A reversion in

property law Property law is the area of law that governs the various forms of ownership in real property (land) and personal property. Property refers to legally protected claims to resources, such as land and personal property, including intellectual pro ...

is a

future interest In property law and real estate, a future interest is a legal right to property ownership that does not include the right to present possession or enjoyment of the property. Future interests are created on the formation of a defeasible estate; t ...

that is retained by the grantor after the conveyance of an estate of a lesser quantum that he has (such as the owner of a

fee simple In English law, a fee simple or fee simple absolute is an estate in land, a form of freehold ownership. A "fee" is a vested, inheritable, present possessory interest in land. A "fee simple" is real property held without limit of time (i.e., pe ...

granting a

life estate In common law and statutory law, a life estate (or life tenancy) is the ownership of immovable property for the duration of a person's life. In legal terms, it is an estate in real property that ends at death when ownership of the property may ...

or a

leasehold estate A leasehold estate is an ownership of a temporary right to hold land or property in which a lessee or a tenant holds rights of real property by some form of title from a lessor or landlord. Although a tenant does hold rights to real property ...

). Once the lesser estate comes to an end (the lease expires or the life estate tenant dies), the property automatically reverts (hence ''reversion'') back to the grantor. A reversion interest is logically similar, but not legally identical, to the rights retained by someone who lends his property to another for a limited time. Although the

bailee Bailment is a legal relationship in common law, where the owner transfers physical possession of personal property ("chattel") for a time, but retains ownership. The owner who surrenders custody to a property is called the "bailor" and the in ...

has the right to possess the property during the limited duration, these rights are neither permanent nor exclusive. When the time comes, the property rights of possession will terminate and return to the holder of the reversion. Reversions are commonly created in

real property In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, is land which is the property of some person and all structures (also called improvements or fixtures) integrated with or aff ...

transactions, particularly during

lease A lease is a contractual arrangement calling for the user (referred to as the ''lessee'') to pay the owner (referred to as the ''lessor'') for the use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial ...

arrangements as well as devise (the transfer of real property through a

will Will may refer to: Common meanings * Will and testament, instructions for the disposition of one's property after death * Will (philosophy), or willpower * Will (sociology) * Will, volition (psychology) * Will, a modal verb - see Shall and wi ...

). In the context of a will, a

testator A testator () is a person who has written and executed a last will and testament that is in effect at the time of their death. It is any "person who makes a will."Gordon Brown, ''Administration of Wills, Trusts, and Estates'', 3d ed. (2003), p. 556 ...

may devise a simple life estate to a devisee. The

may retain the reversion in the estate or give it to another individual. The owner of the life estate will retain ownership of the property during the devisee's life, and may freely alienate this interest. However, upon the death of the devisee the life estate will terminate and ownership of the real property will fully vest in the holder of the reversion. A

tenancy for years A lease is a contractual arrangement calling for the user (referred to as the ''lessee'') to pay the owner (referred to as the ''lessor'') for the use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial ...

is a simple illustration of a reversion interest in the context of leasing arrangements. An owner of real property becomes a lessor by transferring a

bundle of rights The bundle of rights is a metaphor to explain the complexities of property ownership. Law school professors of introductory property law courses frequently use this conceptualization to describe "full" property ownership as a partition of var ...

– including a

right of entry Right of entry refers to one's right to take or resume possession of land, or the right of a person to go onto another's real property without committing trespass. It also refers to a grantor's power to retake real estate from a grantee A grant ...

– to the lessee for a certain period of time. The lessor typically retains a reversion interest in the property which will mature after the lease expires. A common example of this transaction is the leasing of an apartment to a tenant for a one-year period. When the lease expires, the rights of the lessee are terminated and exclusive ownership of the property returns to the lessor. (In most jurisdictions today, tenants' rights legislation has made the practical picture more complicated). Reversion should not be confused with the

possibility of reverter In property law and real estate, a future interest is a legal right to property ownership that does not include the right to present possession or enjoyment of the property. Future interests are created on the formation of a defeasible estate; ...

created in the grant of a fee simple determinable. Although both result in the return of the land to the original grantor or his heirs, reversions occur upon the natural expiration of the grantee's estate, while the possibility of reverter actively ends the grantee's otherwise-indefinite estate as a consequence of the grantee's failure to comply with the condition contained in the grant. Unlike some other future interests, reversions have always been fully alienable ('sellable').

References

Property law {{law-term-stub