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What Is a Fee Simple Estate?

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  • Written By: Malcolm Tatum
  • Edited By: Bronwyn Harris
  • Last Modified Date: 03 November 2018
  • Copyright Protected:
    2003-2018
    Conjecture Corporation
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A fee simple estate is a situation in which the owner of the property has the ability to make use of the holding in any way he or she chooses. This is possible because an estate of this type has no type of obligations, liens, or other claims that would encumber the owner from doing whatever he or she wanted with the property. Typically, the only restrictions on a fee simple estate are those that are imposed on all property holdings within the jurisdiction, such as building codes and zoning laws.

Constituting an absolute title to the property, the owner of a fee simple estate is perfectly free to use the property for any purpose desired, assuming those purposes are legal in the area where the property is located. This means that if the property is located with a city limits, the owner must observe any regulations that relate to property within its jurisdiction. For example, if the owner wants to raise chickens and establish chicken coops on the property, this can only occur if current zoning regulations specifically allow for or at least do not prohibit this type of activity within the neighborhood. Even then, the owner may have to situate the coops a certain distance from all property lines, or follow other rules that govern the keeping of livestock in the city limits.

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Another benefit of a fee simple estate is that the property can be passed on to heirs with relatively little effort. Unlike properties that are encumbered by some sort of financial obligation, such as being held as collateral on some sort of loan, the fee simple estate does not involve any type of limitation that must be settled before the transfer takes place or obligates the recipient to pay off some any debt associated with the estate before assuming ownership.

Owners can choose to use a fee simple estate as collateral in order to secure a loan or some extra time, if that becomes necessary. Since there are no pre-existing obligations connected with the estate, lenders are often open to the idea of lending amounts that are equal to a certain percentage of the current market value of that estate. Thanks to the fact that there are no obligations on the estate that would have a prior claim, this also means that the level of risk to the lender is lower, and the owner is likely to secure better terms and conditions, or possibly even a lower rate of interest.

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