Today, we are launching a new category to the blog called real estate terminology. Maui and Hawaii in general has some terminology that is unique from the mainland. These posts will discuss those terms as well as other real estate terms that may be helpful for first time home buyers. We may even throw in some local pidgin terms to mix things up.
I figured it might help if we started with leasehold property, one of the most unique aspects of Hawaii real estate. Leasehold is a type of ownership that occurs primarily with condominiums. When you own a leasehold condo, you own the condominium but you are on a long term or ground lease for the land beneath it. These lease terms run anywhere from 50 to 99 years. leasehold Condominiums are about 20 to 30% less expensive than conventional or Fee Simple condominiums because there is more uncertainty for the long term and they are considered differently when financing. When you own a leasehold condo, you must make monthly payments to the lessor for the property. The monthly lease payment is renegotiated periodically throughout the term of the lease. Usually, renegotiation is based on market rates, but some condos increase their lease at prenegotiated rates. If you have any questions about leasehold properties, contact the Maui Real Estate Team today.