HAWAII HOUSING: UNIQUE REAL ESTATE ISSUES TO KNOW

If you’re considering buying property on the Big Island—or anywhere in Hawaii for that matter—the first thing you’ll need to do it to familiarize yourself with our unique market. In addition to monitoring market conditions, you’ll also need to understand some of the terminology, types of ownership, and other regulations surrounding land rights in Hawaii. To stay up to date on what’s happening in the market, be sure to check out our quarterly update. As for the rest, this post will help you understand the unique real estate issues you need to know before making a purchase.

Fee Simple

Fee simple ownership is likely the most familiar type of ownership to buyers searching for residential real estate. Fee simple simply means that the buyer is given the title to the land which includes any and all improvements to the land from the time of purchase on. In this scenario, the owner has full rights to build on the land, lease it, or sell it as he/she wishes.

Leasehold

A leasehold agreement entitles the Fee Simple owner (Lessor) to rent the land to the Lessee while maintaining full ownership rights. In this type of agreement, any changes or improvements to the land (including structures built on the land) are owned by the Lessor. Something else to note is that if the Lessor decides to sell the land while the Lessee is still residing there, the Lessee will have to evacuate at the close of the lease agreement.

Septic Tanks & Cesspools

Many Hawaiian homes that aren’t connected to a government sewage come equipped with a cesspool, a septic tank, or some combination of the two. The main purpose of both is to store wastewater from the home, but septic tanks are generally more efficient as they have a bacterial environment that helps biodegrade waste faster. Read more about key differences here.  

Hawaiian Home Lands

Certain tracts of land on the Big Island have been set aside exclusively for use by people of Hawaiian descent. These pieces of land may not be sold to anybody who is not of Hawaiian descent and there are even regulations about the percentage of Hawaiian ancestry one must have in order to reside on these lands.

Condominium Property Regime (CPR)  

CPR properties are parcels of land where the owner has acquired the proper permits to divvy up a piece of land into units that can be developed and sold as separate pieces. Each until typically has its own exclusive area which includes the home and the land it sits on, yet there is often a shared element that connects them. A CPR with two units, for example, may include two homes that share a driveway.

Lanai

You’ll see this term come up a lot as you search for houses on the Big Island. A lanai is a patio, balcony, or porch—the best ones will always feature a private area from which you and your family can relax and enjoy views of the ocean!

Leeward

Leeward is simply a term for the western side of the island. This encompasses Kona and the drier side of the island. Here, the winds fight against the wetter, temperate trade winds.

Windward

The windward side of the island is the Hilo side, where a wetter climate keeps the area covered inconsistent rainfall.

Makai

Makai means toward the ocean.

Mauka

Mauka means towards the mountains or inland.

These are some of the terms buyers should be familiar with while searching for real estate on the Big Island. If you come across terms you are unfamiliar with or would like to clarify, please feel free to contact us here. We’re happy to help answer some of your questions.