Welcome. In this article I will discuss The Fee Simple Upon Condition Subsequent and The Right of Re-entry. Before discussion, I would like to disclose some of my thoughts. First of all, I understand that my writings on estates can, at times, be very hard to understand. You, as a particular reader, may not work as a title examiner or a property attorney. The result is that a discussion of an estate or multiple estates can leave the reader confused. This is normal and is to be expected. I have spent years studying these estates, and through my profession I have dealt with numerous clients, attorneys, homeowners, and business owners. My observations have formed a general rule: Estates are misunderstood.
When a buyer and seller begin negotiations, there are expectations on both sides. The buyer wants something, and the seller wants something. The estate(s) created by the conveyance from the seller to the buyer is the vehicle in which the parties carry out these expectations. Remember that my articles, when completed, will cover 11 estates. It follows like the night the day: If the majority of people lack basic knowledge of the available estates, the expectations of the parties to a transaction are frequently frustrated. In other words, the parties may not have fully benefited from the transaction. I'm beating this drum from an estate planning perspective. Many problems arise, particularly in probate, when the expectations of the parties have not been met, simply because they did not understand the estate vehicle they were using. Posting these articles is my attempt at changing this general rule.
At the conclusion of my estates articles, I will post a review article on the numerous estates. I will write the summary as it relates to three groups: (1) the homeowner or business owner; (2) the attorney, and (3) the title examiner. This culminating article will allow most readers to take what is necessary for them to understand. That being said, I will now discuss the second of our defeasible fee simple estates, The Fee Simple Upon Condition Subsequent and its counterpart, The Right of Re-entry. This discussion will be fairly brief, as these two estates are very similar in form and function to The Fee Simple Determinable and The Possibility of Reverter.
The Fee Simple Upon Condition Subsequent can be defined as a fee simple estate that is made defeasible by a condition attached to the conveyance, which condition, if violated, creates a non-automatic right in the original grantor to re-enter and take possession of the land.
Let's say that Bill Smith is the owner of Blackacre in fee simple absolute. Bill Smith then conveys Blackacre to Shirley Thomas, so long as the land is used for residential purposes, and if the land ever ceases to be so used, the grantor may re-enter and take possession. If you read the last posting on The Fee Simple Determinable, you will notice that the example I use above is almost identical to the example I used there. I did this on purpose to demonstrate the subtle change in form between the two estates.
Concerning the above example, focus on the portion the grantor may re-enter and take possession. This language demonstrates that upon a violation of the condition, the grantor may re-enter. However, the grantor is not required to re-enter. It is in the discretion of the grantor, when a violation of the condition occurs, to either enforce the condition or waive the condition. This is in direct contrast to The Fee Simple Determinable, in which the property automatically reverts back to the grantor upon a violation of the condition.
As with The Fee Simple Determinable, the condition attached to The Fee Simple Upon Condition Subsequent may never be violated. If such be the case, the property may remain in the grantee's family in perpituity. However, if the condition in our example is broken, the grantor has a cause of action based on the violation of the condition. To enforce this cause of action, the grantor must file an action in state court. In court, the grantor must show that the condition was properly created and that there has been a clear violation of such condition. Upon a finding in favor of the grantor, the grantee will be dispossessed of its interest and the grantor will again hold title in fee simple absolute. Compare this result to that of The Fee Simple Determinable, in which no legal proceedings are necessary.
It is the automatic reversion of The Fee Simple Determinable and the right of a cause of action of The Fee Simple Upon Condition Subsequent that differentiates these two estates. The condition placed in a deed must be carefully crafted to ensure the proper intention of the grantor.
Again, when a grantor creates a Fee Simple Upon Condition Subsequent, the grantor has carved a piece out of its Fee Simple Absolute estate. By definition, we know that there must be an estate that follows The Fee Simple Upon Condition Subsequent in order to satisfy the calculus of estates. No surprise, this estate is The Right of Re-entry. Using our example, the current possessory estate is a Fee Simple Upon Condition Subsequent held by Shirley. The possible future estate is The Right of Re-entry held by Bill. This future interest will only become possessory upon a violation of the condition placed on The Fee Simple Upon Condition Subsequent coupled with the grantor's decision to enforce such violation.
Until next week, Chow - - - The Hungry Dog!!
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