May 15, 2008

Ask The Lawyer

The real meaning of a “fee” interest in real estate

This week's question:
My husband and I just purchased a nice home here in the Almaden Valley. Everything went quite smoothly and escrow closed right on schedule. However, after escrow closed and our family moved in, we received our policy of title insurance about three weeks after the close. It all looks quite normal except for one thing. It states in the first part of the policy that we own a “fee interest.” What is that, anyway? Is this good or bad? If it is bad, do we have any recourse against our agent for misleading us? Or do we have any recourse against the title company for messing things up? Please help. We have paid enough fees already!

Marilyn M.
Almaden Valley


Dear Marilyn,
Congratulations on the purchase of your new home in Almaden. I’m sure you will find that this is a great place to live and work.

So often I must bring bad news to my clients and readers of this column but in this case, I have some good news for you. The word “fee” in your policy of title insurance is a very good word. You need not be concerned about a thing. Allow me to explain.

I would suspect that almost all of our policies of title insurance pertaining to our homes provide for the word “fee.” Just what is “fee” ownership, anyway?

The first part of most policies of title insurance state something to the effect that “The estate or interest in the land which is covered by this policy is a fee.” And then the policy usually states the owner or owners’ names and how title is held, such as within a living trust, as community property with or without the right of survivorship, tenancy in common, joint tenancy with the right of survivorship, or otherwise.

Why is the word “fee” in your policy of title insurance a very good word? Because “fee” ownership is the closest thing to absolute ownership one can have. My Black’s Law Dictionary, Seventh Edition, defines “fee” in the context of “fee simple,” as follows:

“Fee simple” is an interest in land that, being the broadest property interest allowed by law, endures until the current holder dies without heirs, especially fee simple absolute. This is often shortened to “fee.”

Black’s goes on to state that “fee simple is a term not likely to be found in modern conversation between laymen, who would in all probability find it quite unintelligible. Yet to a layman of the 14th Century the term would have been perfectly intelligible, for it refers to the elementary social relationship of feudalism with which he was fully familiar: the words “fee” and “feudal” are closely related…The estate in fee simple is the largest estate known to the law, ownership of the land itself which is consonant with the feudal principle of tenure.

Fee simple ownership is the most comprehensive estate in land, which the law recognizes; it is the most extensive in terms of quantity, and the most absolute in respect to the rights, which it covers, of all estates known to the law.

Traditionally, fee simple ownership has two distinguishing features: first, the owner has the power to dispose of the fee simple, either during his or her lifetime or by will or trust, and second, if the owner dies without a will or trust, the fee simple descends to that person’s heirs.

You can readily see the difference in other types of ownership, such as if you had a leasehold interest as a tenant for a period of years, for example. Another example of something less than “fee” ownership would be that of a life estate, where you had the right to occupy a certain piece of property for the rest of your life, and then it would automatically pass on to the next owner(s).

Still another example of less than “fee” ownership would be ownership of “just” mineral or geothermal rights in connection with the land but not the land itself.

And, of course, “fee ownership” has nothing to do as such with the costs, monetary fees and other expenses of an escrow, such as real estate commissions, notary fees, document preparation and other items. I know that those items add up fast, but “fee ownership” is a separate topic.

So, Marilyn, you can see that “fee ownership” is very, very good in your situation. It is basically the greatest ownership you and your family can have. I’m pleased that your escrow closed on schedule and that there were no complications. I’m sure you and your family will be happy in this beautiful valley.

Donald J. DeVries
Almaden Valley


Donald J. DeVries is an attorney practicing law in Almaden Valley. If you would like him to answer your question in his next Almaden Times column, you can reach him by e-mail at don@almadenvalleylawyers.com, fax at (408) 268-6502, telephone at (408) 268-9500, or mail at, 6475 Camden Avenue, Suite 200, San Jose, CA 95120. Your matters are personal and private, so of course, he will not disclose your identity or any details about your situation. To view Almaden Times columns since 1986 visit www.almadenvalleylawyers.com. DeVries writes this column to provide you with general information about important legal matters affecting California residents—not to give you legal advice about your specific matter. No attorney-client relationship is created by these articles. The law is complex and constantly changing and varies from state to state. So you should consult an attorney before taking any action that would affect your personal or business matters.