Hi There !

I am confused by real estate practices in Hawaii.  It appears there
are two ways to buy a house:

(1)  Fee Simple
(2)  Leasehold

Fee simple is the "normal" way people buy real estate---all over the
USA.  You buy it, you own it.  Lock, stock, and barrel.

But leasehold appears different.  Apparently, a leasehold in Hawaii
means you own the house but do not own the land under the house.  I
guess this system evolved from the days when Hawaii had a king who
gave away land to certain royal favorites.

That brings up some questions with Hawaiian leasehold:

(1)  Can you get a normal mortgage given you only own the house and
not the land underneath?

(2)  Do you get a normal tax write-off for mortgage interest given you don't
own the whole thing?

(3)  When your leasehold expires on the underlying land, can the owner
of the land simply throw you out on the street and confiscate your
house?

A 5-star answer would be 1-2 sentences on each of these questions (1
or 2 paragraphs total).

Thanks!
ron

P.S.   All comments greatly appreciated !

Hey, this is just a quicky free comment.  Here are a couple of sites
that seem to discuss the matter:
http://www.clarkhawaii.com/faqs.html
http://www.osman1.com/leashold.html

Good luck, Myoarin

Many large constructions are leased and your Hawaii properties are
very similar. The World Trade Center, Sears Tower, and Empire State
Building are all properties that are leased. The World Trade Center's
99 year lease was finalized just two months prior to their
destruction. The Empire State Building's lease was drawn up in 1961
and was recently bought from Donald Trump (et al) by Empire State
Building Associates, an investor group that holds the master lease
which runs through 2076. And the Sears Tower lease was recently
purchased by the guy that has the World Trade Center lease. Each
almost never hear the lease mentioned-- it is always "the building
sold" when it actually is the lease.

Look up the Empire State Building's lease to find an interesting
problem; it is too cheap!

Being a banker in Canada I will give you my 2 cents (that would be 1.7
American cents)...

If a client came to me looking to purchase a home on leased land our
stipulaton would be that the lease needs to be have a lenth a minimum
of 5 years LONGER than the proposed amortization of the mortgage you
are looking for.  That way, if you mess up the mortage with my
institution, I am still in first position in recovering monies from
you before the land owner.

And yes, once your lease is up the land owner can kick you off...but
would have to pay market value for your home or pay to have it
moved...again, this is in Canada. (or agree to fair market lease
moving forward and allow you to stay or sell the property to you)

Sorry...one other thing...leasehold is NOT unique to Hawaii.

Myoarin,

You are The Best!   Thank you.

ron

markvmd,

Fascinating!  I had no idea.  I will definitely check out the Empire
State Building story.  (Going off on a tangent...I highly recommend
the book, Trump Nation.  Although Mr. Trump didn't like this
unauthorized biography, I thought it captured both sides of his big
mou...er...uh...big personality.)

Thanks again.
ron

canadianhelper,

We like Canadians!  I'll never forget your diplomats taking huge
personal (safety) risks during the Iranian hostage crisis.  You helped
the USA when others were pelting us.  (Yes...I am that old!)

Thanks for taking the time to write.  Greatly appreciated!
ron

And thanks back to you, Ron.  Thanks is all we commenters get, and
often not that.
I hope the links help.
All the best for the holidays and the New Year, Myoarin

I am a mortgage lender, so I can answer your question(s).
1. You can get a normal mortgage - but could be conditioned on the
expiration of the lease;
2. Interest tax write-off does not change;
3. At the expiration of the lease, there should be documentation
regarding existing properties still on the land.

g_dana,

Thanks a million!   I appreciate it!

ron