'In Fee Simple' to 'Fee Simple'; What it Means for Victorian Property Owners

A change in wording on Certificates of Title in Victoria has raised alarms with current and prospective property owners in the state. 

Specifically, Victorian Certificates of Title used to reflect ‘Estate In Fee Simple,’ however they now reflect ‘Estate Fee Simple’ dropping the ‘in’. 

So, what does Fee Simple even mean? Good question! According to the Oxford Dictionary, the term 'Fee Simple' is a noun defined as "permanent and absolute tenure in land with freedom to dispose of it at will."

According to the Black's Law Dictionary (4th Edition, page 746): "A fee-simple, so called because fee is the same as inheritance, and simple is the same as lawful or pure; and thus fee-simple is the same as a lawful inheritance, or pure inheritance." 

In other words, when you own property in fee simple, it means you have full ownership rights without any time limits, including the right to pass it down to heirs or others in your will.

While the change from ‘In Fee Simple,’ to ‘Fee Simple’ may seem minor, some prominent voices are claiming this diminished wording has altered the nature of land ownership. A few are going so far as to claim that land is no longer held by individuals, but ownership has been handed over to the government or the crown, and that the rights to the land can no longer be inherited, In short, claiming property rights have transitioned from freehold to leasehold.

Whereas others assert that this wording update has no effect on ownership rights. Words like "in," "into," "of," "a," and "the" are function words or grammatical words. They serve to structure sentences rather than carrying specific lexical meaning, unlike content words, like nouns, verbs, adjectives, etc. They argue, the noun 'Fee Simple' carries the definition, therefore dropping the 'In' has no impact on its legal standing.

Several Acts of Parliament and regulations relate to land dealings in Victoria, including the Transfer of Land Act 1958, and the Property Law Act 1958. Both of these Acts refer to the term as it applies to land as “Fee Simple," “In Fee Simple,” Into Fee Simple," "Of Fee Simple," “A Fee Simple” and "The Fee Simple," in various sections. This supports the argument that It is the noun “Fee Simple” that carries the meaning, and therefore, removing "In" from "In Fee Simple" to simply "Fee Simple" on a title does not diminish ownership rights.

The Blacks Law Dictionary also refers to the term as “Fee Simple,” “A Fee Simple,” “In Fee Simple,” and “Of Fee Simple” when talking about estates, which gives further credit to the notion that the “In” is not critical to the standing of “Fee Simple.”

Despite these assurances, many homeowners remain uneasy, particularly given the historical importance of property terminology. Even small changes in wording can spark fears that ownership rights are subtly being curtailed, potentially paving the way for future government controls or limits on property rights.

Is there a real reason to worry that this change could eventually lead to reduced ownership rights? Personally, I don’t deal in speculation, I only deal in facts. Here are a few facts to consider to help ease any concerns you may have:

1. Not a Recent Change: Though concerns are only now surfacing, this change in terminology was implemented well over two decades ago, in the transition from the parchment/historical paper Certificates of Title to the current version, being the blue A4 paper Certificates of Title of today (which was white in it's earlier editions). Since then, hundreds of thousands of properties have been sold or inherited with no impact from this wording update. 

2. Contracts Are Binding: Legal contracts establish the law. The Transfer of Land contract, up until 2014 (and in some cases beyond this date), retained the wording, “All My Estate In Fee Simple,” or, “All Our Estate In Fee Simple”. 

This Transfer of Land contract, once signed by the transferor (the seller) and the transferee (the purchaser) and then endorsed by the Titles Office, is the binding contract upon which the Certificate of Title is created. Even if the 'In' is as significant as some claim, whether or not “In” appears on the final Certificate does not alter the legal rights established by the contract. 

Whereas the current Transfer of Land contract form (for non-represented parties), which is now digital, gives you two options under the 'Estate and Interest' section, 1) 'Fee Simple,' or 2) 'Other' with a subcategory of 'Leasehold Estate.' 

My question is, how can 'Fee Simple' be 'Leasehold' when on the current Transfer of Land contract form, 'Leasehold' is designated as something other than 'Fee Simple'? The Estate and Interest is either Fee Simple, OR Leasehold, it can't be both. 

Now finally, I'll discuss the difference between a Leasehold Title and Freehold Title.

Leasehold Title:

• Temporary Rights: The leasehold title grants the lessee (tenant) the right to occupy and use the land for a specific, defined period. This period can vary but is typically 99 years.

• Ownership of Land: In a leasehold arrangement, the lessee doesn’t actually own the land; they only have the right to use it during the term of the lease. Once the lease term expires, the rights to the land revert to the lessor (landowner).

• Lease Dates: The leasehold title will always specify the start date and end date of the lease. These dates are significant because they determine the term of the lease.

Freehold Title (Fee Simple):

• Complete Ownership: With a freehold title, the property owner has full, permanent ownership of the land and any structures on it. This ownership is not limited by time, unlike a leasehold.

• No Expiry Date: A freehold title does not have an end date because the owner has an indefinite right to the land. The land remains with the owner unless they choose to sell or transfer it.

• Transferability: A freehold title can be sold, inherited, or transferred without the limitations that come with a leasehold title.

In summary:

• Leasehold: Rights to land for a limited term, with clear start and end dates.

• Freehold: Permanent ownership without an expiration date.

As a fellow Victorian landowner, I fully understand the reassurance that comes from knowing your property is secure. While my own title reads 'Estate Fee Simple' which gives me absolutely no concerns, I know many others are seeking clarity. I’ve helped numerous Victorian landowners gain peace of mind by obtaining clear, undeniable proof that their land was purchased under 'freehold,' regardless of the exact wording on their Certificates of Title. If you still have questions or want to strengthen your property rights, I’m here to provide guidance and practical solutions to ensure your confidence and security in your ownership.

It's time to stop focusing on problems, and start focusing on solutions. Feel free to contact me at info@landtitlehelp.com, or call or text me on 0421 617 232 for a free consultation.

Please note: The information in this article is general in nature and does not constitute legal advice.