Defeasible Fee Deconstruction: Everything You Need to Know
A defeasible fee deconstruction is a simple legal term as well as a kind of property ownership where specific conditions determine ownership.3 min read
2. The Powerful Ownership of Fee Simple Defeasibles
A defeasible fee deconstruction is a simple legal term as well as a kind of property ownership where specific conditions determine ownership. It sounds complicated, but a defeasible fee basically means that the property could be returned to whoever granted it or to a third party if the ownership criteria are ever violated. There are two types of the most common type of possessory estates which are known as fee simple estates: absolute and defeasible.
On an absolute fee simple estate, the land is free for the owner to do what they wish with without restrictions or conditions, subject only to non-property issues like taxes, eminent domain, etc. For defeasible fee simple estates, there are conditions and requirements on ownership that could result in a change of ownership if they are violated. While it sounds complicated, the meaning behind fee simple estates is easily defined.
The Three Kinds of Defeasible Fee Simple Estates
There are three kinds of defeasible fee simple estate that are important to know:
Fee Simple Determinable is an estate that immediately terminates interest in the property when certain violations are noted or when a specific set of conditions are met.
- Crafted simply with words of conveyance utilizing durational language (so long as, until, while, etc.) fee simple determinables are followed by subsequent estates with any possibility of reverter.
Fee Simple Subject to Condition Subsequent Estate is very much like the fee simple determinable with the notable exception that violating a condition would allow the original owner to have an option to reclaim the property. The property does not immediately revert to the original owner, but it could.
- For example, the right of reentry allows the owner, upon violation of a condition, to reassert a right for the property. The language for a fee simple to condition subsequent needs to state that the owner can retake the property if the condition is met or the violation is noted.
Fee Simple Subject to an Executory Limitation is an estate where if the terms are not met or if certain conditions are violated, the interest in a property is terminated. If the conditions are not met, the property is transferred to a third party, not to the granter.
- The third party interest, known as the remainder, doesn't have to do anything, the property shift is automatic. This isn't common for normal residential or commercial transactions, but when large estates held by multiple generations of a family are involved, defeasible fees often come into play and place some restrictions on ownership rights.
A reputable real estate attorney in your state is useful for seeking help. They'll be able to answer any questions you have on fee simple defeasibles with practice and ease.
The Powerful Ownership of Fee Simple Defeasibles
Property ownership carries a plethora of rights, but there can be limitations imposed that limit the burden and scope of ownership. The second most powerful way of owning property is through the use of a fee defeasible title. The only restrictions on your ownership are the foundational functions of basic government: taxation, eminent domain, police power, or restrictions on a deed.
Previous owners can restrict or limit the use of property from specific uses once there is a covenant on the deed. Say, for example, the previous owner decided to restrict the sale of alcohol on the land. If the current owner is aware or not of the prohibition against alcohol, a violation would allow either the previous owner or any of his descendants from immediately seizing the land.
Another real-life example relating to the violation of a condition on a deed was the 1970 Supreme Court case of Evans v. Abney, which was a covenant on the deed to a park stating it can only be used by Whites, which was just one of a number of Supreme Court decisions that have tackled the issue of racially discriminatory conditions and racial limits on land use. This covenant remained in place until it conflicted with the Civil Rights Act, at which point the intention of the condition could not be fulfilled, which meant that the land reverted to the granter's heirs.
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