Hawaii Commercial Lease Agreement

Yes. Commercial rent in Hawaii is subject to the General Excise Tax at 4% (plus county surcharges of 0.5% in Honolulu). Landlords typically pass this GET to tenants via a gross-up clause. Leases should clearly specify whether quoted rent is inclusive or exclusive of GET, and who bears the obligation for payment.

Commercial leases in Hawaii's major markets (Honolulu, Maui) typically run 3–5 years for retail and 5–10 years for office space. Given Hawaii's high real estate costs, landlords often require longer initial terms with options to renew at pre-negotiated rent escalations (CPI-linked or fixed %). Negotiate renewal options and build-out allowances upfront.

Triple-net and modified gross leases should define CAM charges precisely: list which expenses are included (landscaping, parking lot maintenance, security, common utilities) and which are excluded (capital improvements, management fees, landlord's income tax). Negotiate a CAM cap (5–10% annual increase) and audit rights to verify charges annually.

Landlords routinely require personal guaranties from business owners, especially for new businesses or LLCs with limited credit history. Negotiate to limit the guaranty to a fixed dollar amount (6–12 months' rent), a 'burn-off' provision (guaranty expires after X years of timely payment), and an exclusion for landlord defaults. Never sign a full, open-ended guaranty without negotiation.