If you are buying a leasehold property, does it have a Surrender Clause?
If it does, what does that mean?
Not every leasehold property will have one so to say this is important to find out is the understatement of the year.
A Surrender Clause typically means that at the end of the lease the property, and any “improvements” which is another way of saying the home or condominium that the land is on, reverts back to the landowner with no compensation to whoever owns the property.
Can the land ever be for sale? It could and in the case of two condominium complexes here in Poipu Beach that actually happened. The Makahuena and Poipu Shores were both leasehold properties when they were initially built in the late 1970’s. Poipu Shores condominiums converted from Leasehold to Fee Simple in 1987 when the land was offered for sale with prices starting at $15,000 per unit.
If you buy a leasehold property today with a Surrender Clause could it be converted over to Fee Simple like those two complexes did? I say don’t count on it.
You never want to buy a property based on what might happen. If there are decades left on the lease anything can happen but you never want to buy on the hope that what will happen is anything different than exactly what the lease says.
So why would anyone buy a leasehold property? That is going to be in my next video so like this video and subscribe to whatever channel you are watching this on to make sure you catch this one.
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Aloha! 
Lynda Gill RS Lic. #63088
Hawai’i Life Real Estate Brokers 808.346.0056
LyndaGill@HawaiiLife.com
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