Fee Simple Defeasible

What Is Fee Simple Defeasible

Depending on what part of the country you are from, Fee Simple Defeasible is also called a qualified fee estate, conditional fee estate or a determinable fee estate. Don’t get too entrenched in the name though, as the chances of seeing this on your real estate exam is really low. Just remember that A Fee Simple Defeasible Estate is that the ownership interest is conditional. Let’s check out some examples so you can better understand.

Example of a Fee Simple Defeasible

Below is a real world example of a Fee Simple Defeasible Estate.

  • Imagine you own a condo in Miami. You want to give this condo to your son, Jake, however jake has had a history of always finding trouble. In order to keep some pressure on him, you give him certain conditions he has to meet.  In order for Jake to own the condo in full, he must not be arrested for 10 years. For the first few years, Jake is behaving and doing everything he should be doing. One night, Jake decides it’s time to let loose and throw a party. The cops get a noise complaint and find drugs at the house, promptly arresting Jake. Jake violated the terms of the Fee Simple Defeasible and now the property is returning to you.

 

  • Imagine you are over all the money and financial decisions for your local church. Your church has 10 acres of land, however you only need 5 acres for the building, parking lot and other church activities. Your church needs some money, so you decide it’s the right time to sell the extra 5 acres of land. Now, you don’t want someone putting a bar or some kind of lewd establishment next to a church! Your congregation would go ballistic on you if you did that.  So what options do you have? You sell the land as a Fee Simple Defeasible Estate placing many restrictions on what can be built (no casinos, bars, clubs, etc). The new owner can build whatever he wants as long as it isn’t one of these. If he/she builds a restricted property, the church is able to take the property back.

What Do I Need To Know About Fee Simple Defeasible On My Real Estate Exam?

There will not be many real estate exam questions about  a Fee Simple Defeasible Estate on your real estate exam. The last time we conducted a survey of our prior students, most only reported 2 questions at the most with many people reporting no questions at all. If you remember the real world examples provided here you will get any question about Fee Simple Defeasible correct they throw at you. Just keep in mind, that the fee simple defeasible estate that requires that a specific condition be met to keep the estate.

This type of ownership lasts as long as that condition is satisfied.

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