Hawaii Leasehold Real Estate

For most Americans and Canadians, there is one type of property ownership: Fee Simple, which is also commonly referred to as Freehold in some States.  When discussing Hawaii real estate, It is critical to keep in mind that properties may have another type of 'Land Tenure' besides being Fee Simple, the other form being Leasehold. The difference between these two types of ownership is wide, so it's important to know the difference and how it can impact viability in reach your Hawaii real estate goals.

So to start, let's define them:

FEE SIMPLE (a.k.a. Freehold or Fee Simple Absolute):  Commonly referred to as the most absolute and complete form of ownership, Fee Simple ownership entitles the owner with title (ownership) in perpetuity, including the land and all improvements thereon.  An owner of a Fee Simple property can feel more secure in ownership rights, he or she can make use of the land, occupy it, and/or dispose in whatever matter is deem appropriate. 

LEASEHOLD:  When the Fee Simple owner (as Lessor) of land leases the land via a ground lease with an individual or entity (Lessee), a leasehold interest is created.  As per terms on the lease, the Lessee can enjoy the land and improvements in the same manner as a Fee Simple owner, BUT there are some stark differences to keep in mind.  First, the Lessee and any Buyer who purchases a property subject to a lease does NOT own the land, but instead have the right to enjoy it as per terms on the lease.  Second, when a leasehold property is sold to a new owner, he/she then is subject to the same terms/conditions in the lease, including remaining time of lease. At the end of the lease period, in a process named 'Reversion', the land reverts back to the land owner and depening on the surrender clause in the lease (if any), the improvements on the land may revert back to the land owner at no cost or as per negotiated terms on lease.  Third, in exchange for use and enjoyment of the land, generally there is a lease payment due to the Lessor from the Lessee and likely there are provisions for periodic adjustments.

Leasehold properties on Maui were up to a large extent developed in the 1970’s and 1980’s. Commonly these are clustered in West Maui (particularly Lahaina to Napili area) and South Maui (Kihei and Maalaea areas). For properties offered for sale throughout the State of Hawaii, prices will include whether the property is Leasehold or Fee Simple, as it plays a significant role in pricing and on-going costs of ownership.  It is worth noting that the lease payment is in addition to the monthly maintenance fees (HOA / Strata), property taxes, and any other costs associated with ownership - such as utilities, insurance policy, property management, etc. The main point to take away is that ownership of the land is separate from ownership of buildings and improvements constructed on the subject land.

Hawaii Luxury Home

When assessing a Leasehold property, take note of the following:

* Lease Term - This is the period of time for which the lease is in full effect. Most original leases were over 50 years, but as the lease term nears the expiration, that has an effect on valuation.

*  Lease Rent – This is the amount to be paid by the Lessee to the Lessor, including the frequency of payment - some are paid quarterly, whereas most are paid monthly.

*  Renegotiation Date – The original lease will detail specific timeframes when the lease payment is to be renegotiated, generally by a specific formula detailed. The purpose of this renegotiation is to ensure that lease payments are en par with fair market value and market conditions.

*  Expiration Date – This is an important date to note, as unless an extension or new lease are negotiated, then the original lease will have been completed and Reversion (more on that below) will come into effect. It's worth noting that for lenders, the expiration date is important as most will only finance mortgages that are 5 years less than the time remaining on the lease - as an example, if 20 years left on the lease, then lender will approve a mortgage for 15 years or less. 

*  Fee Interest – Keep in mind that when a Lessor leases his land, he/she retains an interest in the land, subject to the rights of the Lessee. Some leases will detail the amount of compensation for which the Lessor will accept to the sale of the Fee to the Lessee. 

*  Conversion - The process of converting a Leasehold property to Fee Simple by the Lessor / Land Owner selling the 'Fee' interest to the Lessee. In some properties, only part of the complex has gone through conversion, with the remaining units continuing to be Leasehold. 

*  Reversion – The lease will detail provision for reversion, which is the process of giving the land (and improvements thereon, if agreed) back from the Lessee to the Lessor. 

For any prospective Buyer interested in a leasehold property, note that during escrow, the Seller will furnish a fully copy of the lease and any applicable amendments. Things to be clear on include the amount of the lease rent, when lease rent is due and to whom is it payable, all future renegotiation dates, how the new lease rent will be calculated (typically there is a formula outlined), and what is to happen at the expiration of the lease as detailed on the surrender clause. Review the Hawaii Guide to Residential Leasehold as put out by a State of Hawaii agency and become more familiar with this type of ownership.

For some people, Leasehold is an attractive option that allows them to buy 'more' for a lower sales price. As an example, Kamaole Nalu is sandwiched between Royal Mauian and Hale Pau Hana, yet sales prices at Kamaole Nalu can be less than half per square foot than at the comparable Fee Simple neighbors. In addition, some leasehold properties such as Napili Point have remarkably low lease rent (at the time of this writing, in the $7 per month range). Lastly, when searching, take into account that some properties like Papakea Resort include both Fee Simple and Leasehold, which is then reflected in the price.

Now that armed with all this information, how to use our site to search (or exclude) leasehold properties?


We have taken great care to provide our site visitors with the most comprehensive yet easy-to-use user experience available. For Maui and Oahu we offer the ability to search by Land Tenure. On the Maui MLS search page, click on 'More Options' then scroll down to the Land Tenure drop down menu. 

Search Hawaii leasehold real estate


When looking at search results, we add the Land Tenure prominently for each listing. Between the price and the Listing Brokerage, please find the land tenure for quick indexing.

Hawaii leasehold search results

Important Information:

In an effort to provide all pertinent information quickly and easy to find, we are one of the very few sites that displays relevant details regarding leasehold properties, to include the amount of the lease and lease expiration. On a leasehold details page, scroll down to view details. 

Hawaii leasehold information details

Our team is well acquainted with the unique nuances of Hawaii Leasehold real estate throughout the entire State. For more information about a specific property, contact our team of Realtors today.

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Interested in Leasehold properties? Take a look below at some pertinent new listings, added to the market within the past month. For a more comprehensive search, view our Hawaii MLS Search page. 

Hawaii Leasehold Properties For Sale

New Listing
Photo of Listing #398080
Virtual Tour

Channel House D105 1010 Front St D105, Lahaina

$390,000 - 1 Beds, 1.00 Baths, 556 Sf

MLS® # 398080

Maui Property LLC
New Listing
Photo of Listing #667788
Virtual Tour

Kona Kai 74-5618 Palani Rd A1, North Kona

$224,995 - 2 Beds, 1.00 Baths, 616 Sf

MLS® # 667788

Premier Island Properties LLC
New Listing
Photo of Listing #667967

KONA ISLANDER INN 75-5776 Kona Islander Inn 148, North Kona

$299,000 - 1.00 Baths, 372 Sf

MLS® # 667967

Hawaii Resort Management, Inc.
New Listing
Photo of Listing #668011

KAPAA TOWN LOTS 4504 Kukui St, Kawaihau

$4,752,000 - 35,574 Sf

MLS® # 668011

Better Homes and Gardens Real Estate, Rainbow Island Properties
Photo of Listing #701263
Vacation Rental

SUNSET KAHILI 1763 Pee Rd 501, Koloa

$850,000 - 2 Beds, 2.00 Baths, 1,028 Sf

MLS® # 701263

Coldwell Banker Island Properties - Kauai
New Listing
Photo of Listing #701514
Virtual Tour

Kona Makai 75-6026 Alii Dr 1301, North Kona

$894,900 - 2 Beds, 2.00 Baths, 1,115 Sf

MLS® # 701514

Knutson & Associates
New Listing
Photo of Listing #667710
Virtual Tour

KIAHUNA PH II 2253 Poipu Rd 183, Koloa

$749,000 - 1 Beds, 1.00 Baths, 640 Sf

MLS® # 667710

RE/MAX Honolulu
Photo of Listing #701458

Kona Makai 75-6026 Alii Dr 2303, North Kona

$350,000 - 1 Beds, 1.00 Baths, 779 Sf

MLS® # 701458

Corcoran Pacific Properties
Photo of Listing #397999
Virtual Tour
Vacation Rental

Kahana Village 2A3/9 4531 Lower Honoapiilani Rd 2a3/9, Napili/Kahana/Honokowai

$800,000 - 2 Beds, 2.00 Baths, 1,118 Sf

MLS® # 397999

Keller Williams Realty Maui-Ka
Photo of Listing #397994
Open House
Virtual Tour
Vacation Rental

Kanai A Nalu 218 250 Hauoli St 218, Maalaea

$769,000 - 2 Beds, 2.00 Baths, 952 Sf

MLS® # 397994

Coldwell Banker Island Prop(P)
Photo of Listing #397980

Maalaea Yacht Marina 409 30 Hauoli St 409, Maalaea

$597,000 - 2 Beds, 2.00 Baths, 882 Sf

MLS® # 397980

Island Sotheby's Int'l Rlty(W)
Photo of Listing #667703

KIAHUNA PH II 2253 Poipu Rd 158, Koloa

$680,000 - 1 Beds, 1.00 Baths, 640 Sf

MLS® # 667703

Keller Williams Honolulu
Photo of Listing #397938
Vacation Rental

Maui Sands II 704 3559 Lower Honoapiilani Rd 704, Napili/Kahana/Honokowai

$389,000 - 1 Beds, 1.00 Baths, 602 Sf

MLS® # 397938

Keller Williams Realty Maui-Ki
Photo of Listing #397934
Virtual Tour
Vacation Rental

Hale Mahina B305 3875 Lower Honoapiilani Rd B305, Napili/Kahana/Honokowai

$649,000 - 1 Beds, 1.00 Baths, 799 Sf

MLS® # 397934

West Maui Luxury Property
Photo of Listing #397893

Maalaea Yacht Marina 307 30 Hauoli St 307, Maalaea

$575,000 - 2 Beds, 2.00 Baths, 882 Sf

MLS® # 397893

Coldwell Banker Island Prop-Ku
Photo of Listing #667698

KONA ISLANDER INN 75-5776 Kuakini Highway 115, North Kona

$239,900 - 1.00 Baths, 372 Sf

MLS® # 667698

KW Big Island
Photo of Listing #665842

TESHIMA SUBDIVISION 79-7266 Mamalahoa Hwy 3, North Kona

$98,000 - 1,233 Sf

MLS® # 665842

Hawaii Life
Photo of Listing #397850
Virtual Tour
Vacation Rental

Maui Eldorado I C-203 2661 Kekaa Dr C-203, Kaanapali

$575,000 - 1 Beds, 1.00 Baths, 960 Sf

MLS® # 397850

RE/MAX Honolulu
Photo of Listing #667430

Kona West 75-5680 Kuakini Hwy 111, North Kona

$135,000 - 1.00 Baths, 338 Sf

MLS® # 667430

Photo of Listing #701351
3-D Tour

PALI KE KUA III 5280 Ka Haku Rd 236, Hanalei

$425,000 - 2 Beds, 2.00 Baths, 1,135 Sf

MLS® # 701351

Corcoran Pacific Properties
Photo of Listing #667565

Kona Makai 75-6026 Alii Dr 6303, North Kona

$365,000 - 1 Beds, 1.00 Baths, 779 Sf

MLS® # 667565

Hawaii Coast Realty, LLC
Photo of Listing #397826
Vacation Rental

Milowai 107 50 Hauoli St 107, Maalaea

$519,000 - 1 Beds, 1.00 Baths, 707 Sf

MLS® # 397826

Hawaii Life (W)
Photo of Listing #701335

KONA ISLANDER INN 75-5776 Kuakini Highway 223, North Kona

$289,000 - 2.00 Baths, 372 Sf

MLS® # 701335

Kona Beach Properties LLC

Listings provided courtesy of the REALTORS® Association of Maui.

IDX information is provided exclusively for consumers' personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing.

IDX and Information provided herein is deemed reliable but is not guaranteed by the Hawaii Information Service, Inc. Listing Service. © 2023 Hawaii Information Service. All Rights Reserved. This website is for personal, non-commercial use only.

Listing information last updated on February 8th, 2023 at 9:40am HST.