What is a defeasible fee estate and how can it be terminated?

• A. A life estate that ends upon death
• B. A fee simple estate that ends upon a condition; it terminates if the condition is violated or an event occurs, returning title to the grantor or other reversionary holder
• C. A leasehold interest that terminates at end of tenancy
• D. A fee simple absolute that can be defeated by mortgage

Answer: (B)

Defeasible fee estate means a fee simple ownership that can be cut short if a specified condition occurs or is violated. It stays with the grantee only while the condition is met; once the condition fails or the event happens, ownership ends and the title returns to the grantor or passes to another person with a future interest (an executory interest). This is why the best description is a fee simple estate that ends upon a condition or event, returning title to the grantor or a reversionary holder.

Context helps: think of a grant that says the property can be used only for a school. If it’s no longer used as a school, the property reverts back to the grantor (or to someone else named in the deed). This is different from a life estate, which ends at death; a leasehold, which ends at the end of a lease term; or a fee simple absolute, which can’t be defeated by a mortgage.