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At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Buying or selling a home is one of the biggest financial decisions an individual will ever make. Our real estate reporters and editors focus on educating consumers about this life-changing transaction and how to navigate the complex and ever-changing housing market. From finding an agent to closing and beyond, our goal is to help you feel confident that you're making the best, and smartest, real estate deal possible. Bankrate logo Editorial integrity
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. In real estate transactions you may hear the term “fee simple” used. Though it may sound anything but simple, it is actually not difficult to understand. Fee simple applies to ownership of land and is the dominant form of ownership in the United States. Most homes purchased in the U.S. are fee simple purchases. What is fee simple
Fee simple is a legal term used in real estate that means full and irrevocable ownership of land, and any buildings on that land. Fee simple is the highest form of ownership — it means the land is owned outright, without any limitations or restrictions other than local zoning ordinances. The term fee simple applies only to real estate, which includes land, immovable property and any property directly attached, such as a building, road, pond or machinery. When you , you usually purchase it fee simple. You own the property the home sits on and all rights to its use, and your deeds. In the instance of , the owners of individual units receive fee simple ownership that gives them full legal rights subject to an agreement known as a restrictive covenant. The owners share common rights for the use of public areas and also carry certain obligations toward its upkeep. What are the different types of fee simple ownership
Fee simple absolute
Fee simple and fee simple absolute are the same thing. When , it is also known as absolute. Fee simple defeasible
Fee simple defeasible is also a type of property ownership. In the case of fee simple defeasible, however, ownership is dependent on very specific conditions. What’s more, if the conditions of ownership are violated, the property may be returned to the grantor or to a specified third party. There are three different types of fee simple defeasible: subject to condition subsequent, determinable, and subject to executory limitation. Each type of fee simple defeasible includes different results or actions if the conditions of property ownership are violated. Here’s more about the three types: Fee simple subject to condition subsequent
This is the first of the three types of fee simple defeasible. In the case of fee simple subject to condition subsequent, property does not automatically transfer back to the grantor if the conditions of ownership aren’t met or are violated. Instead, if the conditions are violated or fail to be met, the grantor has the option to take back the property. This option is referred to as right of reentry. If the grantor does not take any action in response to ownership conditions being violated, then the property remains with the party that violated the terms. Fee simple determinable
Fee simple determinable takes that one step further. In fee simple subject to condition subsequent, when conditions are not met, the grantor must take action. But in fee simple determinable, if conditions are violated or somehow not met, ownership of the property is automatically transferred back to the grantor. There is no further action required on their part. Fee simple subject to executory limitation
This final type of fee simple defeasible is very similar to fee simple determinable. However, in the case of fee simple subject to executory limitation, if conditions are violated or somehow not met, ownership of the property is automatically transferred to a third party with no further action required. (Whereas in fee simple determinable, it is transferred back to the grantor.) SHARE: Mia Taylor is a contributor to Bankrate and an award-winning journalist who has two decades of experience and worked as a staff reporter or contributor for some of the nation's leading newspapers and websites including The Atlanta Journal-Constitution, the San Diego Union-Tribune, TheStreet, MSN and Credit.com. Michele Petry is a senior editor for Bankrate, leading the site’s real estate content. Related Articles