reversion

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A concept in property law, reversion is a future interest in land.  A future interest in land is what the future rights holder possesses in real property. When the present rights holder ceases to hold control over the property, the future rights holder will then hold the right to that property. The future interest in land, however, may be forfeited or lost. For example, imagine a granting of land through a life estate. The life estate grants the estate holder the right to land throughout the lifetime of the estate holder. After the life of the estate holder ends, or if the life estate holder forfeits their right to land, then the right to the land will transfer to the future estate holder, generally by a reversion.

A reversion is the future interest in land that the original grantor keeps, provided that the grantor did not intend to give the future interest in land to a third party. 

Example: “From O to A for life.” Here, A gets the estate for their lifetime. O holds a future interest in land prior to A’s death as a reversion. After the end of A’s life, the right to the real property will return to O. However, a life estate is not the only type of future interest that a reversion follows. Currently, there are generally three ways of creating a reversion interest. The most popular way of creating a reversion is through a life estate. A reversion may also follow a fee tail estate and terms of years. Also, note that most jurisdictions in the United States limit the conditional reversion of land to less than 50 years.

The courts deem reversion as a specific property in itself. Therefore, the owner of the property interest through a reversion may sell or dispose of the right to another party. In addition, the reversion owner may receive reversion interest, and the present owner must also abide by the obligations arising from the real estate with respect to the reversion interest. For instance, the present interest owner has the obligation to reasonably protect that property from reduction of monetary value and deterioration of the land for the reversion interest owner. A reversion interest is an effective method for estate planning or when the original grantor wants to ensure that the rights to a real property stay within a family group.

See also: remainders.

[Last updated in May of 2024 by the Wex Definitions Team]