Defeasible Estates

Defeasible Estates

A defeasible fee contains language in the conveyance that potentially limits its duration. Defeasible estates are not necessarily permanent and can be defeated, or defeased, in some way. Defeasible estates are one of the primary methods of private land use control and can be created to restrain the personal conduct of the grantee. A defeasible fee contains language in the conveyance that potentially limits its duration. Therefore, the estate can be made defeasible and it will terminate, prior to its natural end point, upon the occurrence of some specified future event. The violation of a defeasible fee may result in forfeiture of ownership. There are three types of defeasible fee simples: Fee simple determinable Fee simple subject to condition subsequent Fee simple subject to executory limitation

Fee Simple Determinable

A fee simple determinable is a fee simple that is so limited that it will end automatically when a stated event happens. This is created by language denoting that the transferor is conveying a fee simple only until an event happens. The grantor must use clear durational language → "To A and his heirs until/so long as/while/during..." Note that the use of the word "only" in a granting clause regarding a condition generally establishes that the grantor intended to create a fee simple determinable, rather than a fee simple subject to condition subsequent. Every fee simple determinable is accompanied by a future interest. In the ordinary case, the future interest is retained by the transferor, or his heirs, and is called a possibility of reverter. This may be expressly retained or may arise by the operation of law. The duration is as long as the condition is met. If the condition is no longer met, the grantor automatically has legal possession, which is called the possibility of reverter. The land is thus reverted and returned back to the grantor. Note that if the event occurs and the grantee continues to maintain the property, the grantee would be doing so in adverse possession and the rules of adverse possession would apply. The statute of limitations would begin running whether the grantor or the grantor's heirs were aware of the change in use or not.

Fee Simple Subject to Condition Subsequent

A fee simple subject to condition subsequent is a fee simple that does not automatically terminate but may be cut short or divested at the transferor's election when a stated condition happens. This is created by a conveyance of a fee simple, followed by language providing that the fee simple may be divested by the transferor if a specified event happens. The grantor must use clear conditional language and carve out the right to reenter → "To A and his heirs, but if/upon condition that/provided that..." Note that if the use restriction follows the granting clause, as a separate modifying term or phrase, then it is generally interpreted as a fee simple subject to a condition subsequent. The common law has a preference for the fee simple subject to condition subsequent in cases of vague and ambiguous language. If the condition is no longer met, the granter has the right of reentry, but the estate does not automatically expire until the grantor takes affirmative action. The grantor can choose whether or not to reenter the property. The right of entry may be expressly retained or it may be implied if the words of the instrument are reasonably susceptive to the interpretation that this type of forfeiture estate was contemplated by the parties.

Fee Simple Subject to Executory Limitations

Fee simple subject to executory limitation is the estate created when a grantor transfers a fee simple subject to condition subsequent and in the same instrument creates a future interest in a third party, rather than in himself. The future interest of the third party is called an executory interest. "To A and his heirs for so long as... and if not..., to B." If the condition is not met, the estate is terminated automatically in favor of the third party. The executory interest executes a limitation and "reaches back," cutting off an already vested interest.