. The balance of the security deposit, after the deductions, must be returned to the tenant no later than fourteen days after the rental agreement is terminated. If the landlord does not notify the tenant within fourteen days after the termination of the rental agreement that a part or all of the deposit is to be retained, then the landlord must return all of the security deposit. This action will not prevent the landlord from counter-suing the tenant at a later date for damages caused by a tenant.
Under Hawaii law, the landlord is in compliance with the 14-day requirement if the notice is mailed to the tenant, preferably certified mail, return receipt requested, and postmarked before midnight on the fourteenth day after the termination date, or if the tenant acknowledges, preferably in writing, receipt of the security deposit within the fourteen-day limit.
If the landlord and tenant disagree about the landlord's right to retain part or all of the security deposit, the tenant can file a claim in Small Claims Court no later than one year after the termination of the rental agreement.