Maui Fee Simple And Leasehold Land Tenure

In the State of Hawaii and Maui County property ownership can either be held as Fee Simple or Leasehold. Fee Simple is the type of ownership most States have and most property owners are familiar with. Hawaii and several other States have a second type of ownership which is Leasehold. Below you can review each type of ownership.

Fee Simple: Fee Simple is the most common form of property ownership on Maui and is the highest form of ownership. The vast majority of homes, condominiums, and land on Maui are owned Fee Simple. As an owner of a Fee Simple property you have full ownership of the land and all of the improvements for perpetuity. Most Maui property owners prefer Fee Simple ownership to Leasehold ownership. Fee Simple property owners are responsible for mortgage payments, property taxes, insurance, maintenance, and HOA dues. Maui Fee Simple properties can be passed along to heirs.     

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Leasehold: Leasehold ownership is less common than Fee Simple ownership and most commonly seen in condominiums located on West Maui and South Maui. Leasehold ownership is when the Owner/Lessor leases property to a Buyer/Lessee for a set number of years. The Buyer/Lessee is allowed to occupy the property during the lease period and pays the initial purchase price plus a monthly lease payment to the Owner/Lessor. The Buyer/Lessee may also be responsible for their mortgage payment, property taxes, maintenance, and HOA dues. Most Leasehold leases initially start at 40 to 50 years and at predetermined times the lease rate is renegotiated. During Leasehold ownership the Buyer/Lessee can sell their remaining interest in the lease. The new Buyer/Lessee must be willing to accept the remaining lease terms. As Leasehold properties near their lease expiration the values tend to rapidly decrease. Lease expiration periods can be renegotiated, but if the Owner/Lessor is unwilling to extend the lease period the Buyer/Lessee must surrender the property back to the Owner/Lessor. 

Click here for more information on Maui Leasehold ownership.