What is Fee Simple?
A. It’s the type of ownership where a buyer purchases a property outright and has the right to use the property indefinitely. Of course the buyer must pay his/her mortgage, real estate taxes etc. to retain the right to the property. Q. What do I need to know if I’m going to purchase Hawaii leasehold real estate? A. There are several things: • Is the lessor offering the fee simple interest? If so, what is the fee price? • What is the time period left on the lease? A property that was built in the 1960’s with a 50 year lease may be nearing the end of its lease term. • What’s the monthly lease amount? When buying leasehold, the lessee (you) pays the lessor a monthly fee for the lease – similar to rent. • Lease renegotiation dates. When a property was initially built, for example a building constructed in the 1970’s, the monthly lease rent may have been $25. Periodically, the lease terms can be renegotiated, based on market values. The lease rent for that same property today might be $250.
Fee simple is a term used to describe the ownership interest in a given property that is extended with no limitations of any kind on the recipient. For example, an heir who inherits property with this classification is free to retain the property, sell all or part of it, or lease it to a third party. However, fee simple does not free the recipient from the responsibility of meeting any and all requirements set by local and national governments, such as paying taxes on the property or observing any other requirements necessary by law to own property within the jurisdiction. For the most part, a fee simple is utilized in countries that are categorized as common law nations. Within settings of this type, this type of ownership interest is often the most complete option available without the granting of an allodial title by the proper governmental regulating agencies. The arrangement does not usually limit the government’s right to eminent domain or the ability to seize control of the prop
