Legal Definitions - fee interest

A fee interest represents the most comprehensive and complete form of ownership one can have over real property, such as land. When someone holds a fee interest, they own the property indefinitely, meaning their ownership is not limited by time and can typically be passed down to their heirs. This type of ownership includes all the rights associated with the property, encompassing not only the surface of the land but also the space above it and the resources beneath it, such as minerals or water, unless those specific rights have been separately sold or reserved by a prior owner.

Here are a few examples to illustrate the concept of a fee interest:

• Residential Home Ownership: Imagine a family purchases a house with a yard in a suburban neighborhood. They receive a deed that grants them a fee interest in the property. This means they own the house, the land it sits on, and the rights to the ground beneath it, without any time limit. They can live there indefinitely, sell it, or pass it on to their children through inheritance. Their ownership is considered complete and perpetual.

  This illustrates a fee interest because the family has the most extensive form of ownership, including both the surface (house and yard) and subsurface rights, with no expiration date on their ownership.

• Agricultural Land with Mineral Rights: A farmer owns a large tract of land where they grow crops. Unbeknownst to them for many years, valuable natural gas deposits lie thousands of feet beneath their fields. Because the farmer holds a fee interest in the property, their ownership extends not only to the surface used for farming but also to the subsurface mineral rights. This allows them to negotiate a lease with an energy company to extract the gas, providing them with royalties, or to sell those mineral rights separately if they choose.

  This example demonstrates a fee interest by showing that complete ownership includes both the surface (for farming) and the valuable resources beneath the ground (mineral rights), which are part of the comprehensive bundle of rights associated with this type of property ownership.

• Commercial Development Site: A real estate developer acquires a vacant lot in a bustling city center with the intention of constructing a multi-story office building. The developer secures a fee interest in the property. This ownership allows them to build upwards into the airspace above the lot (within zoning regulations) and to excavate downwards for foundations and underground parking. Their ownership of the land itself is permanent, enabling them to develop, lease, or sell the completed building and its underlying land without a time constraint on their fundamental property rights.

  This scenario highlights a fee interest by showing that the developer's complete and indefinite ownership of the land grants them the full spectrum of rights necessary for development, including air rights and subsurface rights, which are fundamental to constructing a large commercial property.