Fee Simple Ownership and Land Use Rights

‘‘Fee Simple Ownership’’ is a form of real property ownership in which a property owner unconditionally controls a specified piece of land, including all structures and rights to use the property. It is the most complete interest in real property someone can have. The term is also used as ‘fee simple absolute’.

Fee simple ownership has both geographic and temporal dimensions. The term not only conveys control over the three dimensions of property – across the surface and extending within the boundaries of the property upward and downward, but also conveys control of the property indefinitely into the future.

Private property land rights associated with fee simple ownership include the right to develop the land, the right to till the soil, the right to cut timber, the right to exploit subsurface minerals, and sometimes to use its water resources. A fee simple owner of property is sometimes described as owning the entire ‘bundle of rights’ or holding the entire ‘bundle of sticks.’

Fee simple ownership of property may be divided in three specific ways: (1) physically; (2) by specific use rights; and (3) over time. The physical division of property into two or more parcels of land allows the fee simple owner to sell or give away physical portions of the property while retaining others. Also, the owner may partition and sell certain rights to utilize resources of the property. For instance, the right to extract minerals from the property may be sold to another person while the original owner retains rights to the other uses of the property. Finally, the fee simple owner of property may create present and future interests in the property through legal documents such as a wills or rental/lease agreements.

It is important to note that while fee simple ownership bestows both material and spatial rights to the use and enjoyment of property, those rights are also limited by local, state, and Federal laws. The use restrictions conveyed by local zoning ordinances limit a property owner’s ability to utilize the property for its ‘highest and best use.’ State laws related to construction materials and practices restrict building designs for structures on real property. Finally, Federal regulations concerning the filling and dredging of wetlands limit a property owner’s use of surface and subsurface materials.