Kenji is selling his Maui home, which sits on leasehold land with a ground lease expiring in 18 years. He provides the buyer with the standard HRS 508D seller disclosure statement covering the physical condition of the property. His agent believes no additional disclosures are necessary because the 508D form was completed. Which statement most accurately reflects Hawaii disclosure requirements in this situation?

Correct Answer

D) Kenji must also separately disclose the leasehold status, lease expiration date, and ground rent terms, as these are material facts affecting value and financing

In Hawaii, leasehold status is a material fact that significantly affects property value and a buyer's ability to obtain financing. The HRS 508D disclosure statement covers physical condition and known defects, but the leasehold nature of the property — including the lease expiration date, ground rent amount, and any escalation clauses — must also be disclosed as material facts. Hawaii's unique leasehold system means buyers need this information to make informed decisions, and failure to disclose it can expose the seller and agent to liability.