Legal Definitions - Reversion

A reversion is a legal term for a future right to property that an original owner, known as the grantor, keeps for themselves. It means that when a temporary or limited ownership interest in a property ends, the property automatically returns to the grantor or their heirs.

Essentially, the grantor gives away property for a specific period or under certain conditions, but they retain a "future interest" that ensures the property will come back to them once that period or those conditions are over. This contrasts with a remainder, where the property goes to a third party instead of back to the original grantor.

• Example 1: Life Estate

  Imagine an elderly woman, Mrs. Chen, owns a house. She decides to grant her nephew, David, the right to live in and use the house for the rest of his life. However, she specifies that once David passes away, the house should come back to her or her estate.

  How it illustrates reversion: Mrs. Chen is the grantor. She has created a "life estate" for David. Her retained right to have the property return to her (or her heirs) after David's death is the reversion. She holds a future interest that will become a full ownership interest again at a later date.

• Example 2: Term of Years

  A commercial property owner, Mr. Lee, leases a storefront to a bakery for a fixed period of five years. The lease agreement clearly states that at the end of this five-year term, the bakery must vacate, and the property will return to Mr. Lee.

  How it illustrates reversion: Mr. Lee is the grantor. He has granted a "term of years" (the five-year lease) to the bakery. His right to regain full possession and control of the storefront once the five years are complete is a reversion. The property automatically reverts to him at the end of the specified term.

• Example 3: Conditional Grant

  A philanthropist, Ms. Rodriguez, donates a parcel of land to a local animal shelter, with the condition that the land must always be used exclusively for animal care facilities. If the shelter ever ceases to use the land for this specific purpose, the land will return to Ms. Rodriguez or her heirs.

  How it illustrates reversion: Ms. Rodriguez is the grantor. She has granted a conditional interest in the land. Her future right to reclaim the property if the animal shelter violates the specified condition (i.e., stops using it for animal care) is a form of reversionary interest. The property would revert to her if the condition is broken.