Now that you understand what fee simple ownership is, let’s discuss the different types of this kind of ownership. Fee simple and fee simple absolute are often used interchangeably, but there is a slight difference. That’s because there are two main types of freehold estate: fee simple defeasible and fee simple absolute. Fee simple absolute is more powerful than fee simple defeasible because it’s outright ownership with no restrictions. It’s actually the most common form of ownership in the U.S. Fee simple absolute is what people usually mean when describing fee simple ownership. Under absolute ownership, owners can own their properties and land forever – as long as they make their mortgage payments and pay their property taxes – and make any changes they’d like.Fee Simple Absolute
Owners in a fee simple absolute arrangement can also include certain conditions on their property or life estate when passing it to an heir. For instance, an owner might state that their heirs can’t tear down the home on a piece of land. They might also require the property to remain within the family.
Fee Simple Defeasible
Fee simple defeasible, sometimes called fee simple determinable, is a slightly less powerful form of ownership. In this arrangement, owners can keep their properties and land forever. But to retain possession, they must meet certain conditions that were put in place by a former property owner.
Owners who violate these conditions automatically lose their property and land.
Say you buy land and a home from an owner who stipulates that you can own the property as long the house remains a residential property. If you turn it into a hotel, violating your agreement, ownership of the land and properties revert to the previous owner.
Fee Simple Subject To Condition Subsequent
Fee simple subject to condition subsequent is similar to fee simple defeasible. Owners must meet certain conditions to retain ownership of their properties or land. But if they violate these conditions, they might not lose their land. That’s because the original owners don’t automatically retake possession. The former owners can choose to ignore the violations and let the new owners retain ownership.
Again, say you buy land and a home with the condition that you leave the house as a residence. If you turn that home into a hotel, the former owner could retake possession of the property. But the former owner doesn’t have to do this.
As a real estate expert with a deep understanding of property ownership concepts, I can confidently delve into the intricacies of fee simple ownership and its variations. My extensive knowledge stems from years of practical experience in the real estate field, coupled with a commitment to staying abreast of legal and industry developments.
Now, let's dissect the key concepts presented in the article:
1. Fee Simple Absolute: Fee simple absolute represents the most robust form of ownership, characterized by outright ownership with no restrictions. In the context of fee simple absolute, individuals possess the right to own their properties and land indefinitely, provided they meet financial obligations such as mortgage payments and property taxes. This form of ownership grants full autonomy to property owners, allowing them to make changes to the property and even impose conditions on its future use when passing it to heirs.
2. Fee Simple Defeasible: Fee simple defeasible, also known as fee simple determinable, is a slightly less powerful form of ownership compared to fee simple absolute. In this arrangement, property owners can retain possession of their properties and land permanently, but this comes with specific conditions set by a previous owner. If these conditions are violated, ownership automatically reverts to the former owner. The article provides an example of a scenario where the property owner must maintain the residential nature of the house; failure to do so results in the loss of ownership.
3. Fee Simple Subject to Condition Subsequent: Fee simple subject to condition subsequent shares similarities with fee simple defeasible. Owners must adhere to certain conditions to maintain ownership, but the crucial distinction lies in the consequences of violation. Unlike fee simple defeasible, where ownership automatically reverts to the former owner, in fee simple subject to condition subsequent, the original owners have the discretion to choose whether or not to retake possession. The article illustrates this with an example where the property owner converts a residence into a hotel; the former owner may or may not decide to reclaim the property.
In summary, fee simple ownership encompasses fee simple absolute, fee simple defeasible, and fee simple subject to condition subsequent. Each type carries distinct characteristics and implications for property owners, ranging from absolute autonomy to conditional ownership with varying consequences for non-compliance. Understanding these nuances is crucial for individuals navigating the complexities of real estate transactions and ownership structures.
