Leasehold – should I buy the fee for Kuilima Estates?

by: admin

Currently the Kuilima Estate Owner Association and the Turtle Bay Resort are in negotiation for the Resort to sell the land where the Kuilima condos are located to the association.  In general, leasehold ownership, unlike fee simple ownership, does not include the land when purchasing real estate.  For a further explanation see:  Leasehold vs. fee simple.

Should the deal go through, the Kuilima Owner Association will become the owner of the land.  In that case, as a buyer of a Kuilima Estate Condo, you will have the option to purchase the condo a fee simple.  This will require the purchase of ‘the fee’.  The association, as the new owner, retains title to all the land until the individual owners pay the association for their portion of the cost of the land.

Generally this is a very good thing because unless the land is sold to the association, the real estate slowly becomes less valuable as the grounds lease matures.  Therefore, yes you should want to purchase the fee from the association.  In either case, you will be buying the property fee simple if you don’t purchase the fee at the same time you close on the property but the association with hold a lien on the property until you buy it from them.  If possible, you should purchase the fee when purchasing the property as the interest costs you could obtain from a bank are most likely lower than what the association would charge your.

 

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