What Does "Fee Simple Ownership" Mean?

When a property deed states that the owner has fee simple ownership, he owns the property above the surface of the land and the mineral properties below the surface of the land. The mineral properties may include oil, gas, mineral rocks or coal. Many deeds do not include fee simple ownership, and thus, there may be several ownership interests connected to the mineral estate of a tract of land.

A property deed includes language that names the grantor and grantee as well as wordings that describe the grantor or seller’s intent to transfer his ownership interest in a property to the grantee or buyer. The deed also includes a description of the property, such as the address and other identifying information, the property lot and the subdivision.

With a warranty deed, the grantor warrants that the property is free and clear of liens and encumbrances and that he has the ownership rights to transfer title to the grantee. The grantee does not make any guarantees with a quit claim deed; the grantee simply receives any ownership interest the grantor has in the property.

Typically, if the seller has fee simple ownership in the land, he owns the entire estate to the land. If the grantor transfers his entire ownership interest in the land, the buyer becomes the new fee simple owner. The deed may include words, such as fee simple ownership or fee simple absolute, which indicates that the grantor has absolute ownership interest in the land.

Fee simple ownership is the highest type of property ownership, whereas with a life estate ownership interest, for example, the owner only has lifetime ownership rights to the land. Fee simple owners may use and dispose of the entire land as permitted by law, and they are granted absolute ownership to the land. The property passes to the fee simple owner’s heirs upon death unless the owner has transferred title to the property during his lifetime or by way of a will.

With many land purchase agreements, sellers are not required to disclose who owns the mineral properties connected to the property. Many property owners do not know who actually owns the mineral estate, anyway – the subsurface rights may have been stripped from the deed many generations in the past, or may never have been included with the surface deed.

The Recorder’s Office in the county where the property is located is generally the best place to perform a search and discover the chain of title to a particular tract of land. Many counties maintain a record of deeds that trace back to the 1800s.