What Does "Fee Simple Ownership" Mean?

Fee-simple ownership offers absolute title to the land in question.

Fee-simple ownership, like most of U.S. real estate law, is a concept directly derived from English common law. When you own real estate with a fee-simple designation, you have the highest, strongest form of ownership that exists. Most U.S. residential real estate is granted as fee-simple ownership to protect owners and mortgage lenders. This ownership is designed to last forever for every future owner.


U.S. Laws

Among the most important real estate legal terms is the designation "fee simple." The word "fee" is derived from the English word, "fiefdom," which identifies the legal rights being sold or bought when land is involved. "Simple" is defined as unconstrained, complete, total. Therefore, fee-simple ownership grants the owner total and absolute legal title to land and any buildings or structures thereon. Buyers should always be sure they receive a fee-simple title when buying residential homes.


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Condominium Ownership

People often confuse condominium ownership with physical building structures. When they see attached townhouse-style homes or multiunit apartment-type residences, they often identify the structures as condominiums, without regard for ownership differences. The legal difference between fee-simple and condominium ownership is often transparent, but quite significant. Typically, condominium ownership specifies that you own the "space" your unit occupies on the specific land on which it sits. You'll also own a portion of all common land, usually based on the size of your unit or its market value when you buy.



While you enjoy absolute ownership of the entire land area with fee-simple ownership, your deed may still contain some restrictions or limitations often found in condominium-ownership projects. You might have deed restrictions created by former owners. Your home might be part of a subdivision that imposes some restrictions for all homeowners. There may even be common areas, like condominiums, which may be controlled by fee-simple deed restrictions. If there is a homeowners' association, it may impose controls or restrictions that affect your absolute ownership rights of use.


Life Estate

Fee-simple ownership lasts forever because one cannot destroy land nor is it consumed or destroyed by use. A life estate is ownership delimited by the person occupying the property, called the life tenant, or another legally designated person. Life tenants have the most or all the rights of a fee-simple owner, except for perpetuity. The life tenant's ownership ceases upon his death. At that time, ownership passes back to the former owner or to another person, who is said to own a "future ownership" in the property.


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