Help me decipher this condo property description... (Hauula: flat fee, renter)

[Mikala43]

No. Please consult with a Realtor.

[rhbj03]

Originally Posted by Mikala43

No. Please consult with a Realtor.

I did consult with a realtor at the beginning of my search, but I found that Hawaii realtors don't like to answer questions. My guess is they have dealt with too many out of state pretenders, and if so I don't blame them. Maybe they need to see some money on the table.

So I have to resort to forums for my preliminary due diligence.

[Mikala43]

Either the lease is bought by you (more money) or it is renegotiated and new payment terms are established (monthly payments).

I'm not really up on leasehold, I'm just filling in until more knowledgeable members contribute.

[Harpaint]

I would try to find a fee simple condo you can afford. It's hard to sell the the LH condos many times. If something happens and you need to sell, you could very well be stuck.

[pj737]

Originally Posted by rhbj03

Hi thank you for your info and view point.

I typically would not want to bother with Leasehold type of property. But in this case, the sales ad says "Lease ends December 14, 2023; thereafter fee simple". I would think this is referring to ME the buyer of this property owning it FEE SIMPLE after 2023, is that correct? If true, then my only risk ish between now and 2023, the landowner jacks up the $30/month very high. But can I tell if this is true from this language?

I noticed in the same condo building, one unit says "Fee Simple in 2023" but 5 others don't. Is it possible that within the same building there are different treatments?

"Fee simple in 2023" could mean that the project (land and building) converts to fee... subsequently leaving the landowner with fee ownership of the entire project (land and building). While the language used by the realtor sounds confusing (almost promising), this is exactly what happens at the end of all leases (without provisions for extensions or offers to buy the fee) - the entire property converts to fee and the landowner takes the building ultimately leaving the LH owners high and dry.

If the lease specifically states that the owners (AOAO) have first right of refusal to buy the fee interest, then the property converts to fee with the AOAO (condo association) having an opportunity to buy the individual owners' fee interest in bulk. The issue with that is that nobody will know what that cost will be and whether or not the banks will be willing to finance (with the AOAO making the payments) the purchase of the entire plot of land. An independent appraisal will hold all the cards in that situation (appraiser is God)... and that could mean that even if the AOAO is willing to purchase the fee interest in the best interest of all the condo owners, they may not be able to afford it or source enough debt to make that acquisition.

There are of course a million different ways it can go because the landowner could also offer a portion of the fee interest of the plot of land (e.g. 30%) allowing some owners to acquire the fee with others continuing to pay lease rent to the landowner over X time at X rate with possible opportunities to buy the fee later down the line on X date. Over the years I've seen both incredibly convoluted and creative ways of making things work either for or against the LH owners.

I'm assuming the property is in Waikiki. With exploding property values and massive investments occurring inside Waikiki, it is pretty much guaranteed that any opportunities to acquire the fee will be costly ones.

[rya96797]

it would be nice if he actually mentioned what condo it was for.

[rhbj03]

Originally Posted by rya96797

it would be nice if he actually mentioned what condo it was for.

this is the condo, on north side of Oahu,

https://www.zillow.com/homes/for_sal...55_rect/15_zm/

[rhbj03]

Originally Posted by pj737

"Fee simple in 2023" could mean that the project (land and building) converts to fee... subsequently leaving the landowner with fee ownership of the entire project (land and building). While the language used by the realtor sounds confusing (almost promising), this is exactly what happens at the end of all leases (without provisions for extensions or offers to buy the fee) - the entire property converts to fee and the landowner takes the building ultimately leaving the LH owners high and dry.

If the lease specifically states that the owners (AOAO) have first right of refusal to buy the fee interest, then the property converts to fee with the AOAO (condo association) having an opportunity to buy the individual owners' fee interest in bulk. The issue with that is that nobody will know what that cost will be and whether or not the banks will be willing to finance (with the AOAO making the payments) the purchase of the entire plot of land. An independent appraisal will hold all the cards in that situation (appraiser is God)... and that could mean that even if the AOAO is willing to purchase the fee interest in the best interest of all the condo owners, they may not be able to afford it or source enough debt to make that acquisition.

There are of course a million different ways it can go because the landowner could also offer a portion of the fee interest of the plot of land (e.g. 30%) allowing some owners to acquire the fee with others continuing to pay lease rent to the landowner over X time at X rate with possible opportunities to buy the fee later down the line on X date. Over the years I've seen both incredibly convoluted and creative ways of making things work either for or against the LH owners.

I'm assuming the property is in Waikiki. With exploding property values and massive investments occurring inside Waikiki, it is pretty much guaranteed that any opportunities to acquire the fee will be costly ones.

Now everything makes perfect sense. Thank you.

I hope you locals all can tell what this description means. To me the ad language seems an intentional fuzziness.

[rya96797]

link doesn't seem to work. what's the exact address of the condo?

[rhbj03]

Originally Posted by rya96797

link doesn't seem to work. what's the exact address of the condo?

53 Kamehameha Hwy
Hauula, HI 96717

Trying the link again:
https://www.zillow.com/homes/for_sal...75_rect/13_zm/