Brief history
Hawaii is the only state in the Union that maintains a central location for all real estate deeds. All other states delegate this responsibility to the county level. Hawaii’s unique form of registration dates back to the Kingdom of Hawaii’s original land tenure system. All the land was owned by the King, but it was available to everyone else. The concept of private property did not exist.
That changed with the Great Mahele. Westerners pressured the Hawaiian government to adopt a private system of land ownership. Bowing to that pressure, between 1845 and 1848 King Kamehameha III divided the land between the Kingdom, high-ranking chiefs, and the territorial government. This was called the Ka Mahele now known as the Great Mahele. Ka Mahele translated is “the division”.
There are compelling arguments that the native Hawaiians did not receive their fair share from the Greater Mahele. Periodically, Native Hawaiian rights groups or individuals challenge the established land ownership system. These challenges create rumors and innuendo that lead to confusion and uncertainty.
Due to the confusion determining ownership of land and similar names, the Land Court was established in 1903. The availability of title insurance has dramatically reduced the need for judicial determination and registration with the Land Court.
Hawaii Recording System
Hawaii has three methods for changing title to real estate. The Regular System gives “notice” of change of title. Deeds registered in the Land Court system are guaranteed by the State of Hawaii. Documents registered in both systems are called Dual System Registration.
property types
Hawaiian Real Estate is owned by freehold, as a leasehold interest or as a timeshare.
Shared time
Timeshares are fractional vacation ownership interests in a resort. Fractional interest is typically the right to occupy a one- or two-bedroom unit for one week, each year. A unit might have 52 owners. Buyers are given ownership as “Timeshare Estate” or as “Timeshare Use.” Timeshare ownership is granted by deed and is real property ownership. Timeshare use ownership is granted by contract and the owner has a license or membership interest in the timeshare resort. Timeshare use is not real estate ownership.
leases
Leasing interest is the right to use the land for a specified number of years, typically 55 to 75 years. The person who owns the lease must return the land to the actual owner of the land at the end of the lease. The lessee owns the improvements to the land, but not the land itself.
Ownership in a cooperative or multi-family unit is often acquired through a rental interest. Leasing interests are conveyed through an apartment lease. An apartment lease goes by many names: apartment lease, apartment lease and ground lease, condominium deed of conveyance, apartment deed and ground lease, or home lease.
single fee
Real estate held in fee simple is the most common form of ownership and what a person usually thinks about what it means to own real estate. The person owns all the land and the entire building. In the past, property transfers had the words “simple fee” on them. Fee simple meant that the use of the land and buildings by the new owner was unrestricted of any kind. Today, transfers are granted subject to the constraints of an integrated society, such as zoning restrictions and access by utilities, local governments, and subsurface mining rights holders.
Typical freehold properties are single-family homes and condominiums. Single family homes are what you’d expect, the land and home are jointly owned by a single owner. Condominiums are multiple dwellings owned by multiple owners with a “common area” owned and shared by all. The common areas are; sidewalks, parking lots, swimming pools, barbecue areas, laundry facilities, and recreational areas.
Today, fee simple concessions are transferred with a deed of guarantee or a deed of resignation. A person who transfers property with at least a warranty deed warrants that he or she is the actual owner and is conveying clear title. Warranty deeds are accompanied by title insurance. Warranty deeds are used in bona fide sales.
Quit Deeds are unsecured transfers of ownership. The grantor basically conveys any property he or she may have. Abandonment claims are essentially the owner moving away from the property. The new owner takes the property “as is.” Transfers from one spouse to another are often claimed by waiver.
Time shares are often conveyed with a resignation deed. There is limited tradability for time shares, so there is no real selling opportunity. To avoid paying annual maintenance fees, the owner gives the property away.
Ohana Housing
A final type of property is the Ohana Dwelling or Grandma’s Cottage. This is a separate building on the property from the main house. It is usually much smaller and autonomous. It can be rented or occupied by a relative, such as the grandmother.