Buying Property In Hawaii
If you are looking to buy property in Hawaii such as a house you should be aware that homes, condominiums and commercial property on the Hawaiian Islands are sold as fee simple or leasehold. Fee simple means you own the land on which the home or condominium is built. In a leasehold situation, you usually own the building, but rent the land on which it stands. Much of O’ahu land is leasehold; relatively little of the outer islands’ property is leasehold.
Among Hawai’i issues is leasehold conversion-- the court-mandated sale of land that has been leased to homeowners for decades. From about 1930, private residences, condominiums and commercial buildings were constructed on leased land, usually owned by the large estates like Campbell, Castle and Cooke and Bishop. This made homes and buildings less expensive, but inevitably led to disputes as lease agreements ended or lease fees were renegotiated and raised. In recent years, the state has stepped in, forcing leasers to sell land on which private homes are build at market value. Still in question are the condominium and commercial plots. The issue seems to be slowly resolving itself through voluntary negotiation. However, if you are considering buying a home, you should either:
1. Stay away from leasehold property entirely
2. Or consult an attorney and learn as much about leasehold properties as you can.
Most realtors will also answer your questions honestly, if you know which question to ask. At least, inquire:
1. How much the lease costs each month
2. When the lease is due to be renegotiated
3. Whether it is possible to purchase the land now
4. Whether any of the owners have been able to purchase their land rights. (Once a landlord sells to one tenant in a project, he must be willing to sell to all.)