Leasehold property offers a contractual right to title and use of the property for a fixed period of time. Once or twice a year I am asked if there is a right to purchase the Fee Simple interest on these properties. Any right must be written into the lease contract, it cannot be assumed and is not implied by the State of Hawaii. There are other benefits to leasehold properties starting with its lower cost to acquire the property. For a recent update click on the attached article to see the courts treatment of leasehold properties.
A federal appeals court has ruled in favor of the City and County of Honolulu in the 2005 repeal of the city’s controversial condominium leasehold conversion law.
The case involves dozens of leaseholders in the Discovery Bay and Admiral Thomas condominium projects who attempted to purchase the fee interest in their units under the lease-to-fee law. The ordinance, also known as Chapter 38, was enacted in 1991 and allowed condominium lessees to acquire the fee interest through the city’s power of eminent domain.
Read more: City wins court ruling in leasehold conversion case | Pacific Business News