What is a Defeasible Estate? Fee Simple Defeasible Example

What is a Defeasible estate?

A defeasible estate is an estate in land that may be defeated or terminated by a subsequent event, such as the death of the holder of the estate or a change in the holder’s title to the land.

For example, a life estate is a defeasible estate that ends upon the death of the holder. A leasehold estate is a defeasible estate that may be defeated by a termination of the lease.

When a grantor transmits land on a conditional basis, he creates a defeasible estate. If the grantor’s specified event or condition occurs, the transfer may be void or susceptible to annulment. (An estate that is not subject to such limitations is known as an indefensible estate.)

Historically, the use of defeasible estates has been frowned upon by the common law because it interferes with the owners’ enjoyment of their property and, as a result, has made it difficult to generate a genuine future interest.

Unless a defeasible estate is plainly intended, modern courts will interpret the language against this sort of estate.

The fee simple determinable estate, the fee simple subject to an executory limitation or interest, and the fee simple subject to a subsequent condition are the three forms of defeasible estates.

Because a defeasible estate always grants less than a full fee simple, a defeasible estate will always produce one or more future interests.

Defeasible Fees: Legality

If a real estate transfer is qualified by a “condition subsequent,” such as the new owner being unable to do something, the former owner retains the right to take legal action to retake the property if the new owner does the prohibited thing.

On a ranch transfer, an example might be a prohibition on hunting on the property. If the new owner allows hunting on the property in the future, the previous owner may file a lawsuit to reclaim it.

A “special limitation” may also apply to a defeasible fee estate. In this case, if a certain limitation is violated, the new owner’s rights are automatically terminated and ownership reverts to the previous owner.

It should be noted that no legal action is required in this case to retake the property. This estate is created by using the phrases “so long as” or “while or during.”

Using our ranch as an example, if the property is transferred to the new owner “so long as it is used only for the raising of cattle,” any other use would trigger the previous owner’s right of reentry, and property ownership would revert.

Defeasible estate Types

There are three types of defeasible estate:

• Fee simple determinable;
• Fee simple subject to an executory limitation or interest; and
• Fee simple subject to a condition subsequent

Fee simple determinable

A fee simple determinable estate is one that will end when the specified event or condition happens. The interest will revert to the grantor or the grantor’s heirs. Normally, a reverter possibility follows a basic determinable charge.

A fee simple determinable subject to an executory interest, on the other hand, does not follow a reverter possibility.

Durational phrasing, such as “to A for as long as the property is used for a park,” results in a simple determinable charge and the potential of reverter.

This interest has been abolished in some jurisdictions in the United States. Kentucky, for example, removed the fee simple determinable and the possibility of reverter by statute in 1960.

An attempt to create such an interest is construed as a fee simple subject to subsequent conditions (see below), and a person who would have a right of reverter under common law will instead have a right of entry.

As an example to A for the duration that the property is used as a museum. A has a simple determinable fee and will hold the land for as long as it is a museum; the grantor has a reverter option.

If the museum is closed, the land will be transferred to the grantor automatically.

Fee simple subject to an executory limitation

A fee simple estate subject to an executory limitation is an estate that terminates when a specific condition is met and then transfers to a third party.

The grantor will not receive the interest. If the condition is met, the grantee loses interest and the third party automatically acquires it.

For example:  To A as long as the land is utilized for a museum, but to B if it is used for anything else.

A is the owner of a defeasible fee simple subject to an executory condition, and B is the owner of an executory interest. If the land isn’t used for a museum, it’s automatically given to B.

Fee simple subject to a condition subsequent.

When the words of a grant support the conclusion that the grantor intends to convey a fee simple absolute but has attached a condition to the grant.

So that if a specified future event occurs, the grantor will get its fee simple absolute back, provided that the grantor exercises his right of entry.

As a result, a fee simple subject to condition subsequent does not automatically terminate upon the occurrence of the condition. The future interest is referred to as a “right of reentry” or “right of entry,” and the property only reverts to the original grantor if this right is exercised.

The right of entrance is not automatic, but must be used in order to terminate the fee simple subject to the following conditions.

To use the right of entrance, the holder must take significant efforts to reclaim possession and title, such as by filing a lawsuit. Physical entrance is not necessary, but the possessor must do more than simply declare an intent to reclaim.

The right of entrance is not automatic, but must be used in order to terminate the fee simple subject to following conditions.

To use the right of entrance, the holder must take significant efforts to reclaim possession and title, such as by filing a lawsuit. Physical entrance is not necessary, but the possessor must do more than simply declare an intent to reclaim.

As an example: To A; however, if A does not use the land for a museum, the grantor has a right of entry. A has a fee simple estate that is defeasible subject to a subsequent condition, and the grantor has a right of entry.

If the land is not used for a museum, the grantor must take steps to reclaim it. If the grantor does not act, the land will stay in A’s possession even when it is no longer used as a museum.

Fee simple determinable vs condition subsequent

The main distinction is that, unlike a fee simple determinable, which terminates automatically if the grantee (the person who acquired the land) fails to fulfill the condition, a fee simple subject to condition subsequent does not terminate automatically if the event or condition happens.

The right of reentry is entirely separate from the condition. The grantor can avoid automatic termination by exercising his right of reentry.

To do so, a lawsuit must be brought to take back the land. Moreover, the grantor cannot avoid this use of rights by simply not exercising them and allowing the land to pass on to a third party by means of a condition subsequent.

This principle is called “something more” or “additional promise.” The right of reentry will still exist, and the grantor cannot be forced to transfer his rights by simply doing nothing.

FAQs

What is Defeasible estate?

A defeasible estate is a charge on land, rather like a book voucher or an insurance policy. The grantor has the right to ‘defeat’ the defeasible charge by taking some action which will enable him to take back ownership of the land.

He can, for example, have possession of it back or he can have some other interest in it.

What is the difference between Defeasible Estate and Fee Simple Determinable?

Fee simple Determinable terminates at a future date specified in a deed, by operation of law, or by the performance of some act.

It automatically vests in the grantor after this time period. Fee simple Determinable terminates at a future date specified in a deed, by operation of law, or by the performance of some act.

It automatically transfers to a third party if the grantee fails to fulfill the condition. Fee simple Determinable terminates at a future date specified in a deed, by operation of law, or by the performance of some act.

It automatically transfers to a third party if the grantee fails to fulfill the condition.

What are Defeasible Interests?

A defeasible interest is a charge on land which can be defeated (defeated) by physical occupancy of the land or by a particular act of the grantee.

A defeasible interest is not transferable via a will, but it can be transferred to another person via some other method, such as by gift or devise.

What are the kinds of defeasible estates?

it is classified into three; Fee simple determinable, Fee simple subject to an executory limitation and Fee simple subject to condition subsequent.

What are the conditions of defeasible estates?

Such estates are of two kinds, ‘defeasible’ which means that they can be defeated. The other kind is ‘defeasible but absolute’. This means that they cannot be defeated.

What are the rights of defeasible estates?

A defeasible estate is a charge on land, rather like a book voucher or an insurance policy.

The grantor has the right to ‘defeat’ the defeasible charge by taking some action which will enable him to take back ownership of the land. He can, for example, have possession of it back or he can have some other interest in it.

Is a life estate a defeasible estate?

Life rents are not defeasible estates and do not come with the same rights for the grantor as defeasible estates.

What is a Fee simple subject to condition subsequent?

A fee simple subject to a condition subsequent is the same as a fee simple determinable, except that the right of reentry or right of entry can be exercised only if certain conditions are met.

What is a Fee simple determinable?

A fee simple determinable is an estate in land which will become absolute at some future time, specified in the deed, by operation of law or by performance of some act.

What is Fee simple subject to an executory limitation?

A fee simple subject to an executory limitation is the same as a fee simple subject to condition subsequent, except that the right of reentry or right of entry must be ‘executed’ in order to terminate the estate.

Is a fee tail defeasible?

Yes, A fee tail is a fee tail defeasible. It can be defeated by physical occupancy of the land or by some act of the grantee.

What is a Fideicommissum?

A fideicommissum is an estate in land which has been granted subject to certain conditions, but not yet executed (such as by making the necessary payments). The grantor can ‘defeat’ the obligation (to pay money) by taking some action which will enable him to take back possession of the land.

What is a springing executory interest?

A springing executory interest is an estate in land which becomes absolute at some future time, specified in the deed, by operation of law or by performance of some act.

Who can convey a future interest?

Any person who has the power to convey an estate in fee simple absolute.

How do you create a future interest?

A future interest is created by using such words as ‘when’, ‘as long as’ or ‘after’.

Can the right to terminate a lease contain the right of re-entry?

Yes, if the lease is classified as an estate at will under state law.

Are disclaimers against heirs valid for future interests?

Yes, the right of reentry is entirely separate from the conditions. It is a right that cannot be defeated by simply not exercising it.

What are the rights of vested estates?

A vested estate is a charge on land which has some interest to be defeated, which allows it to be defeated by physical occupation of the land or by some act of the grantee.

What is a vested estate?

A vested estate is a charge on land which has some interest to be defeated, which allows it to be defeated by physical occupation of the land or by some act of the grantee.

Are entails legal?

Yes, they are legal, they do not allow any owner to defeat an estate which is provided to an heir under it.

What is a legal entailment?

A legal entailment is a restriction on the transfer of an estate in land by will. It provides that the estate passes to a named heir, or to the heirs of a named individual or individuals.

When was entailment abolished in England?

Entailment was abolished in England and Wales by the Law of Property Act 1925 and in Scotland by the Law Reform (Formal Testaments) Act 1934.

What is entailed?

An Estate is entailed if it cannot be disposed of through a Will.

What is a defeasible argument?

It is an argument that involves a claim or a charge. It can be defeated by physical occupation of the land, by some act of the grantee or by some other act.

What is a pur autre vie life estate?

life estate for another life (plural: life estates for another life) (law) An estate in land granted by a grantor to a party exclusively for the period of the life of a third party, with ownership reverting to another upon the death of that third person.