Property Ownership

What is a 'fee simple defeasible' estate in Pennsylvania real estate?

AA fee simple estate that can be defeated (annulled) only by a court judgment
BA fee simple ownership that may be terminated if a specified condition is violated (fee simple determinable) or if the grantor elects to retake the property upon a condition being broken (fee simple subject to condition subsequent)✓ Correct
CA mortgaged fee simple estate that can be defeated by lender foreclosure
DA leasehold estate with fee simple characteristics for a defined period

Explanation

A fee simple defeasible is a fee simple estate subject to potential termination. Two types: (1) Fee simple determinable — automatically terminates if the specified condition is violated ('so long as used as a school'); the grantor has a possibility of reverter. (2) Fee simple subject to condition subsequent — doesn't automatically terminate; grantor must exercise a right of re-entry if the condition is broken. Pennsylvania estate planners use defeasible fees in gifts to charitable organizations with use conditions.

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