Hawaii Real Estate State Practice Exam

What does the phrase "Reservation in favor of the state of Hawaii" imply about ownership of minerals?

1. The owner retains all mineral rights

2. The state has claim over all minerals

3. The owner can mine without restriction

4. The rights are shared between owner and state

The correct answer is: The state has claim over all minerals

The phrase "Reservation in favor of the state of Hawaii" signifies that the state holds certain rights over the minerals beneath the land, implying that the state has a claim over all minerals found in that area. This reservation indicates that the state retains ownership of the mineral rights, regardless of who owns the surface land. In essence, while an individual may own the land itself, they do not have the rights to extract or utilize the minerals located below the surface because those rights are reserved for the state. This is a common legal practice in real estate, especially in situations where mineral wealth is significant or where regulation over resource extraction is important for state management. Other options, while they suggest different relationships between mineral rights and ownership, do not accurately reflect the implications of a reservation for the state. Thus, the correct understanding hinges on recognizing that this phrase indicates state ownership of minerals, which aligns with common legal principles in property law related to mineral rights.