Trying to compare condos in Central Maui and keep seeing “leasehold” and “fee simple”? You are not alone. If you are shortlisting homes in Kahului or Wailuku, understanding these terms will help you budget correctly, plan your financing, and protect resale value. In this guide, you will learn what each ownership type means in Hawaii and how it affects your day-to-day decisions, timeline, and long-term outlook. Let’s dive in.

Fee simple vs leasehold basics

What fee simple means

In a fee simple purchase, you own the unit and an undivided interest in the land indefinitely. You control the property within county rules, your mortgage, and the condo or HOA documents. There is no ground rent and no lease expiration to plan around.

What leasehold means

In a leasehold purchase, you buy the unit or a long-term right to occupy, but a separate landowner holds the land. Your rights come from the ground lease, which spells out the lease length, ground rent, renewal options, and what happens at the end of the term. The lease may also set rules for assignments, subletting, alterations, insurance, and taxes.

How it shows up in Hawaii records

Hawaii records will show either a fee simple conveyance or a leasehold estate tied to the unit. The condominium declaration should state if the land is fee simple or subject to a ground lease. Always check title and the condo declaration to confirm which you are buying.

What this means for Central Maui buyers

Ownership rights and use

• Fee simple gives you long-term certainty because there is no ground lease.
• Leasehold rights follow the lease terms, which may require lessor approval for assignments or remodeling and can include subletting limits.
• The lease may also assign certain costs, like taxes or insurance, to you.

Common fees to budget

• HOA or condo association fees apply to both fee simple and leasehold condos.
• Ground rent applies only to leasehold and can be fixed, indexed to inflation, or renegotiated per the lease.
• Special assessments can occur in either structure and are set by the association.
• Property taxes are common, and leases often require lessees to pay taxes on the unit improvements and sometimes a share of land tax. Review the lease and tax records to confirm.

Maintenance and major repairs

Condo associations typically handle common areas and reserves regardless of ownership type. Leasehold buildings may carry extra obligations set in the ground lease, such as specific insurance requirements or landowner approval for capital projects. Reading both the HOA documents and the lease will clarify who does what.

Timeline differences you might see

Lease review can add time to escrow because the lease needs a thorough read. Expect about 1 to 3 weeks for experienced title or attorney review, and longer if the lease is complex or requires lessor consent. If lessor approval is needed, build in extra time since approvals can add weeks to your timeline.

Financing and resale factors

What lenders look for

Lenders take a close look at leaseholds. They focus on how many years are left on the lease at closing and at loan maturity, whether the lease is assignable or needs landowner consent, and how rent escalations and renewals work. If the lease term is short or the terms are restrictive, expect fewer lenders, higher down payments or rates, or cash-only offers.

Title and insurance basics

In a leasehold sale, title transfers the lessee’s leasehold interest rather than the land. Title insurance for leasehold interests is available when the lease and landowner’s title are clear. Confirm that the ground lease is recorded and that title will insure the leasehold interest without unresolved exceptions.

Resale and value

Leasehold condos usually sell for less per square foot than comparable fee simple units because buyers are purchasing a time-limited interest. Rent escalations, renewal uncertainty, and lease expiration can reduce demand. That said, some buyers are comfortable with leaseholds and will move quickly when the remaining term is long and pricing reflects the structure.

Central Maui context

Where you will see each type

Central Maui is the island’s civic and commercial hub, with a mix of older condos, workforce housing, and single-family neighborhoods. You will find both fee simple and leasehold properties in Maui, including in Kahului and Wailuku. Leaseholds often appear in developments where a separate landowner retained the land and leased it to a developer.

Who leasehold fits

Many first-time island buyers and relocators look to Central Maui for more approachable prices and access to daily amenities. Some choose leasehold for affordability or location, but they tend to be careful about lease length, ground rent increases, and financing options. If long-term certainty matters most to you, fee simple may feel more comfortable.

HOA practices to review

Some older associations can have limited reserves or unusual expense allocations tied to the ground lease. Review budgets, reserve studies, and recent meeting minutes, and confirm if upcoming projects require landowner approval. This helps you understand future assessments and timing.

Timing and market dynamics

Leasehold units can attract a smaller buyer pool, so they may spend longer on the market or see price adjustments. Well-priced units with long remaining terms can still sell quickly to buyers who understand leaseholds and have aligned financing.

Due diligence checklist

Documents to request early

• Condo declaration and bylaws to confirm land ownership type.
• The full ground lease for leasehold units, including term, extensions, assignment rules, rent escalations, maintenance, insurance, and end-of-lease provisions.
• Current HOA budget, reserve study if available, and recent meeting minutes.
• Estoppel or statements from the association and, for leasehold, from the landowner about consents.
• Preliminary title report showing the recorded lease and any encumbrances.
• Property tax bills and the lease language that assigns tax responsibilities.

Smart questions for the listing agent

• Is this fee simple or leasehold, and who is the lessor if leasehold?
• What is the remaining lease term, and are renewals automatic or discretionary?
• How is ground rent set, and when is the next adjustment scheduled?
• Does the landowner routinely approve assignments, and are there recent examples?
• Any disputes or pending issues with the landowner or association?

Build the right team

• A local lender familiar with Hawaii leaseholds and their program requirements.
• A title company experienced with leasehold title in Maui.
• A real estate attorney to review the lease and end-of-term scenarios.
• A local Realtor with experience across Kahului and Wailuku in both structures.

Timeline planning

• Get pre-qualified early and confirm the lease meets your lender’s program.
• Add 2 to 4 or more weeks to escrow if lessor consents or complex lease reviews are needed.
• Request HOA and lease documents as soon as your offer is accepted.

Red flags to consider

• Short remaining term with no clear renewal path.
• Near-term rent escalations that could jump costs.
• Title insurance that will not insure the leasehold interest or unresolved lease-related exceptions.
• Lessor approval for transfers paired with a history of denials or onerous conditions.
• Weak HOA reserves and large pending assessments tied to land obligations.

When leasehold can make sense

Leasehold can be a fit if you value location or upfront affordability and you are comfortable with the lease horizon. It can also work if you have cash or a lender that supports the specific lease terms, and you plan your timeline around the remaining years. The key is clarity around renewals, rent escalations, and exit strategy.

Your next step

If you are weighing leasehold versus fee simple for a Central Maui condo, a clear plan and the right team will keep your options open. We can help you compare real examples in Kahului and Wailuku, estimate total monthly costs, and align your financing with the property type. For thoughtful, local guidance, reach out to Mino McLean for a personalized conversation.

FAQs

What is the difference between leasehold and fee simple in Central Maui?

• Fee simple means you own the unit and land interest indefinitely, while leasehold means you own the unit or occupancy rights but pay ground rent to a separate landowner under a lease that eventually expires.

How does a leasehold affect financing for a Maui condo?

• Lenders review the remaining lease term, renewal options, transfer approvals, and rent escalations, which can limit loan programs, increase down payment needs, or require cash if the term is short.

What extra costs should I expect with a leasehold condo?

• In addition to HOA dues and potential special assessments, you may pay ground rent and certain property taxes or insurance as assigned by the lease, so reviewing the lease is essential.

Do leasehold condos have lower resale value than fee simple?

• Leaseholds typically sell for less per square foot because buyers are purchasing a time-limited interest, and demand can be affected by rent increases and lease expiration risk.

How long does escrow take for a leasehold purchase in Kahului or Wailuku?

• Expect a longer escrow to allow for lease review and any lessor approvals, commonly adding a few weeks beyond a standard fee simple timeline depending on responsiveness and lease complexity.