These feudal landholdings were eventually abolished. What remained was “simple” or pure ownership, with no strings attached. The duration of fee simple ownership isn’t limited, and you can pretty much do whatever you like on the property as long as you’re not breaking the law or otherwise infringing on public welfare. You’re free to use the property, sell it, rent it out, or leave it to your heirs. Other laws can limit fee simple ownership, however. Your free will with the property doesn’t mean that you can murder someone in your basement with impunity. Others are still free to place liens against the property if you fail to pay property taxes or if a creditor gets a judgment against you for money you owe. Threats to ownership can surface regardless of how you hold the title, but fee simple ownership offers the most protection.
Types of Fee Simple Ownership
Fee Simple Absolute
Fee simple absolute is property ownership that allows you, the owner, to have complete control over your property without any restrictions. The owner can do anything with their property as long as it doesn’t interfere with others’ rights. The owner can sell, dispose of, mortgage, lease or otherwise transfer their property without anyone else’s permission. When there are restrictions, fee simple conditional may fall into one of these categories below:
Fee Simple DefeasibleFee Simple DeterminableFee Simple Subject to Condition SubsequentFee Simple Subject to Executory Limitation
Fee Simple Defeasible
This type of ownership has two conditions. The first condition is that it can be transferred to another party without any restrictions and the second condition is that it will revert to its original owner if the other party does not maintain or use the property for a specific period of time.
Fee Simple Determinable
This type of ownership will terminate automatically and revert back to its original owner after a particular condition is met, such as a certain number of years passing or an event occurring. This type of reversionary ownership will often terminate automatically and revert back to its original owner after a death or bankruptcy.
Fee Simple Subject to a Condition Subsequent
This type of ownership is contingent on an event occurring in the future, such as the owner’s death. If you break a condition of this type of fee simple, you could lose the property title.
Fee simple subject to a condition subsequent with time that is measured by a specific number of years: This type of ownership will terminate automatically and revert back to its original owner on the specified date in the future, such as 30 years after death.Fee simple subject to a condition subsequent with time that is measured by an event: For example, this type of ownership will terminate automatically and revert back to its original owner on the day following the death of the life tenant.
Fee Simple Subject to Executory Limitation
Executory limitation means that the property is subject to an ongoing contract or unexpired lease that prevents the conveyance of the property. Usually, this is a restrictive covenant contained in a deed. It restricts the use of the property to current purposes, such as residential or commercial uses and other specific purposes.
Fee Simple Ownership vs. Leasehold Ownership
Some people want to own their homes, while others are just as happy to rent. Still others prefer to own a condo or townhouse. Fee simple ownership contrasts with leasehold ownership to cover these choices. Leasehold ownership can also apply to land. You might have the right to cultivate certain acres for a set number of years, but you wouldn’t enjoy the same freedoms that you would if you had purchased it outright and had fee simple ownership. This, too, works something like a rental agreement.
