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Fee simple
Fee simple, also known as fee simple absolute,
is an estate in land in common law. It is the most common way real
estate is owned in common law countries, and is ordinarily the most
complete ownership interest that can be had in real property short
of allodial title, which is often reserved for governments. Fee
simple ownership represents absolute ownership of real property
but it is limited by the four basic government powers of taxation,
eminent domain, police power, and escheat. How ownership is limited
by these government powers often involves the shift from allodial
title to fee simple such as when uniting with other property owners
acceding to property restrictions or municipal regulation.
In English common law theory, the Crown has
radical title or the allodium of all land in England, meaning that
it is the ultimate "owner" of all land. However the Crown
can grant an abstract entity—called an estate in land—which
is what is owned. The fee simple estate is also called "estate
in fee simple" or "fee-simple title" and sometimes
simply freehold in England and Wales. In the early Norman period,
the holder of an estate in fee simple could not sell it, but instead
could grant subordinate fee simple estates to third parties in the
same parcel of land, a process known as "subinfeudation."
The Statute of Quia Emptores adopted in 1290 abolished subinfeudation
and instead allowed the sale of fee simple estates. [1]
Historically, estates could be limited in time,
such as a life estate, which is an interest in lands that terminates
upon the grantee's (or another person's) death, even if the land
had been granted to a third party, or a term of years (a lease for
a specified term, such as in an estate for years). It also could
be limited in the way that it was inherited, such as by what was
called an "entailment" which created a fee tail. Traditionally,
fee tail was created by words of grant such as "to N. and the
male heirs of his body"; which would restrict those who could
inherit the property. When all those heirs ran out the property
would revert to the original grantor's heirs.
Most common law countries have abolished entailment
by statute; but many retain the possibility of creating a life estate,
although this is uncommon. In the U.S., life estates are most commonly
used in the context of either giving a right to someone in a will
to use property for the remainder of that person's (or another person's)
life, or reserving to a grantor who is selling property the right
to continue using the property for the remainder of his/her life.
In England and Wales fee simple is the only freehold estate that
remains and a life estate can only be created in equity.
Other estates in land include the defeasible
estates. A defeasible estate is created when a grantor places a
condition on a fee simple estate. Upon the happening of a specified
event, the estate may become void or subject to annulment. Two types
of defeasible estates are the fee simple determinable and the fee
simple subject to condition subsequent. If the grantor uses durational
language in the condition such as "to A as long as the land
is used for a park" then upon the happening of the specified
event, the estate will automatically terminate and revert to the
grantor or the grantor's estate. If the grantor uses language such
as "but if alcohol is served" then the grantor or the
heirs have a right of entry, but the estate does not automatically
revert to the grantor. In the United States many of these concepts
have been modified by statute in some states.
The concept of a "fee" has its origins
in feudalism. According to William Blackstone, the great common
law commentator, fee simple is the estate in land which a person
has when the lands are given to him and his heirs absolutely, without
any end or limit put to his estate. Land held in fee simple can
be conveyed to whomever its owner pleases; it can be mortgaged or
put up as security as well.
It is often said that no rent or similar obligations
are due from the owner of property in fee simple. That is only partially
true, for example a rentcharge may exist requiring a freeholder
to pay a fixed sum of money closely resembling rent, and many jurisdictions
have created financial obligations that may be imposed on a freehold
estate, for example in England and Wales, the estate charge. In
the United States, fee simple owners are subject to property tax
and other assessments for items such as roads and water/sewer improvements
on the land.
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