A fee simple is the greatest possible property interest in land, granting its owner all traditional property rights. Because a fee simple interest stretches out in time forever, there can only be one fee simple at a time for any given chunk of land. Traditionally, transferring a fee simple required a deed with the words “to X and their heirs.” In the modern day, there is a presumption that a fee simple is transferred unless the text of a grant specifically indicates a lesser interest is transferred instead.
- In its pure form, a fee simple absolute, the owner retains both title and possession to the land regardless of any future events or circumstances.
In addition to a fee simple absolute, there exists three other categories of fee simple; a fee simple determinable, a fee simple subject to a condition subsequent, and a fee simple subject to an executory interest.
- A fee simple determinable is a fee simple interest that automatically reverts back to the grantor if a certain condition is met.
- A fee simple subject to a condition subsequent is a fee simple interest that, if a certain condition is met, allows the grantor the right to repossess that fee simple.
- A fee simple subject to an executory interest is a fee simple interest that, if a certain condition is met, transfers to a third party other than the grantor.
Although there can only be one fee simple at any point in time, a fee simple owner can split their fee simple into different parts. For example, a fee simple owner can grant a life estate, a property interest that allows the holder to possess and use the property for the length of their life. When the life estate holder passes away, possession of the property reverts back to the fee simple holder. Additionally, a fee simple owner can divide up their fee simple and grant pieces, each of which takes the form of a smaller fee simple, between as many people as they wish.
[Last updated in January of 2023 by the Wex Definitions Team]