A buyer, Kenji, has signed a buyer's agency agreement with Salesperson Noa in Hawaii. Noa discovers that a property Kenji is interested in is a leasehold property with a ground lease expiring in 18 years. Noa knows that leasehold properties with short remaining terms can be difficult to finance and typically sell at a significant discount. What is Noa's obligation regarding this information?

Correct Answer

D) Noa must disclose the leasehold status and its implications to Kenji, as it is a material fact affecting Kenji's interests.

As Kenji's buyer's agent, Noa owes Kenji fiduciary duties including full disclosure of all material facts relevant to Kenji's interests. Hawaii's unique leasehold system makes the lease expiration date, ground rent, and financing implications critical material facts. A leasehold with only 18 years remaining is a significant concern affecting value and lendability, and Noa must proactively disclose and explain these implications to Kenji under Hawaii Administrative Rules Title 16, Chapter 99 and HRS Chapter 467.