Leases

Question 1

Course overview

Types of leaseholds are compared.

Ground lease considerations and how they affect real property

Rights and responsibilities of landlords and tenants are detailed

Answer 1

Objectives

List type of leasehold estates and give examples
Explain the disclosure which must be made in real estate transaction involving ground lease.

Describe the basic responsibilities and remedies afforded to residential landlords and tenants

Explain the circumstances under which a security deposit may be retained

List timeframes required for terminating a rental agreement.

Question 2

Leases

4 leasehold estates:
Estate for Years
Periodic Estates
Estate at Will
Estate at Sufferance

Answer 2

Types of leasehold estates

4 types
1. An estate for years: lease fir a definite and fixed period of time. Automatically terminates at stated expiration date

2. Periodic Estate aka periodic tenancy yr to yr or mo. To increase or terminate
   Lease landlord required to give45 day written notice. If mo.to mo. Must be given 15 days written notice

Question 3

3. Estate at will or tenancy at will
   An estate at will exists when a tenant agrees to occupy a property
   Until
   It is sold or rented to another person
   The owner constructs a new building
   The owner needs the land for his own use
   The tenant can find a new home. Or
   While a holdover tenant and landlord negotiate a new lease after an estate for years has terminated

If no specific rent agreed upon, the tenancy may be terminated at any time by either party giving a 10 day notice to quit. An estate at will is not assignable or inheritable

Answer 3

4. Estate at Sufferance or tenancy by sufference is created when a tenant stays after the lease expiration without consent of the landlord.

Question 4

GROUND LEASES

are leases of land on which the tenants own the buildings. Long-term ground leases are common in Hawai’i. The leases run 55 years, with rent adjusted every 10 to 20 years.

A surrender clause in a ground lease will specify what will happen to improvements on the land upon termination of the ground lease.

Answer 4

These leases will grant property rights beyond possession:

Although such property is personal property under common law, it is treated as real property in Hawai’i. In the assessment of property taxes, the lessee is considered the owner of real property that is leased 15 years or more.

The Hawai’i Land Reform Act provides that residential leases are freely assignable.

Residential leases often permit lessees to mortgage or sell their leasehold estates. With fixed rental period of sufficient length (20 years or more) , a leases leasehold estate may be mortgaged.

Question 5

Affordable Housing

Hawaii Public Housing Authority (HPHA) manages federal and state public housing programs including Section 8 and senior housing

Answer 5

and the
Hawai’i Housing Finance and Development Corporation (HHFDC) develops and finances low and moderate-income housing projects and administer homeownership programs.

Question 6

Residential Landlord-Tenant Code

Landlord and tenant must

Act in good faith in the performance and enforcement of their rights and duties

Comply with housing laws and building laws dealing with health and safety)

Answer 6

Taxes and fees

Landlord pays 9.25% Transient Accommodations Tax (TAT)
Accommodations used for less than 180 days.

Landlord pays General Excise Tax on rent received 4.712%

Question 7

Landlord has 12 business days after receipt of written notice

Emergency repairs ( those relating to plumbing, electricity and major appliances). Must begin within 3 business days after tenants oral or written notice.

Answer 7

Health or Safety repairs if not done immediately, the tenant can call Dept of Health or another state or county Dept. For an inspection. If there is a violation, then landlord must begin repairs within 5 days of receiving written notification.

In health and safety tenant has option to get 2 written estimates at least 5 days prior to beginning work and use provider with lower estimate. Upon providing receipts to landlord, the tenant may deduct the greater of the full cost of repairs or$500.0 from his rent.

Question 8

Tenant leaves possessions
Landlord may sell, donate them after letting tenant know by mailing intent to last known address. After notice 15 days before selling must advertise for 3 consecutive days in general newspaper

Answer 8

In terminating a mo. To mo., tenant must give 28 days written notice and pay rent until the end of date stated in the notice. A landlord must give 45 days notice to terminate or 120 days notice if he plans to demolish, convert to condo building or convert it to transient rental.