Fee Simple Flashcards
(3 cards)
Fee Simple Subject to Condition Subsequent
A fee simple subject to a condition subsequent is a type of property ownership where the owner’s rights can be terminated if they fail to meet specific conditions outlined in the deed. If these conditions are violated, the original grantor has the right to reclaim the property through legal action, known as the right of re-entry.
Key Elements:
Fee Simple Ownership: The highest form of property ownership, giving the owner complete rights to use, sell, or pass down the property.
Condition Subsequent: Specific rules or requirements that the owner must follow after taking ownership.
Right of Re-entry: The original owner’s right to take back the property if the conditions are violated.
Example:
Imagine a property deed that states the land must be used for agricultural purposes. If the new owner decides to build a shopping mall instead, the original grantor can take legal action to reclaim the property.
Fee simple subject to condition subsequent is another type of defeasible fee in property law. Like a fee simple determinable, it grants ownership of land that can be lost if a specific condition stated in the deed occurs or fails to occur. However, the crucial difference lies in how the estate terminates. In a fee simple subject to condition subsequent, the estate does not automatically revert. Instead, the grantor (or their heirs) must take affirmative action to terminate the grantee’s ownership after the condition is violated.
Here’s a breakdown of its key aspects:
Conditional Language: This type of estate is created using conditional language in the conveyance (the deed). Common phrases that create this type of estate include:
“but if”
“provided that”
“on the condition that”
“upon condition that”
Right of Entry (or Power of Termination): When a grantor conveys a fee simple subject to condition subsequent, they retain a future interest known as a right of entry (also sometimes called a power of termination). This is the right to take back the property if the stated condition is violated. However, this right must be exercised by the grantor.
Non-Automatic Termination: If the specified condition is no longer met, the grantee’s ownership continues until the grantor takes steps to reclaim the property. This typically involves legal action, such as filing a lawsuit to recover possession.
Transferability: Similar to a fee simple determinable, the grantee in a fee simple subject to condition subsequent owns the property with the condition attached and can transfer their interest. However, any subsequent owner takes the property subject to the same condition and the grantor’s right of entry.
Example:
“To the Boys and Girls Club, but if the property ceases to be used for youth recreational activities, the grantor reserves the right to re-enter and repossess the property.”
In this example:
The Boys and Girls Club holds a fee simple subject to condition subsequent.
The condition is that the property must be used for youth recreational activities.
If the Boys and Girls Club stops using the property for this purpose (e.g., sells it to a commercial business), the ownership does not automatically revert to the original grantor or their heirs.
The grantor (or their heirs) must take affirmative steps, such as filing a lawsuit, to exercise their right of entry and reclaim the property.
The phrase “but if…the grantor reserves the right to re-enter and repossess” signals the creation of a fee simple subject to condition subsequent.
Fee Simple Absolute
Fee simple absolute is the highest and most complete form of ownership recognized in real estate law. It signifies absolute ownership of land, without any limitations or conditions, except for the fundamental governmental powers of taxation, eminent domain, police power, and escheat.
Largest Estate Permitted By Law
Here’s a breakdown of its key characteristics:
Absolute Ownership: The owner of a fee simple absolute estate has complete control over the property. This includes the rights to possess, use, enjoy, sell, lease, gift, or even destroy the property as they see fit.
Potentially Infinite Duration: The ownership has the potential to last forever. It is not limited by the life of the owner or any other specific time period.
Inheritable: The owner can pass the property on to their heirs or beneficiaries through a will or through intestate succession laws if there is no will.
Freely Transferable (Alienable): The owner can sell or otherwise transfer the property to anyone they choose, at any time. There are no restrictions on who can acquire the property.
No Conditions or Limitations (Generally): Unlike other types of fee simple estates (like fee simple determinable or fee simple subject to a condition subsequent), a fee simple absolute is not subject to any specific conditions that could cause the ownership to end or be lost. The only overarching limitations are those imposed by government powers.
Think of it this way: When someone says they “own” a piece of property outright, without any strings attached, they most likely hold a fee simple absolute interest. It’s the most robust form of private ownership available under the law.
Example:
If John buys a house and the deed conveys the property “to John and his heirs,” without any further conditions or limitations, John holds the property in fee simple absolute. He can live in it, sell it, rent it out, or leave it to his children in his will, and no one can take it away from him as long as he pays his taxes and complies with local laws (like zoning ordinances).
In Texas (your current location), fee simple absolute is the standard and most common form of real property ownership. Unless a deed specifically states otherwise, it is generally presumed that a conveyance of land transfers a fee simple absolute interest.
Fee simple Determinable
Fee simple determinable is a type of defeasible fee in property law, meaning it’s a fee simple estate that can be lost or terminated if a specific condition stated in the deed occurs or fails to occur. The key characteristic of a fee simple determinable is that the estate automatically reverts back to the grantor (or their heirs) when the condition is violated.
Here’s a breakdown of its key aspects:
Durational Language: Fee simple determinable estates are created using specific durational language in the conveyance (the deed). Common phrases that create this type of estate include:
“so long as”
“as long as”
“while”
“during”
“until”
Automatic Termination: If the specified condition is no longer met, the grantee’s ownership interest automatically ends, and the property reverts to the grantor or their heirs. No legal action is required by the grantor to retake possession.
Possibility of Reverter: The future interest held by the grantor (or their heirs) after conveying a fee simple determinable is called a possibility of reverter. This is the right to automatically regain ownership if the condition ceases to be met.
Transferability: The grantee in a fee simple determinable owns the property with the condition attached. They can transfer their interest, but the new owner takes the property subject to the same condition. If the condition is violated by any subsequent owner, the property automatically reverts to the original grantor or their heirs.
Example:
“To the First Presbyterian Church, so long as the property is used for religious purposes.”
In this example:
The First Presbyterian Church holds a fee simple determinable.
The condition is that the property must be used for religious purposes.
If the church stops using the property for religious purposes (e.g., sells it to a commercial business), the ownership of the property will automatically revert back to the original grantor or their heirs, without them needing to take any legal action. The durational phrase “so long as” signals the creation of a fee simple determinable.
Distinction from Fee Simple Absolute:
A fee simple absolute is the highest form of ownership with no conditions or limitations (other than governmental powers). The owner has the right to possess, use, and dispose of the property freely and the ownership lasts forever. A fee simple determinable, on the other hand, has a built-in limitation that can cause the ownership to end automatically.
In Texas (your current location):
Texas law recognizes fee simple determinable estates. The key to creating one lies in the clear and unambiguous use of durational language expressing the grantor’s intent that the estate will automatically terminate upon the occurrence or non-occurrence of a specific event. The possibility of reverter is also a recognized future interest in Texas.
