Fee Simple Defeasible Laws

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What Is a Fee Simple Defeasible?

A fee simple defeasible is a conveyance of property that has conditions placed on it. The holder of a fee simple defeasible possesses the property as a fee simple subject to that condition. If the condition is violated or not met, then the property will either go back to the original grantor or a specified third party. 

Are There Different Types of Fee Simple Defeasible?

There are three types of fee simple defeasible. The first two confer future property interests in the person granting the property. The other type has the future interest going to a specified third party. 

1) Fee Simple Determinable

A fee simple determinable automatically ends the interest in the property when a condition is violated or not met. The person granting the property interest retains a "possibility of reverter," meaning that if the condition is violated, the property will automatically shift back to the grantor without having to take any further action. 

In order to create a fee simple determinable, the words of conveyance must be durational (e.g., as long as, so long as, during, while, or until). An example of a fee simple determinable would be: A to B so long as the property is used as a school. B would have a fee simple interest in the property so long as the property is used as a school. If, however, the property is no longer used as a school, then the property will automatically go back to A. 

2) Fee Simple Subject To Condition Subsequent

A fee simple subject to a condition subsequent is very similar to the fee simple determinable except that the violation of the condition would give the original owner the option to take back the property. Thus, the property does not automatically shift to the original owner. Instead, upon violation of the condition, the original owner has the option to reassert a right to the property. This option is called a "right of reentry." 

In order to convey a fee simple subject to condition subsequent, the words of conveyance must state that the original owner can retake the property if the condition is violated. An example of a fee simple subject to condition subsequent would be: A to B, but if the property is used for commercial purposes, then A has a right of reentry. Again, B has a fee simple interest in the property so long as the property is not used for commercial purposes. If, however, the property is used for commercial purposes, then A can retake the property.

3) Fee Simple Subject To Executory Limitation

A fee simple subject to executory limitation is basically the same as a fee simple defeasible, except that it confers a future property interest in a third party, and not the orginal owner. 

In order to create a fee simple subject to executory limitation, the original owner would use either durational or conditional words that establish a condition and a third party to whom the property would go to if the condition is not met or is violated. Like a fee simple determinable, the property shifts automatically and does not require the third party to take any action. The third party interest is called a "remainder." 

An example of a fee simple subject to executory limitation would be: A to B only if the property is used as a place of residence; if not used as a place of residence, then to C. Thus, B has a fee simple interest in the property. If, however, the property is used as something other than a place of residence, then the property will automatically shift to C. It is important to note that A, the grantor, no longer has an interest in the property.

Do I Need A Lawyer?

With the drafting of any legal document you should seek out an estate lawyer or a property lawyer. Due to the complexity of fee simple defeasible estates specifically, seeking out an attorney will greatly assist in forming a conveyance that suits your needs.

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Last Modified: 10-03-2014 02:42 PM PDT

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