Hawaii Real Estate State Practice Exam

When converting a leasehold condominium to fee simple ownership, must the landowner offer the association a first right of refusal?

1. Yes

2. No

3. Only in some cases

4. Only if specified in the lease

The correct answer is: Yes

When a leasehold condominium is being converted to fee simple ownership, the law in Hawaii requires that the landowner must offer the association a first right of refusal. This provision is meant to protect the interests of the condominium association and its members, allowing them the opportunity to purchase the land and potentially convert their leasehold interests into fee simple ownership without outside interference. This first right of refusal is significant because it empowers the association to maintain control over the property and ensures that the members have a fair chance at ownership rather than the land being sold to a third party. By doing this, the law helps safeguard the investment of the condominium owners, allowing them to have a voice in the ownership transition process. The requirement is also reflective of broader principles in real estate that seek to provide stability and security for existing leasehold owners, making it an important aspect for anyone involved in Hawaii real estate transactions to understand.