If you want to own real estate, many different terms may not be familiar. One of those terms is the term that means your ownership is all-inclusive.
The most inclusive type of ownership is fee simple absolute. The fee simple absolute means that you own the property without any restrictions being placed upon the property or the ownership. It is the most common form of property and land ownership in the United States.
Table of Contents
- Fee Simple – All-Inclusive Ownership Of Property
- Different Types Of Fee Simple Explained
- Frequently Asked Questions
- Related Questions
Fee Simple – All-Inclusive Ownership Of Property
The Fee Simple is a legal term used in real estate for full and irrevocable land ownership or any buildings on that land. Fee simple is considered the highest form of ownership. It means the land is sold outright without any limitations and restrictions placed upon the land other than local zoning ordinances.
The term fee simple only applies to real estate. Fee simple includes real estate such as land, buildings, or any other immovable property.
When you purchase a property, you will usually purchase it for a simple fee. You own the property and the buildings on the property, including the home, and you have all rights to use that property as your name is on the title deeds.
Under the fee simple, other restrictions can be placed upon the property, such as easements, HOA rules, regulations, or even city and zoning regulations. But with a simple fee, most property owners can do what they choose on their property as long as they keep in mind the local laws and regulations and do not do anything illegal.
There are different types of Fee Simple for properties. Each one is a little bit different and has different rights.
Different Types Of Fee Simple Explained
There are different types of fee simple. There is fee simple absolute and fee simple defeasible. Even though they have some similarities, there are some differences between them.
Fee Simple Absolute
Fee Simple Absolute is the most absolute form of property ownership as there are no restrictions placed on the ownership. It is the most common form of property ownership in the United States.
Fee Simple Absolute is what people usually mean when discussing Fee Simple ownership.
Here are a few things to remember about Fee Simple Absolute:
- Ownership Forever – Under Fee Simple, owners can own their land forever if they make the mortgage and pay their property taxes.
- Can Pass Down Property – With Fee Simple, the owner can pass down the property to their heirs. They can stipulate that a home can not be torn down or the home must always remain in the family.
When most people talk about all Inclusive ownership of real estate, they are talking about the fee simple absolute.
Fee Simple Defeasible
Fee simple defeasible is sometimes called fee simple determinable; this is the slightly less absolute form of real estate ownership. It is not as inclusive as fee simple absolute.
In this form of ownership, owners can keep their property and land forever, but to retain possession, they must meet certain conditions that were put in place by a former property owner. Owners who violate these conditions usually automatically lose their property and land.
An example would be a previous owner who could have stipulated that the property must always be a residential home. If you turn that home into a hotel, violating the agreement, ownership of the property’s land will revert to the previous owner.
Fee Simple Subject To Condition Subsequent
The fee simple subject to condition subsequent is similar to fee simple defeasible in that owners must again meet certain conditions to retain ownership of the property or land.
The fee simple subject to conditions subsequent also places certain conditions upon the property or land ownership. If the owners violate these conditions, they could lose their land. But in this case, the owners do not automatically take repossession, and the former owners can also ignore the violations and let the new owners retain ownership.
In fee simple subject to condition subsequent, if you buy a property that says that the property must always remain as a residential property. Still, if you decide to turn the property into a hotel, the former owner can either take possession or ignore your violation.
The fee simple absolutes are the most inclusive land and real estate ownership form. It is the ownership type that most people prefer when they own any real estate property or investment.
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Frequently Asked Questions
What is fee simple absolute ownership?
Fee simple absolute ownership is the highest and most inclusive form of property ownership. It means that you have complete and unrestricted ownership rights over the property without any limitations or conditions.
What are the benefits of fee simple absolute ownership?
Fee simple absolute ownership provides you with maximum control over your property. You can use, sell, lease, or transfer the property as you see fit without any external restrictions.
Are there any limitations on fee simple absolute ownership?
Generally, fee simple absolute ownership does not have any inherent restrictions. However, local zoning regulations, easements, or other legal restrictions imposed by the government or previous owners may apply.
Can fee simple absolute ownership be transferred to others?
Yes, fee simple absolute ownership can be freely transferred to others through sale, gift, or inheritance. You have the right to decide who will receive your property.
Can fee simple absolute ownership be subject to mortgages or liens?
Yes, fee simple absolute ownership can be used as collateral for loans, mortgages, or other financial obligations. However, if the owner defaults on these obligations, the lender may have the right to foreclose on the property.
Can the government take away fee simple absolute ownership?
In certain circumstances, the government can exercise eminent domain and acquire fee simple absolute properties for public use. However, the government must provide just compensation to the owner.
How is fee simple absolute different from other forms of property ownership?
Fee simple absolute ownership is different from other forms of ownership, such as life estate or leasehold, because it offers the most comprehensive rights and control over the property.
Are there any ongoing costs associated with fee simple absolute ownership?
Yes, as the owner, you are responsible for property taxes, insurance, maintenance, and other costs associated with owning and maintaining the property.
Related Questions
Can You Take The Real Estate Exam Without Taking Any Classes?
Becoming a Real Estate agent in the United States requires you to take a real estate exam for the state or area where you want to sell real estate. Each state will have some slightly different real estate laws.
By clicking here, you can read more about Can You Take The Real Estate Exam Without Taking Any Classes?
Why Is Real Estate Called ‘Real Estate’?
The word Real Estate comes from the Latin word realis, but it refers ideally to the physical and economic characteristics of real estate or real property. The word Real Estate can date back to the 17th Century. Real Estate is a legal term used in many English-speaking jurisdictions worldwide.
By clicking here, you can read more about Why Is Real Estate Called ‘Real Estate’?.
