Fee Simple Defeasible
Definition and meaning of Fee Simple Defeasible in real estate.
Fee simple defeasible is a type of property ownership that is subject to specific conditions, which can cause the title to revert to the grantor if those conditions are violated.
In more detail
This form of ownership is divided into categories, such as fee simple determinable and fee simple subject to a condition subsequent, depending on the wording of the deed. If the condition is broken, the original owner or their heirs can regain ownership, either automatically or through legal action. Buyers should review deed restrictions carefully to avoid losing their rights.
Key facts
| Category | Legal, Titles & Closing |
|---|---|
| Also known as | Conditional fee simple |
| Watch out for | Automatic reversion or right of reentry clauses in the deed |
| Primary risk | Loss of title if deed conditions are violated |
A benefactor donates a parcel of land to a school district on the condition that it is used only for educational purposes, meaning the land returns to the benefactor if a commercial business is built there.
Frequently asked questions
What happens if a condition in this type of deed is violated?
Depending on the deed terms, the property title either automatically returns to the grantor or the grantor obtains the right to take legal action to reclaim it.
Can you get a mortgage on this type of property?
Lenders are often reluctant to finance these properties because the risk of losing the title makes the collateral unstable.