Estate in fee simple absolute in possession (‘freehold estate’)

Understanding the old law

The fee simple is the larger of the two legal estates, in that it is of greater duration. The technical name describes the characteristics of the estate as it existed before 1 January 1926. This is the date a number of statutes pass by Parliament in 1925 came into force and made considerable changes to the law relating to property. As a result, some of the characteristics off the fee simple estate were changed but the old name continues to be used. The following is therefore a brief explanation as to what the words mean under the old law. 

‘Fee simple’

It is this phrase which really causes the difficulty because of the changes made by the 1925 legislation. The word ‘fee’ denoted an inheritable interest in land and the word ‘simple’ tells us that the estate could be inherited by the ‘general heirs.’ This means that the estate would last as long as there were heirs to inherit. In a man died intestate (without making a will), any fee simple estate which he had owned would pass to his heir-a single individual who was identified according to complicated rules. If the deceased had children, the heir would be his eldest son. If the eldest son dies before his father but had himself left a son, that grandson would be his grandfather’s heir. If there were no sons to inherit, any daughters inherited the estate jointly. If the deceased had no descendants, his heir would be one of his blood relations, found among his brothers or sisters (or their descendants), or more remotely among his uncles aunts or cousins. At a later stage, one of the deceased’s ancestors, such as his father or grandfather, might be entitled to inherit. It might be therefore that the estate would pass to a fairly distant relation, as long as he or she was the closest living relative.

All this is now a matter of history, because the 1925 legislation abolished the old concept of the heir. Instead, new statutory rules of inheritance were imposed (and still apply with modifications), so really after 1925 one cannot define a fee simple by calling it an estate ‘inheritable by heirs general.’ What remains true is that the fee simple is an estate which can endure indefinitely, as long as there are persons entitled to take the property under the provisions of the will of the previous owner, or under the statutory rules relating to intestacy.

‘Absolute’

The word ‘absolute’ gives rise to further complications. The word indicates that the fee simple should not be subject to any restriction whereby it may not endure as long as there are persons entitled to inherit. So if One was to try to give their son a fee simple estate ‘until he qualifies as a solicitor,’ the gift cannot be of a fee simple estate. The estate will not necessarily last forever because it will end earlier should the son ever become a solicitor. This sort of agreement is called a ‘determinable fee.’ 

‘In possession’

The final words in the legal term for a freehold estate are ‘in possession.’ This means that the estate must be current, rather than being one which is to give the owner the use of the land at some time in the future. It should be noted that the estate owner does not have to be in physical possession of the land itself in order to have a legal estate. For example the property may be let to a tenant, in which case the tenant will be in physical possession of the land, whilst the landlord has the right to receive the rent payable under the lease. In which case the landlord still has a legal estate because LPA 1925, s.205 (1)(xix), provides that:

‘Possession’ includes receipt of rents and profits or the right to receive the same, if any. 

Effect of 1925 legislation

Before 1926, there were lesser types of legal estates, but LPA 1925, s 1(3) provides that interests which do not satisfy the new requirements for a legal estate are to take effect as equitable interests. This means that although arrangements of this sort can still be made, they now have to operate by means of a trust. In such a case, the legal fee simple is held by trustees on trust for those entitled to the equitable interests.