Hawaii Real Estate Tenancies or Ownership Interests

    All Hawaii real estate owned by a private party is identified through various forms of tenancies.  The four principal types of tenancies, or ownership interests, are: (1) tenancy by severalty; (2) tenancy in common; (3) joint tenancy; and (4) tenancy by the entirety.

    (1) Tenancy by Severalty.  When one person owns Hawaii real property it is referred to as sole ownership or ownership by severalty.  As the property is owned by one person only he or she alone can use, mortgage or sell the property as he or she desires.

    (2) Tenancy in Common.  This type of tenancy exists when an estate of land is held by two or more owners, referred to as tenants in common, with no right of survivorship.  Therefore, if one tenant in common passes away, that tenant in common’s share descends to his/her heirs or to the parties named in his/her will. 

    A tenant in common owns the Hawaii property by separate and distinct title, but with the unity of possession.  Thus, even though a tenant in common does not necessarily have the same proportionate share of interest, he or she still owns an individual undivided share of the whole. 

    A tenant in common has the ability to sell, give away, or will away his/her interest and the new owner simply becomes a new tenant in common with the other owner or owners.  If one tenant in common mortgages his or her interest in the Hawaii property it does not bind the others and merely creates a lien on his or her interest. 

    (3) Joint Tenancy or Joint Tenancy With Right of Survivorship.  A joint tenancy is intentionally created for two or more persons who are equally entitled to an undivided interest in a specified piece of Hawaii real property with the right of survivorship.  Thus, if one of the joint tenants should pass away, his/her rights and interest pass to the surviving tenant or tenants.  Since the deceased owner’s interest in the property is extinguished and is not inherited by the deceased owner’s heirs, there is no need for a probate.  The last living owner will own all the property, and on that owner’s death the property will form part of his/her estate. 

    In order to create a joint tenancy, language indicating such intention must be clearly stated, otherwise a tenancy in common will be created.  Either joint tenant has the right to break the joint tenancy, thereby converting it into a tenancy in common. 

    (4) Tenancy by the Entirety.  This tenancy is similar to a joint tenancy except that there are only two persons in the ownership and they must be husband and wife.  Upon the death of either spouse, the survivor automatically obtains title to the share of the deceased spouse free and clear of the claims of heirs and creditors of the deceased spouse. 

    Similar to a joint tenancy, the parties must specifically state that they wish to create such a tenancy, for a conveyance to a husband and wife does not automatically create a tenancy by the entirety with the right of survivorship. 

    The main benefit of tenants by the entirety is when the Hawaii real estate is held as tenants by the entirety the individual personal or business debts of either spouse may not be attached to the property.  Basically the marriage itself owns the property.  Only joint debts by the couple can attach to the Hawaii real estate. 

    As you can see, there are a number of issues that you will need to consider either as a buyer or seller of Hawaii real property.  An Hawaii attorney can assist you in identifying those issues and discussing the risks involved.  Contact us to be your Honolulu lawyer.