A defeasible estate is when a property owner passes property from one party to another based on a condition such as the requirement to use a property for a specific purpose.
A fee simple defeasible estate is common when individuals or a group donate or sell a property for a specific purpose, such as the construction of a school or a hospital. If the property is not used for that specific purpose, the grantor of the property is entitled to the return of that property.
If a property owner fails to meet the imposed conditions, the original estate grantor may bring legal action against them. The statute of limitations is five years after the violation occurs. Although a buyer’s failure to uphold the conditions may result in the property’s forfeiture, courts typically will not require the violating party to forfeit the property. Rather, the courts will determine they pay a fine to the original estate grantor.
Fee simple defeasible is a fee simple absolute with certain conditions imposed upon the property owner. The agreement transfers property from a seller to a buyer, but with the stipulation that the buyer must uphold certain condition laid forth in the deed. If all conditions are met, the buyer possesses full ownership over the property. If the buyer violates the conditions, his or her ownership may be terminated.
A condition precedent is a provision that prevents something from occurring on the property.
A condition subsequent is an event that terminates an estate.
For example, a property owner may agree to sell his property on the condition that the buyer does not convert the property into a strip club (a condition precedent). If the buyer agrees, and signs a deed explicitly stating this condition, a fee simple defeasible is formed. If the buyer were to later violate that provision by building a strip club (condition subsequent), the property may be transferred back to the seller.
A fee simple defeasible estate is common when individuals or a group donate or sell a property for a specific purpose, such as the construction of a school or a hospital. If the property is not used for that specific purpose, the grantor of the property is entitled to the return of that property.
If a property owner fails to meet the imposed conditions, the original estate grantor may bring legal action against them. The statute of limitations is five years after the violation occurs. Although a buyer’s failure to uphold the conditions may result in the property’s forfeiture, courts typically will not require the violating party to forfeit the property. Rather, the courts will determine they pay a fine to the original estate grantor.
Case Law Regarding Fee Simple Defeasible Estate
Case Review: Alamo School District v. Jones (1960)
The case, Alamo School District v. Jones (1960) 182 Cal.2d 180., involved a grantor who conveyed land by quit claim to the government for the purpose of developing a school.
The grantor (Jones) conveyed land to the Alamo School District for the purpose of developing a school. The transaction contained a provision that granted Jones the right to repurchase the property at the same price, should the Alamo School District choose not to develop a school. When Jones died, his heir (also Jones) claimed interest in the property. The heir filed a declaratory judgment to determine the property rights regarding the land.
The Superior Court ruled in favor of the Alamo School District, stating that the deed created a fee simple estate, which meant the presence of a reversion was not possible. The court further concluded that the language in the deed was personal in nature and therefore, could not be assigned by the deceased Jones to his heir. This meant that even if the Alamo School District did not choose to develop a school, Jones’ successor was not entitled to repurchase the land.
Case Review: Springmeyer v. City of South Lake Tahoe (1982)
The case, Springmeyer v. City of South Lake Tahoe (1982) 132 Cal.3d 375., involved a grantor who brought action against the city for attempting to quiet title of real property.
The property in question had a deed to the city by Springmeyer. The deed included a virtue of reversion provision, which stated that the land would be used for government purposes. The two conditions of reversion were: the city’s failure to build and occupy the buildings for city purposes and second was if the property failed to occupy one or more buildings. The plaintiff brought action to quiet title claiming the defendant had failed to use the property for city purposes.
The court ruled the plaintiff did not state a valid cause of action. The court concluded that claiming reversion was a drastic remedy and that if the plaintiff did not want to claim reversion it had to be stated clearly in the contract, which the court believed was not clear. Ultimately, the defendant’s objection was granted by the court and the plaintiff’s lawsuit was thrown out of court.
