Fee simple
Encyclopedia
In English law, a fee simple (or fee simple absolute) is an estate in land
, a form of freehold ownership. It is the most common way that 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 it could also be limited by certain encumbrance
s 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.
landholding. Feudal land tenure
s existed in several varieties, most of which involved the tenant having to supply some service to his overlord, such as knight-service
(military service) or where the overlord was the king, Grand Serjeanty
, which might require providing many different services, such as providing horses in time of war, or simply to act as the king's ceremonial butler. These fiefs thus gave rise to a complex relationship between landlord and tenant, involving duties on both sides. For example the overlord, in return for receiving his tenant's fealty
or homage, took upon himself the duty to protect his tenant. On the abolition of feudal land tenure, all fiefs became "simple", that is to say no conditionality was attached to the tenancy.
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, that is to say sell it, but instead could separate off 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 be mortgaged or put up as security.
Owners of real property
in fee simple title have the right to own the property during their lifetime and typically have a say in determining who gets to own the property after their death. In a sense, one might say fee simple owners "own" the property "forever"; however, only holders of an allodial title
on land really do own the land forever, and land thus held is not subject to property tax.
Historically, estates could be limited in time, such as a life estate
, which is a land ownership that terminates upon the grantee's (or another person'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). It also could be limited in the way that it was inherited, 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. When all those heirs ran out the property would revert to the original grantor's heirs. Most common law countries have abolished entailment by statute.
and descendable
.
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. Today, there is a very strong policy favoring the free and unfettered alienability of land.
, although this is uncommon. In the United States, life estates are most commonly used in the context of either giving a right to someone in a will to use property for the remainder of that person's (or another person's) life, or reserving to a grantor who is selling property the right to continue using the property for the remainder of his/her life. The right to ownership after the death of the subject person would be called the remainder estate. In England and Wales fee simple is the only freehold estate that remains and a life estate can only be created in equity.
). 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 (in this case if the land is used for anything other than a park), 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 most states in the US, many of these concepts have been modified by statute. 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 of today's US courts 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.
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, there is an 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.
Estate in land
An estate in land is an interest in real property that is or may become possessory.This should be distinguished from an "estate" as used in reference to an area of land, and "estate" as used to refer to property in general....
, a form of freehold ownership. It is the most common way that real estate
Real estate
In general use, esp. North American, 'real estate' is taken to mean "Property consisting of land and the buildings on it, along with its natural resources such as crops, minerals, or water; immovable property of this nature; an interest vested in this; an item of real property; buildings or...
is owned in common law
Common law
Common law is law developed by judges through decisions of courts and similar tribunals rather than through legislative statutes or executive branch action...
countries, and is ordinarily the most complete ownership interest that can be had in real property
Real property
In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
short of allodial title
Allodial title
Allodial title constitutes ownership of real property that is independent of any superior landlord, but it should not be confused with anarchy as the owner of allodial land is not independent of his sovereign...
, 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
Eminent domain
Eminent domain , compulsory purchase , resumption/compulsory acquisition , or expropriation is an action of the state to seize a citizen's private property, expropriate property, or seize a citizen's rights in property with due monetary compensation, but without the owner's consent...
, police power
Police power
In United States constitutional law, police power is the capacity of the states to regulate behavior and enforce order within their territory for the betterment of the general welfare, morals, health, and safety of their inhabitants...
, and escheat
Escheat
Escheat is a common law doctrine which transfers the property of a person who dies without heirs to the crown or state. It serves to ensure that property is not left in limbo without recognised ownership...
, and it could also be limited by certain encumbrance
Encumbrance
Encumbrance is legal technical terminology for anything that affects or limits the title of a property, such as mortgages, leases, easements, liens, or restrictions. Also, those considered as potentially making the title defeasible are encumbrances...
s or a condition in the deed
Deed
A deed is any legal instrument in writing which passes, or affirms or confirms something which passes, an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions sealed...
. How ownership is limited by these government powers often involves the shift from allodial title
Allodial title
Allodial title constitutes ownership of real property that is independent of any superior landlord, but it should not be confused with anarchy as the owner of allodial land is not independent of his sovereign...
to fee simple such as when uniting with other property owners acceding to property restrictions or municipal regulation.
History
The word "fee" is derived from fief, meaning a feudalFeudalism
Feudalism was a set of legal and military customs in medieval Europe that flourished between the 9th and 15th centuries, which, broadly defined, was a system for ordering society around relationships derived from the holding of land in exchange for service or labour.Although derived from the...
landholding. Feudal land tenure
Feudal land tenure
Under the English feudal system several different forms of land tenure existed, each effectively a contract with differing rights and duties attached thereto. Such tenures could be either free-hold, signifying that they were hereditable or perpetual, or non-free where the tenancy terminated on the...
s existed in several varieties, most of which involved the tenant having to supply some service to his overlord, such as knight-service
Knight-service
Knight-service was a form of Feudal land tenure under which a knight held a fief or estate of land termed a knight's fee from an overlord conditional on him as tenant performing military service for his overlord....
(military service) or where the overlord was the king, Grand Serjeanty
Serjeanty
Under the feudal system in late and high medieval England, tenure by serjeanty was a form of land-holding in return for some specified service, ranking between tenure by knight-service and tenure in socage...
, which might require providing many different services, such as providing horses in time of war, or simply to act as the king's ceremonial butler. These fiefs thus gave rise to a complex relationship between landlord and tenant, involving duties on both sides. For example the overlord, in return for receiving his tenant's fealty
Fealty
An oath of fealty, from the Latin fidelitas , is a pledge of allegiance of one person to another. Typically the oath is made upon a religious object such as a Bible or saint's relic, often contained within an altar, thus binding the oath-taker before God.In medieval Europe, fealty was sworn between...
or homage, took upon himself the duty to protect his tenant. On the abolition of feudal land tenure, all fiefs became "simple", that is to say no conditionality was attached to the tenancy.
Common Law
In English common law, the CrownThe Crown
The Crown is a corporation sole that in the Commonwealth realms and any provincial or state sub-divisions thereof represents the legal embodiment of governance, whether executive, legislative, or judicial...
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
Estate (law)
An estate is the net worth of a person at any point in time. It is the sum of a person's assets - legal rights, interests and entitlements to property of any kind - less all liabilities at that time. The issue is of special legal significance on a question of bankruptcy and death of the person...
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
Norman dynasty
Norman dynasty is the usual designation for the family that were the Dukes of Normandy and the English monarchs which immediately followed the Norman conquest and lasted until the Plantagenet dynasty came to power in 1154. It included Rollo and his descendants, and from William the Conqueror and...
period, when feudalism
Feudalism
Feudalism was a set of legal and military customs in medieval Europe that flourished between the 9th and 15th centuries, which, broadly defined, was a system for ordering society around relationships derived from the holding of land in exchange for service or labour.Although derived from the...
was introduced to England, the tenant or "holder" of a fief could not alienate it from the possession of his overlord, that is to say sell it, but instead could separate off 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
Subinfeudation
In English law, subinfeudation is the practice by which tenants, holding land under the king or other superior lord, carved out new and distinct tenures in their turn by sub-letting or alienating a part of their lands....
". The 1290 Statute
Statute
A statute is a formal written enactment of a legislative authority that governs a state, city, or county. Typically, statutes command or prohibit something, or declare policy. The word is often used to distinguish law made by legislative bodies from case law, decided by courts, and regulations...
of Quia Emptores
Quia Emptores
Quia Emptores of 1290 was a statute passed by Edward I of England that prevented tenants from alienating their lands to others by subinfeudation, instead requiring all tenants wishing to alienate their land to do so by substitution...
abolished subinfeudation and instead allowed the sale of fee simple estates.
The concept of a "fee" has its origins in feudalism
Feudalism
Feudalism was a set of legal and military customs in medieval Europe that flourished between the 9th and 15th centuries, which, broadly defined, was a system for ordering society around relationships derived from the holding of land in exchange for service or labour.Although derived from the...
. William Blackstone
William Blackstone
Sir William Blackstone KC SL was an English jurist, judge and Tory politician of the eighteenth century. He is most noted for writing the Commentaries on the Laws of England. Born into a middle class family in London, Blackstone was educated at Charterhouse School before matriculating at Pembroke...
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 be mortgaged or put up as security.
Owners of real property
Real property
In English Common Law, real property, real estate, realty, or immovable property is any subset of land that has been legally defined and the improvements to it made by human efforts: any buildings, machinery, wells, dams, ponds, mines, canals, roads, various property rights, and so forth...
in fee simple title have the right to own the property during their lifetime and typically have a say in determining who gets to own the property after their death. In a sense, one might say fee simple owners "own" the property "forever"; however, only holders of an allodial title
Allodial title
Allodial title constitutes ownership of real property that is independent of any superior landlord, but it should not be confused with anarchy as the owner of allodial land is not independent of his sovereign...
on land really do own the land forever, and land thus held is not subject to property tax.
Historically, estates could be limited in time, such as a life estate
Life estate
A life estate is a concept used in common law and statutory law to designate the ownership of land for the duration of a person's life. In legal terms it is an estate in real property that ends at death when there is a "reversion" to the original owner...
, which is a land ownership that terminates upon the grantee's (or another person'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). It also could be limited in the way that it was inherited, such as by an "entailment" which created a fee tail
Fee tail
At common law, fee tail or entail is an estate of inheritance in real property which cannot be sold, devised by will, or otherwise alienated by the owner, but which passes by operation of law to the owner's heirs upon his death...
. 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. When all those heirs ran out 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 is the "largest" estate known in law. It denotes the maximum of legal ownership, the greatest possible aggregate of rights, powers, privileges and immunities which a person may have in land, short of allodial title. It is an estate of potentially infinite duration in the holder and the holder's successors. The three hallmarks of the fee simple estate are that it is alienable, devisableWill (law)
A will or testament is a legal declaration by which a person, the testator, names one or more persons to manage his/her estate and provides for the transfer of his/her property at death...
and descendable
Inheritance
Inheritance is the practice of passing on property, titles, debts, rights and obligations upon the death of an individual. It has long played an important role in human societies...
.
Creation and characteristic of fee simple
Common law rules requiring words of general inheritance to create fee simple by conveyance have been abolished by statute in most states in the United States. It used to be the rule that in order to convey an estate in fee simple, the deed or will must state "to B and his heirs." Anything short of those magic 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. Today, there is a very strong policy favoring the free and unfettered alienability of land.
Life estate
Many common law jurisdictions retain the possibility of creating a life estateLife estate
A life estate is a concept used in common law and statutory law to designate the ownership of land for the duration of a person's life. In legal terms it is an estate in real property that ends at death when there is a "reversion" to the original owner...
, although this is uncommon. In the United States, life estates are most commonly used in the context of either giving a right to someone in a will to use property for the remainder of that person's (or another person's) life, or reserving to a grantor who is selling property the right to continue using the property for the remainder of his/her life. The right to ownership after the death of the subject person would be called the remainder estate. In England and Wales fee simple is the only freehold estate that remains and a life estate can only be created in equity.
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. A fee simple absolute is the largest estate permitted by law and it invests the holder of the fee with full possessory rights now and in the future. 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 deedDeed
A deed is any legal instrument in writing which passes, or affirms or confirms something which passes, an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions sealed...
). 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 (in this case if the land is used for anything other than a park), 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 most states in the US, many of these concepts have been modified by statute. 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 of today's US courts 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.
Rent
It is often said that no rentRenting
Renting is an agreement where a payment is made for the temporary use of a good, service or property owned by another. A gross lease is when the tenant pays a flat rental amount and the landlord pays for all property charges regularly incurred by the ownership from landowners...
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, there is an estate charge. In the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, fee simple owners are subject to property tax
Property tax
A property tax is an ad valorem levy on the value of property that the owner is required to pay. The tax is levied by the governing authority of the jurisdiction in which the property is located; it may be paid to a national government, a federated state or a municipality...
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
Condominium
A condominium, or condo, is the form of housing tenure and other real property where a specified part of a piece of real estate is individually owned while use of and access to common facilities in the piece such as hallways, heating system, elevators, exterior areas is executed under legal rights...
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.
See also
- Allodial titleAllodial titleAllodial title constitutes ownership of real property that is independent of any superior landlord, but it should not be confused with anarchy as the owner of allodial land is not independent of his sovereign...
- Leasehold
- Life estateLife estateA life estate is a concept used in common law and statutory law to designate the ownership of land for the duration of a person's life. In legal terms it is an estate in real property that ends at death when there is a "reversion" to the original owner...
- Quia EmptoresQuia EmptoresQuia Emptores of 1290 was a statute passed by Edward I of England that prevented tenants from alienating their lands to others by subinfeudation, instead requiring all tenants wishing to alienate their land to do so by substitution...
- Fee tailFee tailAt common law, fee tail or entail is an estate of inheritance in real property which cannot be sold, devised by will, or otherwise alienated by the owner, but which passes by operation of law to the owner's heirs upon his death...
- Ground rentGround rentGround rent, sometimes known as a rentcharge, is a regular payment required under a lease from the owner of leasehold property, payable to the freeholder. A ground rent is created when a freehold piece of land or a building is sold on a long lease...