Fee Simple
Fee simple (also called fee simple absolute) is the most complete form of property ownership, granting the owner full bundle of rights including the right to use, sell, lease, or bequeath the property without restrictions, with ownership lasting indefinitely and passing to heirs.
Exam Tip
Fee simple = MOST COMPLETE ownership. Full bundle of rights: possession, control, enjoyment, exclusion, disposition. Fee simple absolute has NO conditions; fee simple defeasible HAS conditions.
What is Fee Simple?
Fee simple absolute is the highest form of property ownership recognized in law. The owner has complete control over the property, subject only to government powers (taxation, eminent domain, police power, escheat) and any voluntary encumbrances.
Bundle of Rights in Fee Simple
| Right | Description |
|---|---|
| Possession | Right to occupy and use the property |
| Control | Right to determine how property is used |
| Enjoyment | Right to use without interference |
| Exclusion | Right to keep others off the property |
| Disposition | Right to sell, lease, gift, or bequeath |
Fee Simple vs. Other Ownership Types
| Ownership Type | Duration | Restrictions | Inheritable |
|---|---|---|---|
| Fee Simple Absolute | Indefinite | None (except government powers) | Yes |
| Fee Simple Defeasible | Until condition violated | Subject to conditions | Yes |
| Life Estate | Owner's lifetime | Cannot outlive owner | No |
| Leasehold | Lease term | Many tenant restrictions | No |
Types of Fee Simple
| Type | Description | Example |
|---|---|---|
| Fee Simple Absolute | Complete ownership, no conditions | Standard home purchase |
| Fee Simple Determinable | Automatically ends if condition occurs | "To school as long as used for education" |
| Fee Simple Subject to Condition Subsequent | May be terminated by grantor if condition violated | "To charity, but if alcohol sold, grantor may reclaim" |
Key Characteristics
- Perpetual duration - Lasts forever
- Fully transferable - Can sell, gift, or devise
- No reversion - Does not return to grantor
- Maximum rights - All ownership rights included
Limitations on Fee Simple
Even fee simple owners are subject to:
| Limitation | Description |
|---|---|
| Property Taxes | Government can tax property |
| Eminent Domain | Government can take for public use |
| Police Power | Zoning, building codes |
| Escheat | Property goes to state if owner dies without heirs |
| Easements | Rights granted to others |
| Deed Restrictions | Private restrictions that run with land |
Exam Alert
Fee simple absolute = HIGHEST/MOST COMPLETE form of ownership. Owner has FULL bundle of rights. Know the difference between fee simple absolute (no conditions) and fee simple defeasible (has conditions). Memory tip: "Fee" comes from "fief" (feudal land grant) and "Simple" means unconditional.
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Related Terms
Leasehold
Real EstateA leasehold is an interest in real property held by a tenant under a lease agreement, granting the right to possess and use the property for a specified period while ownership remains with the landlord (lessor), making it a nonfreehold estate that is less than full ownership.
Life Estate
Real EstateA life estate is a freehold ownership interest in real property that lasts only for the lifetime of a designated person (the life tenant), after which the property passes to another party.
Deed
Real EstateA deed is a legal document that transfers ownership (title) of real property from one party to another.
Title
Real EstateTitle is the legal right to own, use, and dispose of real property, representing the bundle of rights that come with property ownership.
Encumbrance
Real EstateAn encumbrance is any claim, lien, charge, or liability attached to real property that may diminish its value or burden its title, but does not necessarily prevent transfer of ownership.