Definition of fee simple
fee simple (plural fee simples)
- The private ownership of property (real estate) in which the owner has the right to control, use and transfer the property at will.
A fee simple (or fee simple absolute) is an estate in land, a form of freehold ownership. It is the most common way real estate is owned in common law countries, and is ordinarily the most complete ownership interest that can be had in real property short of allodial title, which is often reserved for governments. Fee simple ownership represents absolute ownership of real property but it is limited by the four basic government powers of taxation, eminent domain, police power, and escheat and could also be limited by certain encumbrances or a condition in the deed. How ownership is limited by these government powers often involves the shift from allodial title to fee simple such as when uniting with other property owners acceding to property restrictions or municipal regulation.
Types of fee simple
If previous grantors of a fee simple estate do not create any conditions for subsequent grantees to own the conveyed property in fee simple title, which is commonly the case these days, then the title is called fee simple absolute. Other fee simple estates in real property include fee simple defeasible (or fee simple determinable) estates. A defeasible estate is created when a grantor places a condition on a fee simple estate (in the deed). Upon the happening of a specified event, the estate may become void or subject to annulment. Two types of defeasible estates are the fee simple determinable and the fee simple subject to a condition subsequent. If the grantor uses durational language in the condition such as "to A as long as the land is used for a park" then upon the happening of the specified event, the estate will automatically terminate and revert to the grantor or the grantor's estate; this is called a fee simple determinable. If the grantor uses language such as "but if alcohol is served" then the grantor or the heirs have a right of entry, but the estate does not automatically revert to the grantor; this is a fee simple subject to a condition subsequent. In the United States many of these concepts have been modified by statute in some states. Generally speaking, fee simple determinable was preferred by courts in the Common Law of the early United States. Recently, that trend has reversed, and most courts in the United States today will find a fee simple subject to condition subsequent (instead of a fee simple determinable) in situations where the conveying document's language is unclear.
It is often said that no rent or similar obligations are due from the owner of property in fee simple. That is only partially true. For example, a rentcharge may exist requiring a freeholder to pay a fixed sum of money closely resembling rent, and many jurisdictions have created financial obligations that may be imposed on a freehold estate. For instance, in England and Wales, the estate charge. In the United States, fee simple owners are subject to property tax and its funds directed to the municipality's general fund. Other local tax assessments called "specials" may be assessed in addition to the property tax to be applied to specific purposes such as road and water/sewer improvements. Real estate owned as a condominium is usually similarly owned in fee simple, but typically subject to rules in the declaration of condominium or created by the condominium association, such as paying required monthly fees for maintaining the property's common areas.
Source: Wiktionary. Published under the Creative Commons Attribution/Share-Alike License.