Posts Tagged ‘ leasehold ’

Understanding Hawaii Leasehold Real Estate

Many buyers interested in Hawaii real estate are unfamiliar with the term ‘Leasehold’, but it is of critical importance to understand. Most are familiar with real estate ownership in Fee Simple (also known as Freehold), in which a purchaser owns the land and any improvements and fixtures thereon.

However, in a few states, including Hawaii, there is another form of ownership: Leasehold.

When a landowner enters into an agreement/ground lease with a lessee, it creates a leasehold.

The main differences between ownership by Fee Simple and Leasehold are:

•    A leasehold buyer does not own the land on which improvements are located and, as such, must pay a ground lease.
•    The use, alteration, and maintenance of the premises are subject to conditions/restrictions named on the lease.
•    Use of the land is limited to the time remaining of said lease. At the expiration of the lease, either a new lease must be negotiated or the land reverts (and in many cases, the improvements thereon) back to the landowner, in what is called ‘reversion’.

Why would a potential buyer prefer a leasehold property over fee simple ownership? Continue reading this post


Posted by: Alex Cortez on October 15th, 2010 under Buying or Selling a Home


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