Legal Definitions - Possibility of reverter

A possibility of reverter is a legal right that allows the original owner of a property (known as the grantor) or their heirs to automatically reclaim that property if a specific condition, which was part of the original transfer, is no longer met. It is considered a "future interest" because the right to reclaim the property only becomes active at some point in the future, if and when the specified condition is violated.

Here are some examples to illustrate this concept:

• Example 1: Land for a Public Park

  Ms. Chen donates a plot of land to the City of Willow Creek with the deed stating that the land is granted "as long as it is used solely as a public park." If the City of Willow Creek later decides to sell the land to a developer to build a shopping mall, the condition would be violated. At that moment, the land would automatically revert to Ms. Chen or her heirs, because she retained a possibility of reverter when she made the original gift.

• Example 2: Building for a Community Center

  The Rodriguez family donates an old mansion to a local non-profit organization, specifying in the deed that the property is to be used "for so long as it serves as a community center for underprivileged youth." Years later, the non-profit faces financial difficulties and decides to convert the mansion into luxury apartments to generate income. Because the original grant included a possibility of reverter, the property would automatically return to the Rodriguez family's heirs once it ceases to be used as a community center for underprivileged youth.

• Example 3: Farm for Agricultural Research

  Mr. Davies grants his large farm to a state university "on the condition that it is continuously used for agricultural research." The university uses the farm for decades for various research projects. However, a new university administration decides to repurpose the land for a new sports complex, discontinuing all agricultural research. Due to the possibility of reverter held by Mr. Davies (or his descendants), the farm would automatically revert to his ownership or that of his heirs once the condition of continuous agricultural research is broken.