Fee Simple Defeasible: Definition in Real Estate

fee simple defeasible
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Fee simple defeasible or defeasible fees in real estate are legal terms and conditions fixed on a type of property ownership. If there is a violation in the conditions of ownership, the property goes back to the grantor or a specified third party. In this article, we will discuss extensively the different types of fee simple defeasible estate with the example of fee simple inheritable. You may also want to know the difference between the absolute vs the fee simple defeasible.

What Is Fee Simple Defeasible?

A fee simple defeasible estate is a freehold estate in which a new owner, the “grantee” inherits real estate from the previous owner “the grantor”.  The property ownership is subject to certain conditions in fee simple defeasible. The owner retains all of the powers, rights, and interests of ownership; until a specified condition is met or an event occurs. If there is a violation in the event the property reverts to the grantor.

Fee Simple Absolute vs Fee Simple Defeasible

The difference between a simple absolute vs a fee simple defeasible is that a fee simple absolute is the maximum type of property ownership that one can obtain. A person owns a property in a fee simple absolute until he or she transfers it to someone else. Property owners in this area own both surface and mineral rights, with no restrictions. In fee, simple absolute one can use the land the way he wants to which is irrevocable by others. However, the land would still be susceptible to non-property concerns such as taxes or the grantor use it to settle an outstanding judgment against you. 

A fee simple defeasible, on the other hand, is a type of property ownership in which the owners take away the assets as a result of the occurrence or non-occurrence of a special event. In fee simple defeasible the owner holds the estate until a certain condition is met while fee simple absolute defeasible is unbound by any conditions.

Rights In a  Fee Simple Defeasible Estate

Besides the condition mentioned as part of the fee simple defeasible estate in real property, the owner’s rights and powers are effectively the same as in a fee simple absolute estate. The owner who has a title in fee simple defeasible has a possessory interest in the property both now and in the future.

The owner owns and controls all interests and rights in the property and has the authority to sell or transfer these rights at any time. However, they can also leave a fee estate to the owner’s heirs. A perpetual estate is hence a defeasible fee. The condition, however, remains a part of the defeasible fee estate. This means that succeeding owners or successors are also subject to the condition as part of the estate’s ownership.

Fee Simple Defeasible Estate in Real Property

Fee simple defeasible estate in real property is a type of property ownership in which the grant of title or the duration of ownership depends on the fulfillment of a predetermined condition. Contracts must include words of conveyance to accurately reflect the parties’ intent. These terms demonstrate intent to transfer property. A fee simple holder owns the property as a fee simple subject to that condition. If there is a violation in the event. The property will go back to the original grantor or a specified third party.

There are 3 types of fee simple defeasible, they are

  • Fee simple defeasible inheritable or determinable 
  • The fee defeasible subject to a condition subsequent
  • Fee simple defeasible subject to an executory limitation

Fee Simple Inheritable or Determinable

A fee simple defeasible inheritable is an estate that will end when the specific outcome or condition occurs. The interest will revert to the grantor or the grantor’s heirs. Normally, a reverter possibility follows a simple inheritable fee. As a result, the property does not instantly pass back to the original owner. Instead, if there is a violation during the event. The original owner has the opportunity to reclaim ownership of the property. The owner maintains an interest in a fee simple determinable estate “as long as” they meet the condition. Ownership is contingent on adhering to a set of rules regularly. “As long as” or “while” are key catchphrases that signify a fee simple determinable or inheritable estate.

Example of Inheritable Simple Fee Defeasible

If an owner sells a property to a school “as long as” it is used for educational purposes, the school and all subsequent owners of the fee must use the property for educational purposes. 

The grantor transfers property to X “while” some limiting event occurs or does not occur. Tom deeds property to the public school for “as long as” the school district keeps a public high school on the property. The former owner/grantor Tom will retain an INTEREST in the property because if the public school closes, the property reverts to Tom (or heirs). The grantor’s (Tom’s) stake in the real estate refers to the “possibility of reverter”.

Fee Simple Defeasible Subject to a Condition Subsequent

A fee simple subject to a subsequent condition is analogous to a fee simple determinable. Except that if there is a violation in the condition statement, the original owner has the opportunity to reclaim the property. As a result, the property does not instantly pass back to the original owner. Instead, the original owner has the opportunity to reclaim ownership of the item, if there is a violation in the condition. 

As a result, a fee simple that is subject to a condition subsequent does not automatically terminate upon the occurrence of the condition. The future interest refers to the “right of reentry” or “right of entry,”. Also, the property only reverts to the original grantor if he exercises his right 

The right of entry is not automatic, but he must use it to terminate the fee subject to the following conditions. To use the right of entry, the holder must take significant efforts to reclaim possession and title, such as by filing a lawsuit. Physical entry is not necessary, but the possessor must do more than simply declare an intent to reclaim.

Example of Fee Simple Defeasible Subject to a Condition Subsequent

To pass a fee subject to a subsequent condition, the words of conveyance must declare that the original owner has the right to seize the property if there is a breach in the condition. A fee simple subject to subsequent conditions would be; A to B, but if the property is used for commercial reasons, A has a right of reentry. Hence, as long as the property is not used for commercial purposes, B has a fee simple interest in it. If, on the other hand, the property is used for commercial reasons, A may regain it.

Fee Simple Subject to an Executory Limitation

A fee simple defeasible estate in real property subject to an executory limitation is an estate that terminates when a certain condition is met and subsequently passes to a third party. The grantor will not receive the interest. However, If the grantee does not meet the requirement, he loses the interest and the third party automatically acquires it. To create a fee simple subject to executory limitation, the original owner uses durational or conditional phrases to establish a condition. Also a third person to who will receive the property if they didn’t keep to the condition. The real property, like a fee simple defeasible determinable, moves immediately and does not necessitate any action on the side of the third party. The third-party interest refers to the “remainder.”

Example of Fee Simple Defeasible Subject to an Executory Limitation

Here is an example of a fee simple subject to executory limitation. Ade gives Blackacre to A and A’s heir; but, if A ever accepts a bar from C, B and successors receive the Blackacre.

Ade is the original owner in this case. He grants A a fee simple on the condition that he does not accept a bar from C. However, unlike a fee subject to a subsequent condition, a third party receives a Blackacre (B) rather than the grantor (Ade) if the condition is met. Moreover, unlike a fee simple subject to a future condition, B then automatically acquires the interest in Blackacre and does not only have the right to sue for re-entry.

Conveyance of Blackacre by the original grantee retains the original limitation with it, but the future grantee’s interest may become fee simple absolute upon the death of the original grantee. For instance, A may sell Blackacre to D. If A later accepts C’s offer for a bar, Blackacre immediately transfers to B. However, they may not meet up with the requirement if A dies without ever accepting a bar from C. D would then be the owner of a fee simple absolute.

Conclusion

A fee simple is a conveyance of property with stipulations on it. A fee simple defeasible holder owns the property as a fee simple subject to that condition. If the condition infringes, the property will return to the original grantor or a chosen third party. However, note the difference between fee simple absolute vs fee simple defeasible estate in real property. While fee simple absolute is unconditional fee simple defeasible is conditional.

Fee Simple Defeasible FAQs

What is an example of a fee simple defeasible?

An example of a fee simple defeasible is this. If a warranty deed conveys 123 ABC Street for as long as it is used as a school. The land reverts to the grantor once 123 ABC Street is no longer used as a school. This would be a determinable fee simple estate.

What are the two kinds of defeasible estates?

Two types of defeasible estates are the fee simple determinable and the fee simple subject to a condition subsequent.

What is a defeasible easement?

WA Determinable Easement is an easement that will expire if a specific event or contingency occurs.

What are the two kinds of defeasible estates?

Two types of defeasible estates are the fee simple determinable and the fee simple subject to a condition subsequent.

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