The Fee Simple Flashcards
What is the main kind of fee simple?
The Fee Simple absolute
however, there are other kinds of modified fee simples
What are the other modified fee simples?
A determinable fee:
- A fee which will last until the occurrence of a determining event which might never happen.
Fee simple subject to a right of entry or re-entry (also known as a conditional fee):
- This is a fee with a condition subsequent.
What is conditions precedent?
- fees may also be subject to initial requirements that must be fulfilled in order to obtain the interest.
- These are called conditions precedent.
- Sometimes there can be confusion between whether a condition is precedent or subsequent.
- Further confusion often arises between determining and right of entry/re-entry fees.
- Also of importance, is that any additional modifications must comply with public policy.
What is Condition Precedent?
This is a condition which must be fulfilled for the grant of a fee simple to take effect.
If the condition is never fulfilled, the fee simple is never vested.
- Once the condition is fulfilled the person receives the fee simple.
- A condition precedent must be satisfied before the fee simple is vested in the grantee.
- E.g., “To Ian in fee simple if Ian becomes a teacher”. If Ian never becomes a teacher, then he will never get hold of the land.
- Ian therefore has a future interest which will only become an actual present interest if the condition is fulfilled.
What is Condition subsequent?
The land is vested in the new owner dependent on the operation of a subsequent condition.
The condition could be negative or positive.
Failure to comply with the condition will result in the land being divested from the grantee.
- The land vests in the grantee immediately but the continuance of this vesting is dependent upon the fulfilment of a condition after the vesting.
- If the condition is not satisfied, then the land will be divested.
- “To Ian in fee simple provided Ian remains working as a solicitor.”
- Ian is already a solicitor, so he does not have to do anything to receive the land.
- However, if he fails to remain in this occupation, he will be divested of the land.
What is Confusion?
- Sometimes it is unclear if something is a condition precedent or a condition subsequent.
- A condition precedent must be satisfied before the interest is vested in the grantee, but an estate is vested and held subject to the fulfilment of a condition subsequent.
- However, the courts favour conditions subsequent because the fee simple is vested in the grantee immediately (early vesting), whereas the condition precedent delays the grantee’s interest taking effect.
- There is a presumption in favour of “early vesting”.
- Howlin & McGrath suggest that the presumption exists to support the swift exchange of property in a capitalist economy.
- In general, it is more straightforward if the land is vested immediately as opposed to delayed which in turn could lead to uncertainty re who owns it.
What happened in Re Porter: Logan v Northern Bank Ltd & Ors 1971?
- Testator left business premises to brother on the condition that the brother paid £4000 to specified trustees within 6 months or make arrangements for its payment within 6 months.
- It was also specified that if the brother did not undertake either of the above, then he would lose the interest.
- The brother never paid the money and claimed that the condition was a condition subsequent and void for uncertainty.
- Lord Lowry held that it was a fee simple subject to condition subsequent.
- This was due primarily to the wording of the clause.
- Although the clause in essence required the payment of money as a condition to obtain a fee simple, the clause specified that the interest would be revoked if the money was not paid.
- This suggested that the property should be vested prior to the condition being fulfilled.
- Further as the condition was not clearly drafted to indicate what arrangements would suffice for making this payment, the clause was void for uncertainty.
- Therefore, the brother got to keep the land without having to fulfil the condition.
What are the 3 relevant concerns to determine if a condition was subsequent or precedent?
- Intention of the grantor (particularly important if a will)
- Presumption of early vesting- where there is no clear intention from the words, presumption that the condition is subsequent. (This presumption exists because it supports the alienability of the land)
- This presumption is rebuttable if there is a time limit for vesting the estate or if the condition is to be performed without delay.
What is the Fee Simple Absolute?
- “If a fee simple is held in possession without any modifications, limitations, or conditions we know it as a “fee simple absolute”. (DL)
- This is the nearest thing to absolute ownership of land in law.
- It constitutes complete control that has the potential to last forever.
Unregistered Land:
Section 67(1):
- “A conveyance of unregistered land with or without words of limitation, or any equivalent expression, passes the fee simple or the other entire estate or interest which the grantor had power to create or convey, unless a contrary intention appears in the conveyance.”
Registered Land:
Section 123 Registration of Title Act 1964:
- “An instrument of transfer of freehold registered land without words of limitation, or any equivalent expression shall pass the fee simple or other the whole interest which the transferor had power to transfer in the land unless a contrary intention appears in the instrument.”
Modified Fees:
- “Estates can be made subject to “conditions” which may bring them to an end before they would normally do so, or which must be satisfied before they can arise.
- The word “conditions” is used in inverted commas because the law makes a technical distinction between conditional interests and determinable interests, and so “conditions” should be reserved for the former type of interest.
- The word “modified” is used to cover both types and “determining event” as the equivalent of “condition” when discussing determinable interests.
- At common law any legal estate could theoretically be made subject of conditions or determining events.
- In practice, the fee simple was the estate which was most modified in this way.”
- (Lyall on Land Law, 2018)
What did Lyall say on Land Law 2018?
- “It might have been thought that the LCLRA [ Land & Conveyancing Law Reform Act] 2009 would have swept away the modified forms of fee simple in line with its broader objective to simplify and clarify the law of real property. This point has even more force when it is recalled that Porter MR once described the distinction between conditional and determinable fees as “little short of disgraceful”. The Explanatory memorandum published alongside the Land and Conveyancing Law Reform Bill 2006 states that the modified forms of fee simple had been retained to facilitate situations in which it would not be appropriate to impose the trusts of land regime set out in Pt 4 of the Bill [more on this later!]. The Explanatory Memorandum took the view that the restrictions imposed by conditional and determinable fees simple were “relatively minor qualifications on the ownership of the fee simple”. The extent to which this is true is debatable, though the courts have historically exercised a degree of supervision and control over conditions which might be regarded as objectionable from a public policy perspective.”
What is a determinable fee?
- “A fee simple determinable arises where a fee simple is granted subject to the continuation of a state of affairs.” (DL)
- “The determinable fee is a fee simple which will end automatically on the happening of a contingency, i.e., a specified event which may never happen.” (Lyall on Land Law)
- If this state of affairs ends/ the contingency occurs, then the fee simple determinable ends automatically and the grantor (or their successor) is revested (gets back) with the fee simple.
Example:
- “To Ian in fee simple so long as/ until/ while Northern Ireland remains part of the UK”
- If Northern Ireland left the UK, then Ian’s fee simple would terminate automatically.
- The fee simple would revert back to the original grantor or their successor.
- This suspended interest of the grantor or their successor is known as possibility of reverter.
Whether the event will happen must be uncertain - Explain
- To Ian in fee simple as long as Boris Johnson/ Liz Truss is prime minister of Britain.”
- This would not constitute a determinable fee because Boris Johnson/ Liz Truss will have to stop being prime minister of Britain at some stage (even if he remained prime minister until death.)
- it is an event that will (as opposed to might) happen.
