A "reversion" is a future estate created by operation of law and which is to take effect in possession in favor of a lessor, transferor, grantor, or his heirs, distributees, devisees, or legatees, after a precedent particular estate which has been granted, demised, or devised, has terminated.
A reversion amounts to a vested estate, since the individual entitled to it has a fixed right to future enjoyment. A remainder may arise either from the failure to dispose of an ultimate interest or by reason of the failure of an attempted, but invalid, disposal of an ultimate interest.
The term "reversion" may be properly used to designate the estate left in the grantor, transferor, or his heirs during the continuance of a particular estate and also to refer to the residue left to the grantor, transferor, or his heirs after the determination of the particular estate. A lessor's estate, during the time that the outstanding leasehold estate exists and also the estate of the grantor of a life estate, do also constitute estates in reversion.
A reversion is distinguished from a remainder in that a reversion arises by operation of law while remainder is created by act of the parties. (See Remainders Sec. 17.28)
Reversions are freely alienable. They are also capable of descending upon intestate succession, or passing under a will.
An individual or entity entitled to an estate in reversion is known as a "reversioner".
Possibility Of Reverter
Right Of Re-Entry For Condition Broken
This right, also known as a "power of termination," originates when a grantor or transferor completely parts with a specified real estate interest, but with the provision that upon the breach of a condition subsequent, the grantor or transferor may retake the interest so transferred.
The "right of re-entry for condition broken" is of less value to any grantor or transferor than a "possibility of reverter." It is generally not alienable.
The judicial dislike of forfeitures and the ambiguous provisions in deeds or wills give the courts ample opportunities to interpret language, and thus, avoid a declaration of a forfeiture of an estate by finding:
- That the language in question is neither a condition nor a limitation, but is, rather, a covenant, or
- That if it is a condition, any breach of it, under the circumstances, has been waived.