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.