You need to pay taxes: Fee simple ownership doesn’t exempt an owner from paying taxes.What are the restrictions associated with fee simple ownership?įee simple ownership is the broadest form of real estate ownership, but there are still rules and restrictions fee simple owners have to follow. When the owner sells you the home, they legally transfer their fee simple ownership rights to you once the purchase is complete. When you buy a home, the owner has (or should have) the bundle of rights attached to the property. The typical single-family home sale is a fee simple purchase. Use it as collateral: You can use the property as collateral for a home equity loan or a home equity line of credit (HELOC).Rent the property: You can rent or lease the property or enter into a joint tenancy agreement.You can sell it, donate it, gift it or will it. Sell the property or pass on ownership: It’s your property.Put additions on the property: Want to add a new bedroom or a raised deck? Have at it!.Build new structures: Want to install a swimming pool, build a storage shed or a detached garage? Go for it!.While fee simple is the more widely accepted term to describe this type of estate ownership, the same bundle of rights can go by other names, including fee ownership, estate of ownership or absolute ownership.Įmail Facebook LinkedIn Reddit Twitter How Fee Simple Worksįee simple ownership entitles an owner to the complete set of property rights (aka bundle of rights).Īn owner’s bundle of rights includes the right to possess the property, the right to deny entry to others and the right to sell the property or give it away.įee simple ownership also allows property owners to:
Fee Simple Ownership, Definedįee simple ownership gives an owner the freedom to do just about anything they want with their property - as long as they aren’t breaking any laws or violating any legal restrictions. As the fee simple owner, you can live on the property, modify it, give it away or sell it.Īfter reading this article, you’ll understand fee simple in real estate and how it might affect you. Simply put, fee simple ownership means you’re in complete control of the property you own, and your ownership is mostly free from any restrictions. Whether you’re deep into your buyer’s journey or have only gotten as far as casually scrolling through real estate websites, it’s helpful to know the definition of fee simple and the different types of fee simple estates. And one of the terms you may come across during this process is “fee simple.” The home buying process may have you wading through unfamiliar waters, including the navigation of legalese.
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