Hawaii Estates, Leasehold, and Ownership Systems
Hawaii's land history produces features rare elsewhere: widespread leasehold ownership, a dual recording system, and heavy condominium use. This chapter covers leasehold versus fee simple, the Condominium Property Act, and the Land Court system.
Leasehold Versus Fee Simple
Many Hawaii properties, including condominiums, are sold as leasehold interests rather than fee simple. A leasehold owner holds the right to use the property for a fixed term and pays lease rent to the fee owner of the land; when the lease ends, the land reverts to the fee owner unless the lease is renegotiated or the fee is bought out. Because leasehold status dramatically affects value, financing, and future cost, a broker must disclose it clearly and make sure buyers understand it.
Condominiums Under HRS Chapter 514B
Hawaii condominiums are governed by the Condominium Property Act (HRS Chapter 514B), which addresses association governance, budgets, reserves, and required resale documents. Brokers marketing or managing units must ensure buyers receive the association's governing documents and understand maintenance fees, reserves, and any special assessments before closing.
Regular System and Land Court (Torrens)
Hawaii records real property in two systems. The Regular System uses the traditional chain-of-title recording, while the Land Court (Torrens) System issues a state-guaranteed Transfer Certificate of Title. A broker should identify which system applies to a property because it affects how title is documented and transferred and how title questions are resolved.