Frequently Asked Questions
1) What is the difference between fee simple and leasehold? When you purchase fee simple property you own the land and the improvements thereon. However, if you buy a leasehold property you are buying a lease for the land and usually the improvements. The ground lease is set for a determined number of years, with the ground rent set for a period of time, with incremental adjustments. Leasehold land is often less expensive.
2) What is escrow? Escrow companies are used in Hawaii. They are independent third parties, the hold the earnest money deposits, search the title, order documents prepared. In general they see that the terms of the contract are carried out under the terms of the contract. There is a fee for this service and that fee is usually split between buyer and seller.
3) What is a CPR?
CPR stands for “Condominium Property Regime”. You would mostly see or hear this as a number. What is the CPR#, which distinguishes one condo from another for tax and sales purposes.
4) What are TMK’s. In Hawaii land is identified by “tax map keys”. This is used for specific identification of a parcel in the State. No two TMK’s are alike. Look upon it as a social security number for real estate. It is an important number in Hawaiian real estate and you will constantly be asked for the tmk.
5) What disclosures will I receive about the property I am purchasing?
Under Hawaii law, the seller is obligated to fully and accurately disclose in writing to the buyer any fact, defect, or condition, past or present, that would be expected to measurably affect the value of the property to a reasonable person. You will be able to review and accept or reject the written disclosure within a stated period of them. This disclosure is to disclose all material facts relating to the property within the knowledge and control of the seller, that can be observed from visible, accessible areas, and also which might be required by other sections of the law. Some of the other sections of the law would be tsunami areas, and airplane noise.
6) How is the Island of Hawaii organized?
Our Island is organized into 9 districts, South Hilo, North Hilo, Hamakua, North Kohala, South Kohala, North Kona, South Kona, Kau and Puna. The entire Island is a County and there is one councilperson from each district. For population of each district go to that section under Community.
7) What is the difference between survey and staking? When a contract calls for staking a licensed surveyor will find the corners of the property. When a contract calls for survey, the licensed surveyor will find the corners of the property as well as check for encroachments.
8) How is property taxed? See the portion on Taxation in the Community section.
9) How does the cost of living compare to the Mainland? The latest available statistics reveal that the cost of living is approximately 27% more than the Mainland.
10) Are termites a problem in Hawaii? Yes, termites are ever present. We have both the ground and the subterranean ones. A seller has to disclose whatever is known about the termite condition of the premises. The standard real estate contract calls for an inspection and treatment, if necessary.
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