Fee Simple Estate
Because fee simple estates are of unlimited duration, they are said to run “forever.” Upon the death of the owner, a fee simple passes to the owner’s heirs or as provided by will. A fee simple estate is also referred to as an estate of inheritance (because that is how it passes unless the owner chooses to sell the property) or simply as fee ownership. There are two major divisions of fee ownership: fee simple absolute and fee simple defeasible.
Fee simple absolute
A fee simple absolute estate is the highest interest in real estate recognized by law. Fee simple ownership is absolute ownership; the holder is entitled to all rights to the property. It is limited only by certain public and private restrictions, such as zoning laws and restrictive covenants.
Fee simple defeasible
A fee simple defeasible (or defeasible fee) estate is a qualified estate that is, it is subject to the occurrence or nonoccurrence of some specified event. Two categories of defeasible estates exist:
- those subject to a condition subsequent
- those subject to a fee simple determinable (qualified by a special limitation).
Condition Subsequent — But if
A fee simple estate may be qualified by a condition subsequent. This means that the new owner must not perform some action or activity. The former owner retains a right of re-entry so that if the condition is broken, the former owner can retake possession of the property through legal action.
An owner grants some land to a buyer “on the condition that there be no consumption of alcohol on the premises.” This is a fee simple subject to a condition subsequent. If alcohol is consumed on the property, the former owner has the right to reacquire full ownership. It will be necessary for the grantor (or the grantor’s heirs or successors) to go to court to assert that right.
Determinable — As Long As
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. If the limitation is violated, the former owner (or heirs or successors) can reacquire full ownership with no need go the court. The deed is automatically returned to the former owner.
The right of reentry and possibility of reverter may never take effect. If they do, it will be only at some time in the future. Therefore, each of these rights is considered a future interest.
