Real Estate PL Topic - Fee Simple Estate

Fee Simple Estate

Fee Simple Absolute

A fee simple absolute is the highest interest in real estate recognized by law. Fee simple absolute is ownership in which the holder is entitled to all rights to the property by law. This estate is intended to run forever. Upon the death of the owner of a fee simple absolute, the property interest passes to the decedent’s co-owner, if there is one and the co-ownership was accompanied by a right of survivorship; the person or persons specified in the decedent’s will (the devisees); or if the decedent has left no will, to the person or persons designated by the state’s law of intestate succession. The right to use a fee simple absolute is limited only by public and private restrictions, such as zoning laws and restrictive covenants.

Fee Simple Defeasible

A fee simple defeasible estate is a qualified fee estate that is subject to the occurrence or nonoccurrence of some specified event. There are two categories of defeasible estate: fee simple determinable and fee simple subject to a condition subsequent.

Fee simple determinable

A fee simple determinable is a fee simple defeasible estate that may be inherited. This estate is qualified by a special limitation (which is an occurrence or event). The language used to distinguish a special limitation – words such as so long as or while or during – is the key to creating this special limitation. The former owner retains a possibility of reverter, which is an interest that can be transferred to someone else. If the limitation is violated, the holder of the possibility of reverter (or heir or successor) can reacquire full ownership with no need to bring a legal action in court. The title is automatically transferred to the person who holds the possibility of reverter.

Fee Simple Subject to a Condition Subsequent

With a fee simple subject to a condition subsequent, an owner gives real estate on condition of ownership, which means there is a difference in the way the estate will terminate if there is a violation of the condition. With a fee simple subject to a condition subsequent, the estate does not automatically terminate upon violation of the condition of ownership. The owner (or the owner’s heir or successor) has the right of reentry but must bring a legal action in court to assert this right.

Fee simple determinable:
"So long as”
“While”
“During”
Fee simple subject to a condition subsequent:
“on condition that”

Watch this video to review.