Fee Simple and Others

In the last chapter we discussed real property and personal property, distinguishing them in the easy case and the hard case.  In this chapter, we will turn to discussing ways in which land may be owned, and who may own it. Before we discuss different types of ownership, however, it is important to discuss the concept of “fee simple.”

First, it is useful to recall that the term “property” refers to a bundle of legal rights – a valuable right or interest in something, and the right to legally use or dispose of that thing, rather than simply a “thing.” Put another way, “property” not only means the “thing” itself, but any rights that come with ownership of the “thing.” Courts as lofty as the U.S. Supreme Court have highlighted that property consists of “the group of rights which the so-called owner exercises in his dominion of the physical thing,” such as “the right to possess, use and dispose of it.”^[1]

As you practice, you will often see the term “in fee simple” in documents and deeds. This phrase is a description of the rights inherent in total ownership of property. Learning the phrase and its meaning will be helpful now, and later, when we will be discussing rights related to leasing, co-owners, etc.

There are various types of ownership called “fee simple,” namely (1) fee simple absolute; (2) fee simple determinable; (3) fee simple subject to a condition subsequent; (4) fee simple subject to an executory limitation; and (5) fee simple conditional. Other than “fee simple absolute,” all the other types refer to ways in which an owner can lose ownership of land due to the occurrence of some event.  For purposes of this text, all you need to know is that any type of “fee simple” other than “absolute” means that the owner can lose ownership – otherwise, we will focus on “fee simple absolute.”

In Indiana law, “fee simple absolute” is usually just referred to as “fee simple,” and is defined as: “[t]he entire and absolute interest and property in land.”^[2] For instance, Black’s Law Dictionary states that “fee simple” means:

An absolute or fee- simple estate is one in which the owner is entitled to the entire property, with unconditional power of disposition during his life, and descending to his heirs and legal representatives upon his death intestate.[3]

[1] Phillips v. Washington Legal Found., 524 U.S. 156, 170 (1998)

[2] Alsman v. Walters, 184 Ind. 565, 106 N.E. 879, 880 (1914)

[3] Id.