In English law, a fee simple is an estate in land, a form of freehold ownership.
It is the way that real estate is owned in common law countries, and is the highest ownership
interest possible that can be had in real property.
Allodial title is reserved to governments under a civil law structure.
Fee simple ownership represents an ownership interest in real property, though it is limited
by government powers of taxation, eminent domain, police power, and escheat, and it
could also be limited further by certain encumbrances or conditions in the deed, such as, for example,
a condition that required the land to be used as a public park, with a reversion interest
in the grantor if the condition fail; this is a fee simple conditional.
History The word "fee" is derived from fief, meaning
a feudal landholding.
Feudal land tenures existed in several varieties, most of which involved the tenant having to
supply some service to his overlord, such as knight-service.
If the tenant's overlord was the king, Grand Serjeanty, then this might require providing
many different services, such as providing horses in time of war or acting as the king's
ceremonial butler.
These fiefs gave rise to a complex relationship between landlord and tenant, involving duties
on both sides.
For example, in return for receiving his tenant's fealty or homage, the overlord had a duty
to protect his tenant.
When feudal land tenure was abolished all fiefs became "simple", without conditions
attached to the tenancy.
Common law In English common law, the Crown has radical
title or the allodium of all land in England, meaning that it is the ultimate "owner" of
all land.
However, the Crown can grant ownership in an abstract entity—called an estate in land—which
is what is owned rather than the land it represents.
The fee simple estate is also called "estate in fee simple" or "fee-simple title", and
sometimes simply "freehold" in England and Wales.
From the start of the Norman period, when feudalism was introduced to England, the tenant
or "holder" of a fief could not alienate it from the possession of his overlord.
However, a tenant could separate a parcel of the land and grant it as a subordinate
fief to his own sub-tenant, a process known as sub-enfeoffing or "subinfeudation".
The 1290 Statute of Quia Emptores abolished subinfeudation and instead allowed the sale
of fee simple estates.
The concept of a "fee" has its origins in feudalism.
William Blackstone defined fee simple as the estate in land that a person has when the
lands are given to him and his heirs absolutely, without any end or limit put to his estate.
Land held in fee simple can be conveyed to whomsoever its owner pleases; it can also
be mortgaged or put up as security.
Owners of real property in fee simple have the privilege of interest in the property
during their lifetime and typically have a say in determining who gets to own an interest
in the property after their death.
Historically, estates could be limited in time.
Common temporal limitations include life estate, a land ownership that terminates upon the
grantee's death even if the land had been granted to a third party, or a term of years,
a lease for a specified term, such as in an estate for years.
A fee also could be limited through the method of its inheritance, such as by an "entailment",
which created a fee tail.
Traditionally, fee tail was created by words of grant such as "to N. and the male heirs
of his body", which would restrict those who could inherit the property.
If no heirs could be found, then the property would revert to the original grantor's heirs.
Most common law countries have abolished entailment by statute.
Duration An estate in fee simple denotes the maximum
ownership in land that can be legally granted; it is the greatest possible aggregate of rights,
powers, privileges and immunities available in land.
The three hallmarks of the fee simple estate are that it is alienable, devisable and descendible.
Creation and characteristic of fee simple Rules requiring words of general inheritance
to create fee simple by conveyance have been abolished by statute in the United States.
To convey an estate in fee simple at common law, the deed or will must state "to B and
his heirs."
Anything short of those words transferred a smaller estate.
Modern deeds usually follow a standardized form.
There is a presumption that the testator intends to convey his or her property in fee simple
unless the will indicates an intention to transfer a smaller estate, such as a life
estate.
Life estate Many jurisdictions retain the possibility
of creating a life estate, although this is uncommon.
In the United States, life estates are most commonly used either to grant someone use
of the property for the remainder of that person's life in a will, or by a grantor to
reserve the right to continue using the property for the remainder of the grantor's life after
it is sold.
The right to ownership of the property after the death of the life estate owner is called
the remainder estate.
In England and Wales fee simple is the only freehold estate that remains; a life estate
can only be created in equity and is not a right in property.
Types of fee simple If previous grantors of a fee simple estate
do not create any conditions for subsequent grantees, then the title is called fee simple
absolute.
A fee simple absolute is the highest estate permitted by law and it gives the holder with
full possessory rights and obligations now and in the future.
Other fee simple estates in real property include fee simple defeasible estates.
A defeasible estate is created when a grantor places a condition on a fee simple estate.
When a specified event happens, the estate may become void or subject to annulment.
There are two types of defeasible estates: 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 if the condition occurs, but the estate does not automatically
revert to the grantor; this is a fee simple subject to a condition subsequent.
In most jurisdictions in the United States these concepts have been modified by statute.
Fee simple determinable was generally preferred by courts in the common law of the early United
States.
Recently, that trend has reversed, and most courts in the United States will find a fee
simple subject to condition subsequent in situations where the conveying document's
language is unclear.
Rent The claim that no rent or similar obligations
are due from the owner of property in fee simple 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.
England and Wales impose an estate charge.
In the United States, fee simple owners are subject to property tax and the revenue generated
is directed to the municipality's general fund.
Other local tax assessments called "special purpose taxes" may be assessed in addition
to the property taxes for specific purposes such as infrastructure 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.
Etymology Fee – A right in law to the use of land;
i.e. a fief.
Simple – in the unconstrained sense: without limit to the inheritance of heirs;
unrestricted as to transfer of ownership.
The English word fee ultimately goes back to the Indo-European root peku, which refers
to moveable wealth, that is, cattle.
The Latin word pecunia, money, also comes from this root and becomes pecuniary in English.
The root appears in Modern German as Vieh, cattle, beast.
See also Allodial title
Leasehold Life estate
Quia Emptores Fee tail
Ground rent Notes