Land Lease Renegotiation

[Frankie's Market]

Re: Land Lease Renegotiation

IF the lessor has plans for the property, would the lessor even offer the lessee the option of purchasing his fee simple interest? Or, is offering that option legally mandated? Again, if the lessor has plans for the property what would happen if the lessee had the money and opted to purchase the fee? I know the lessee doesn't have the money. It's just a hypothetical question!

In 1967, the state legislature passed the Hawaii Land Reform Act, which called for mandatory conversion of leasehold to fee simple via eminent domain. Note that this law only applied to single family residential homes, not to condos or co-ops.

http://www.capitol.hawaii.gov/sessio...B1606_HD1_.HTM

Accordingly, in 1967, the legislature enacted Act 307, Session Laws of Hawaii 1967, that allowed lessees of long-term leasehold interests in single family residential development tracts the right to purchase the fee interest in their residential lots through a condemnation process involving the fee simple landowners and what is now the Hawaii housing finance and development corporation, where the latter would condemn the fee interest, pay the fee owner fair compensation for the fee interest, and in turn, sell the acquired fee interest to the leasehold homeowner.

So yes, once a fair compensation price has been established, then the land owner would be compelled to sell if the leaseholder comes up with the amount necessary to purchase the fee interest.

[tutusue]

Re: Land Lease Renegotiation

Duh on my part. Forgot about condemnation. Thanks, FM.

[Amati]

Re: Land Lease Renegotiation

Accordingly, in 1967, the legislature enacted Act 307, Session Laws of Hawaii 1967, that allowed lessees of long-term leasehold interests in single family residential development tracts the right to purchase the fee interest in their residential lots through a condemnation process involving the fee simple landowners and what is now the Hawaii housing finance and development corporation, where the latter would condemn the fee interest, pay the fee owner fair compensation for the fee interest, and in turn, sell the acquired fee interest to the leasehold homeowner.

That would apply to someone in Makakilo, but is the problem presented in this thread part of a "development tract"? [Gee, maybe we HTers can band together and hire out as shade-tree-legal-advisors. ]

[Menehune Man]

Re: Land Lease Renegotiation

The Laau St. area is on leasehold land which runs up 2012!
This will affect at least 2,500 people including my wife and I.
Honolulu can not absorb that many working poor. Help!!!
Laau St. is off of Date St. near Kapiolani Blvd.

When is the state and especially Honolulu gonna realize that every city needs these kinds of neighborhoods to house the folks that do the "Blue Collar" jobs?

[Menehune Man]

Re: Land Lease Renegotiation



Captured photo of the area map.

[Menehune Man]

Re: Land Lease Renegotiation

Oh well... Iolani School has purchased the entire Laau St. area.
honolulu advertiser article

Guess we will be booted out Dec. 2012.
Maybe they'll let more time since it's stated that there are no set plans yet and believe nothing will be started for years... we'll see.

[Honoruru]

Re: Land Lease Renegotiation

Wow! That's a bummer, MM. Since it seems that there are no definite plans yet, I hope that things eventually work out for you (and everyone else).

[Kaonohi]

Re: Land Lease Renegotiation

It is a sad situation, and everyone else here is more qualified than I to give advice.

Back in the day when FEE was out of reach (or unavailable), people did what they could, hoping for future change, just to have a PLACE!

It's lawful, but it's unjust.

[Amati]

Re: Land Lease Renegotiation

Oh well... Iolani School has purchased the entire Laau St. area.
Guess we will be booted out Dec. 2012.
Maybe they'll let more time since it's stated that there are no set plans yet and believe nothing will be started for years... we'll see.

Don't be suprised if they start now sending out notification of the need to vacate in 2012. They will probably do that even if they have no intention of actually building yet. Since there are months and months of advance notice needed, they might start in on that process, and then in the end give out month-to-month extensions. That way, they keep the homes in place, but the minute they decide to build something new, they are set up to get everyone out immediately.

[craigwatanabe]

Re: Land Lease Renegotiation

We had a similar problem in Waialae Nui Valley back in the 80's. The subdivision was built in 1960 under a 55-year lease agreement to homeowners. Many of us bought our land (ours was 10,000 sq ft) for around $50,000 against the suggestion of our community attorney. Then the Japanese bubble hit and suddenly $50K jumped in leaps and bounds to a point where the valuation jumped to 10-times that amount to half a million dollars for that very same property.

That lease runs out in 2015 and those who didn't take advantage of the initial KSBE offering of $50,000 then and can't afford the current market value now, will find themselves in the same predicament you are in.

[Frankie's Market]

Re: Land Lease Renegotiation

Don't be suprised if they start now sending out notification of the need to vacate in 2012.

Not so fast. Ian Lind weighs in on this story. And he brings up a very good point regarding whether land owner Lum Yip Kee followed §514C-2 of the HRS, which kicks in if the owner decides to sell the land to another party (in this case, Iolani School) other than condo/co-op owners with leases that have not yet expired.

http://ilind.net/2009/07/04/saturday...ging/#comments

I know, the 1967 Hawaii Land Reform Act I cited earlier in the thread excluded condos and co-ops from the mandatory lease to fee conversion process. However, in this particular case of the Date-Laau apartment unit owners, the land owner decided to sell before the existing subleases expired, which may bring §514C-2 right of first refusal provision into play.

[Amati]

Re: Land Lease Renegotiation

There are about 101 reason's I'd not buy a home on lease land. This thread brings up around 10 of them.

[GeckoGeek]

Re: Land Lease Renegotiation

Many of us bought our land (ours was 10,000 sq ft) for around $50,000 against the suggestion of our community attorney.

I'm curious as to what the attorney suggested. Holding out for less?

[joshuatree]

Re: Land Lease Renegotiation

Don't be suprised if they start now sending out notification of the need to vacate in 2012. They will probably do that even if they have no intention of actually building yet. Since there are months and months of advance notice needed, they might start in on that process, and then in the end give out month-to-month extensions. That way, they keep the homes in place, but the minute they decide to build something new, they are set up to get everyone out immediately.

I believe Iolani owns the land under the Royal Iolani Condos because the tennis courts and parking for that complex sits on top the Castle Building, one of their campus buildings. I see no reason why Iolani would not redevelop the Laau purchase with a similar setup and offer some sort of housing compromise.

Not so fast. Ian Lind weighs in on this story. And he brings up a very good point regarding whether land owner Lum Yip Kee followed §514C-2 of the HRS, which kicks in if the owner decides to sell the land to another party (in this case, Iolani School) other than condo/co-op owners with leases that have not yet expired.

http://ilind.net/2009/07/04/saturday...ging/#comments

I know, the 1967 Hawaii Land Reform Act I cited earlier in the thread excluded condos and co-ops from the mandatory lease to fee conversion process. However, in this particular case of the Date-Laau apartment unit owners, the land owner decided to sell before the existing subleases expired, which may bring §514C-2 right of first refusal provision into play.

A little confused on this provision, does it merely require the landowner to offer the land to the condo/co-op owners first before selling to a third party? Or does the provision require a sign off from the condo/co-op owners when the landowner wants to sell regardless to who? I think the news articles have indicated the landowner offered a buyout to the condo/co-op owners in the past as one of them mentioned they couldn't afford the price?

[craigwatanabe]

Re: Land Lease Renegotiation

I'm curious as to what the attorney suggested. Holding out for less?

Actually yes. At the time KSBE was negotiating with Hawaii Kai residents to purchase their leasehold lots for $24,000 (for similar lot sizes) He thought we could get our Waialae Nui lots for the same price. Apparently not it seems.