Question

Mariah is in year 23 of a 55-year leasehold interest in her Hawaii property. She wants to move out of state. Which of these is true?

a) Her landlord must buy her out of her ownership interest.
b) Her landlord must convert the property to fee simple ownership.
c) She may sell her leasehold interest, and the lease term resets to the original number of years.
d) She may sell her leasehold interest subject to the years remaining on her lease.

Answer 1

Mariah can sell her leasehold interest, but the remaining term of the lease does not reset and the buyer would be subject to the remaining 32 years of the lease term.

Step-by-step explanation:

If Mariah is in year 23 of a 55-year leasehold interest in her Hawaii property and wants to move out of state, the correct statement is that she may sell her leasehold interest subject to the years remaining on her lease. This means that the person buying the leasehold from Mariah would take over the lease with the remaining 32 years. There is no requirement for the landlord to buy her out, nor is there any requirement to convert the property to fee simple ownership. Additionally, when Mariah sells her leasehold interest, the lease term does not reset; the buyer steps into her position in the existing lease.