How small a speck of land are we buying?

Factual Questions
1

Okay, as some of you may know, I hail originally from Hawaii. In paradise (which is to say, Hawaii), land is scarce so a great many of us live in skyscraper condominiums. (Not to LA or NY scale - max height for any building in HI is about 400-450 feet, IIRC.)

That being said, my parents live in an apartment in one of these condominiums and they, and other apartment owners, are fighting to change the land associated with their respective apartments from leasehold to fee simple, meaning they can buy the land under their apartments. Now, this apartment building is is 35 stories tall (36 if you count the bi-level penthouse as two floors), with 17 units per floor, so could somebody please explain how this whole property owning thing works in this case? I mean, I’m assuming they’re not buying the real estate that is the downstairs neighbor’s ceiling, right?

Along similar lines, if they do get the land converted to fee simple and do buy the land, does this mean that the foundation that currently owns the plot of land under the building can never sell it? As in, selling the whole lot to someone else, at which point the building could very well be torn down regardless of the individual owners so-called ownership?

2

I’ll admit to being less than coherent when I wrote this, but it’s still understandable, isn’t it? If not, please let me know. Otherwise I’ll just assume that the SDMB simply doesn’t have any real estate agents… :frowning:

And why “real estate” - is this as opposed to “imaginary estate”?

3

I am a commercial RE agent but I am not by any means an expert in the legalities of high rise residential apartment ownership in Hawaii and I think your question is more suited for a lawyer (and a Hawaii lawyer at that) than an agent as such. Having said that property laws vary tremendously by state and I’m sure Hawaii has some peculiarities of it’s own, in general however:

If they convert the currently land leased underlying property to “fee simple” and buy the land they (the purchasers) own the land and have control over the disposition of the property including sale or non-sale of same.

If they do “own” their apartment units the description of specifically “what” they own is normally outlined in the condo deed(s) and condo documents which they should have a copy of. Typically condo owners own their own dwellings mid-wall to mid-wall - mid-floor to mid ceiling - beyond that for both exterior and interior improvements these are owned “in common” and a percentage of the pro-rata “common area” is assigned to each condo unit owner (typically based on their respective sq ft condo unit size as a percent of the overall total) for the purposes of determining condo fees.

4

Oh… and per the “how small” question if the land is purchased the “condo association” will likely be the named owner and (if they don’t already) your parents will have to pay a pro-rata share of any local and state property taxes (if applicable in Hawaii) most likely based on their pro-rata condo ownership percentage. So just take the total land area and multiply it by the percentage of the apartment condo assoc they own and that should be your answer, and yes with almost 600 condos it might be a fairly small sq ft number per unit.

5

I know nothing about condominiums in Hawaii, though I know a bit about New York condominiums, and I believe the applicable principles of condominium law are probably similar. However, I understand that a great deal of the real property in Hawaii is held under long-term ground leases, a pattern unusual in the rest of the U.S. (though existing in England and some parts of Pennsylvania stemming from the original grant of land to William Penn).

In New York, the owner of land (known as the “base lot”) can file in the real estate records office a document known as a declaration of condominium, and certain related documents (collectively, the “declaration”). A condominium sponsor must also register the condominium with the Attorney General’s office and meet certain other requirements before offering units for sale to the public.

The declaration will divide the base lot and any buildings thereon (or to be constructed thereon) into a number of units, and provide a detailed description of what a unit consists of. For instance, one declaration I have handy states:

The declaration will also describe certain features of the property and buildings as “common elements” and assign each unit a percentage representing its ownership interest in the Common Elements. The declaration will also provide for what happens in certain circumstances, including if the unit owners wish to revoke the declaration, and if the bulilding is destroyed by casualty (fire, flood, etc.) or condemned.

Once the declaration is accepted, the base lot will be legally considered to be split into several parcels of real estate, in a similar manner to the way the owner of a large parcel of land can subdivide it into building lots. The fact that a parcel is a cube of space a dozen floors in the air, rather than a plot of land, is really of no legal significance. A condominium unit may be sold, mortgaged and otherwise conveyed in the same manner as regular real estate, subject to certain restrictions contained in the declaration.

Now I’m guessing that base lot of your parents condominium is owned by a foundation and leased under a long-term ground lease, something that I believe would be prohibited in New York. Again, I know nothing about Hawaii law, but I suspect that there are legal provisions that protect “owners” of property subject to such long-term ground leases. If the foundation holding the ground lease were to transfer its interest to another, the ground lease payment would go to the new ground lessor, but the new ground lessor would have no rights greater than those held by the existing ground lessor.

If your parents’ building is trying to get the ownership from leasehold to fee simple, what I think it is trying to do is to buy the ownership interest of the foundation that owns the base lot. If they succeed, I believe the foundation will no longer have any interest in any part of the property.

I hope this helps.