FEE SIMPLE AND LEASEHOLD

Fee Simple (FS) is the highest form of land ownership in which the land is owned outright, as contrasted to leasehold (LH) in which the land is leased. Most mainland owners own homes and property in fee simple, though they may never have been aware of the term. Unlike (Oahu) where leasehold ( non-fee simple) land is common for residential properties, Kauai has very few leasehold residential properties. For condominium apartments however, about 40% are on leasehold land requiring (usually) monthly payments on the underlying land lease. Leases on land usually are long-term, and have built in increases every specified period of years, finally terminating. At that time, presumably new lease could be negotiated, or, worst case the lessor reclaims the land. To compensate, condominiums on leasehold land are generally less expensive than comparable ones on fee simple property.