🏠 What Is Fee Simple Absolute / Defeasible Fee in Real Estate?

Fee simple absolute is the highest, most complete form of property ownership recognized in real estate. A defeasible fee, on the other hand, is a form of ownership that can be lost if a specific condition or restriction is violated. Both fall under the category of freehold estates, but only fee simple absolute provides unconditional, perpetual ownership.

How Fee Simple Absolute and Defeasible Fees Work

Fee Simple Absolute gives a property owner:

  • Unlimited duration
  • Full rights to sell, lease, transfer, or mortgage the property
  • No conditions or restrictions imposed by the grantor
  • The highest degree of ownership possible under U.S. law

Defeasible Fees impose conditions that can cause ownership to revert or transfer if violated. There are three major types:

  • Fee Simple Determinable — ends automatically if a condition is broken.
  • Fee Simple Subject to Condition Subsequent — ownership may be reclaimed by the grantor through legal action.
  • Fee Simple Subject to Executory Limitation — ownership transfers to a third party if the condition is violated.

In all defeasible fee types, the grantor places conditions in the deed that define when ownership ends or transfers.

Why Fee Simple Ownership Matters in Real Estate

Key reasons these estate types are important:

  • Fee simple absolute provides maximum security and flexibility.
  • Defeasible fees can dramatically affect resale value and financing.
  • Conditions in defeasible fees may prohibit certain uses (e.g., alcohol sales, commercial use).
  • Title companies and lenders scrutinize defeasible fee restrictions closely.

Why real estate professionals must understand this:

  • Some properties—especially older deeds—contain conditional language that buyers overlook.
  • Violating a defeasible condition can lead to legal disputes or loss of title.
  • Understanding these distinctions ensures correct contract and title interpretation.

Examples of Fee Simple Estates

Example 1: Fee Simple Absolute

A homeowner purchases a property without restrictions. They can sell it, lease it, build on it, or pass it to heirs indefinitely. This is the standard form of residential ownership in the U.S.

Example 2: Fee Simple Determinable

A grantor deeds land to a school district “so long as the property is used for educational purposes.” If the property is no longer used as a school, ownership automatically reverts to the grantor.

Example 3: Fee Simple Subject to Condition Subsequent

A property is transferred on the condition that “no alcohol may be sold.” If alcohol is sold, the grantor must take legal action to reclaim the property.

Example 4: Fee Simple Subject to Executory Limitation

A deed states: “to John, but if the property is ever used commercially, then to Sarah.” If John violates the condition, title transfers to Sarah.

Why Fee Simple Estates Matter for FSBO Sellers

Most FSBO sellers deal with fee simple absolute ownership, but defeasible fees appear in older or rural properties. Understanding these helps sellers:

  • Interpret title commitments and deed restrictions before listing.
  • Identify conditions that could affect buyer financing or resale value.
  • Avoid contract disputes by disclosing restrictions early.

Homeowners using Flat Fee MLS through Brokerless can list confidently knowing how estate types may affect valuation or marketability.

🔗 Related Resources for Buyers & Sellers

Frequently Asked Questions

Is fee simple absolute the same as full ownership?
Yes — it is the most complete form of ownership available.

Can a defeasible fee be sold?
Yes, but the buyer inherits the same conditions and risks.

Do lenders allow mortgages on defeasible fees?
Often yes, but restrictive conditions may limit financing or require legal review.

Can a defeasible fee condition be removed?
Sometimes — through legal action, negotiation with the grantor, or expiration of the condition under state law.

What happens if someone violates a defeasible fee condition?
Depending on the type, ownership may automatically revert, require legal action, or transfer to a third party.

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