A present estate gives a party present possession over land. There are two types – Freehold estates
which give parties title to the land like deeds, and non-freehold estates which merely give
possession over land like leases or easements. Generally, a grantor will give his land to a grantee,
which is the present estate. There are three types of present estates.
Fee simple absolutes are given to a grantee for an indefinite duration. Thus the grantee will continue
to hold the present estate for an indefinite period of time and it cannot be taken away from him by
the grantor. Wordings such as ‘With hope that’ or ‘For the purpose of’ signify a fee simple. The
grantee may transfer the fee simple by devise, inheritance or conveyance. However, they cannot be
removed from the grantee by the grantor because they are freely alienable. Thus there are no future
interests in fee simples.
Defeasible fees are different to fee simple absolutes in that they grant present possession to the
grantee for a ‘potential’ indefinite duration. This means that there is a possibility that the grantee
may lose his possession at some point in the future due to a specified event. There are three types of
defeasible fees. A fee simple determinable grants a present estate to a grantee for a potentially
indefinite period, unless a condition is not fulfilled. Wordings such as ‘on condition that’, ‘for as
long as’, ‘while’ or ‘during’ are examples of a defeasible fee. If the condition is not fulfilled, the
land will revert back to the grantor through his ‘possibility of reverter’. The advantage with fee
simple determinables (FSD) is that such reverter does not have to be expressly stated; the land
automatically reverts back to the grantor. Also, the reverter may be transferred to another party
either by conveyance, devise or inheritance. The grantee can also transfer his defeasible fee to
another party in the same manner, but the subsequent grantee remains subject to any conditions
which will revert back to the grantor should the condition not be fulfilled. Fee simple subject to
condition subsequents (FSSCS) also grant present estates to a grantee for a potentially indefinite
period. Wordings like ‘but if’ or ‘if it happens that’ are notable examples. However, unlike a fee
simple determinable, FSSCS does not automatically guarantee reversion to the grantor if a specified
event occurs. A FSD includes a condition precedent, which requires that a condition be fulfilled for
the land to transfer to the grantee. Whereas a FSSCS includes a condition subsequent, which has the
opposite effect. The land will revert back to the grantor should the condition be fulfilled, but only in
limited circumstances. In this case, the disadvantage of a FSSCS is that the land only reverts if a
‘right of re-entry’ is expressly stated in the conveyance. This is different to a fee simple
determinable, which does not require any expression of such a reverter option because it is
automatic. Thus, having a FSSCS can provide problems for grantors. In fact, the right has to be
exercised by the grantor for the land to revert back. Until then, the grantor still has the right of re-
entry but not a fee simple until he exercises it, and the grantee will continue to have a FSSCS
because it has not been reverted back yet. In terms of transferability, the FSSCS is transferrable in
any way, but the right of re-entry is only transferrable by will or intestacy. The right of re-entry
cannot be transferred by conveyance to any other party. Where the wording in a deed uses
expressions of both a FSD and FSSCS, courts will tend to presume it is a FSSCS for public policy
reasons because they disfavour the automatic forfeiture of defeasible fees unless the grantor
exercises his right to enter the land and take it back. A fee simple subject to executory interest is
similar to a FSSCS where it includes a condition subsequent and the meeting of that condition will
cause the grantee to lose his possession. However, it is different to a FSSCS in that the land may
transfer to a third party instead of reverting back to the grantor.
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