Defeasible estate

A defeasible estate is created when a grantor transfers land conditionally. Upon the happening of the event or condition stated by the grantor, the transfer may be void or at least subject to annulment. (An estate not subject to such conditions is called an indefeasible estate.) Historically, the common law has frowned on the use of defeasible estates as it interferes with the owners' enjoyment of their property and as such has made it difficult to create a valid future interest. Unless a defeasible estate is clearly intended, modern courts will construe the language against this type of estate. Three types of defeasible estates are the fee simple determinable, fee simple subject to an executory limitation or interest, and the fee simple subject to a condition subsequent.

Because a defeasible estate always grants less than a full fee simple, a defeasible estate will always create one or more future interests.

Fee simple determinable

A fee simple determinable is an estate that will end automatically when the stated event or condition occurs. The interest will revert to the grantor or the heirs of the grantor. Normally, a possibility of reverter follows a fee simple determinable. However a possibility of reverter does not follow a fee simple determinable subject to an executory interest. Durational language such as "to A as long as the property is used for a park" creates a fee simple determinable and a possibility of reverter.

Some jurisdictions in the United States have abolished this interest. For example, Kentucky abolished the fee simple determinable and possibility of reverter by statute in 1960. An attempt to create such an interest is construed as a fee simple subject to condition subsequent (see below), and a person who would have possibility of reverter at common law will instead have a right of entry.[1]

A fee simple determinable does not violate the rule against perpetuities, since the interest in real property reverts to the grantor or his heirs, who are measuring lives.

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