In Hawaii a very low price may mean it is a "leasehold" property

Real Estate Agent with Resort and Second-Home Specialist REALTOR Broker #21673

What is the difference between a "fee simple" and a "leasehold" property?

There are two common types of ownership in Hawaii, Fee Simple and Leasehold. Fee Simple is the most common both here and in other states. If property ownership is Fee Simple ownership of both the land and the improvements (the buildings) are conveyed together when the property is sold. If you buy a Fee Simple property you buy the land and the improvements.
In Leasehold ownership the land - usually a large parcel that has multiple dwellings - and the improvements (the individual home or condo) are owned by different entities.The land owner leases the land to the home owner. If you buy a Leasehold property you own the dwelling and you lease the land. Usually the terms of the land lease include a monthly fee that will be renegotiated after a period of years and may have a expiration date. A buyer considering a Leasehold ownership should compare the terms of that property's lease and shoul dnot assume all properties in that development have the same terms.
A Leasehold property will usually sell for less than a comparable Fee Simple property, sometimes for much less. This can be an advantage to a buyer if the terms of the land lease meets that buyer's needs.​
If you are considering purchase of a leasehold property you may want to consult a real estate attorney. It is important that you understand the terms of the land lease and other factors that may be important before you make your final decision.
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Please call or email me if you are considering selling or buying a property on Kauai. I work with a sales team that are experts at helping you make the right move!


Kathleen Luiten, REALTOR Broker                                                                         


CENTURY 21 All Islands



Don't just dream, call Kathleen!


Comments (5)

Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

You always provide good information about real estate . Thank you for sharing.

Dec 08, 2015 07:47 PM
Conrad Allen
Re/Max Professional Associates - Webster, MA
Webster, Ma, Realtor

Hi Kathleen.  In our area the term is usually 99 years.  Is that same in Hawaii?  Thanks.

Dec 08, 2015 07:52 PM
Kathleen Luiten

That was the most common here too. Where land owners are still keeping the land and offering new leases they seem to be making them shorter term now though.

Dec 09, 2015 03:14 AM
Robin Standard
Dream Home Brokers LLC & Appraiser - Baton Rouge, LA
Baton Rouge, Denham, Walker, Baker, Prairieville

Great to know!

Dec 08, 2015 09:35 PM
Jeffrey DiMuria 321.223.6253 Waves Realty
Waves Realty - Melbourne, FL
Florida Space Coast Homes

Kathleen, I am not sure why the leasehold form of ownership even exists...but I am sure many folks have been told things that have cost them lots of money.

Dec 08, 2015 10:53 PM
Jeff&Grace Safrin
F.C.Tucker 1st Team Real Estate - Valparaiso, IN

Wow this is not as common in IN thanks for sharing Kathleen!



Dec 09, 2015 11:32 PM