Ownership of real property - Possibilities of reverter, powe...

Learning Outcomes

This article explains how possibilities of reverter and powers of termination operate in ownership of real property for MBE purposes, including:

• Identifying and contrasting fee simple determinable and fee simple subject to condition subsequent based on grant language;
• Distinguishing possibilities of reverter, powers of termination/right of entry, reversions, and executory interests, and correctly locating each in the grantor or a third party;
• Determining when these future interests become possessory and how that timing affects statutes of limitation, laches, and adverse possession;
• Analyzing transferability, devisability, and inheritability rules for possibilities of reverter and rights of entry under the MBE’s default majority approach;
• Applying these doctrines to exam-style fact patterns that feature long delays, mixed or ambiguous drafting, third-party interests, and attempted restraints on alienation;
• Recognizing when the Rule Against Perpetuities is inapplicable because the interest is held by the grantor and when RAP instead targets an executory interest or contingent remainder;
• Spotting typical bar-exam traps, such as mislabeling executory interests as grantor interests or mis-timing when adverse possession begins to run.

MBE Syllabus

For the MBE, you are required to understand the rules governing defeasible estates and related future interests with a focus on the following syllabus points:

• Recognizing fee simple determinable and fee simple subject to condition subsequent from grant language.
• Identifying the possibility of reverter and the power of termination/right of entry as future interests in the grantor.
• Distinguishing these grantor interests from executory interests in third parties.
• Understanding transferability rules and statutory or equitable limits on enforcement (e.g., statutes of limitation, laches, and statutory time caps).
• Applying these doctrines to exam-style problems involving long delays, ambiguous wording, and adverse possession.
• Knowing that the Rule Against Perpetuities does not apply to grantor-held future interests (possibility of reverter, right of entry, and reversion).

Test Your Knowledge

Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.

1. Which future interest follows a fee simple determinable?
   1. Right of entry
   2. Possibility of reverter
   3. Executory interest
   4. Contingent remainder
2. A grant reads: “to A and her heirs, but if the land is not used as a park, O may re-enter and reclaim the land.” What future interest does O hold?
   1. Possibility of reverter
   2. Right of entry (power of termination)
   3. Contingent remainder
   4. Executory interest
3. Which of the following is TRUE regarding the transferability of a right of entry (power of termination) in most states for MBE purposes?
   1. It is always freely transferable inter vivos.
   2. It is never inheritable.
   3. It is not transferable inter vivos in most states, but is inheritable and devisable.
   4. It is only transferable to a third party by will.
4. O conveys “to the City so long as the premises are used as a park.” The City builds a park, then 30 years later sells the land to D, who builds a shopping mall. When does the statute of limitations for O’s ejectment action against D start to run (assuming a fee simple determinable)?
   1. On the date of O’s original conveyance to the City
   2. When the City first built the park
   3. When D built the shopping mall
   4. Only when O first files suit
5. O conveys “to the School for school purposes only, but if it ceases to be so used, O reserves the right to re-enter.” The School later builds a supermarket on the land. How is the estate best classified?
   1. Fee simple determinable with a possibility of reverter in O
   2. Fee simple subject to condition subsequent with a right of entry in O
   3. Fee simple subject to executory limitation with an executory interest in O
   4. Fee simple absolute because the condition is void as repugnant to the fee

Introduction

Defeasible fees are fee simple estates that can terminate before their natural end if a specified event occurs (or fails to occur). Whenever a defeasible fee is created, someone—usually the grantor—holds a future interest that will or may become possessory if the condition is triggered. For MBE purposes, the two grantor-held interests you must be fluent with are the possibility of reverter and the power of termination (also called a right of entry).

Key Term: Defeasible Fee
A fee simple estate that may terminate upon the occurrence (or nonoccurrence) of a specified event, creating a corresponding future interest in either the grantor or a third party.

Defeasible Fees and Their Associated Future Interests

There are three commonly tested defeasible fee estates, but only two are paired with the interests discussed in this article:

• Fee simple determinable → followed by a possibility of reverter in the grantor.
• Fee simple subject to condition subsequent → followed by a power of termination (right of entry) in the grantor.
• Fee simple subject to executory limitation → followed by an executory interest in a third party (important to contrast, but not a grantor interest).

Key Term: Fee Simple Determinable
A fee simple estate that automatically ends and reverts to the grantor upon the happening of a stated event, typically created by durational language such as “so long as,” “while,” “during,” or “until.”

Key Term: Fee Simple Subject to Condition Subsequent
A fee simple estate that does not end automatically on the happening of the condition but gives the grantor the right to terminate the estate by exercising a right of entry, usually created by conditional language such as “but if,” “provided that,” or “on condition that,” plus words reserving a right to re-enter.

Key Term: Fee Simple Subject to Executory Limitation
A defeasible fee that, upon breach of the condition, does not revert to the grantor but instead passes to a third party holding an executory interest.

Key Term: Possibility of Reverter
A future interest retained by the grantor following a fee simple determinable, under which the estate automatically reverts to the grantor when the stated event occurs.

Key Term: Power of Termination (Right of Entry)
A future interest retained by the grantor following a fee simple subject to condition subsequent, giving the grantor the option—but not the obligation—to terminate the grantee’s estate if the condition occurs.

Key Term: Condition Subsequent
A condition that, if it occurs, gives the grantor the right to cut short the grantee’s estate, but does not end the estate automatically.

Key Term: Executory Interest
A future interest in a transferee (someone other than the grantor) that cuts short a prior estate or divests the grantor, following a defeasible fee subject to executory limitation.

Key Term: Reversion
A future interest in the grantor that arises when the grantor transfers an estate of lesser quantum than the grantor started with, and no special future interest (like a remainder or possibility of reverter) has been created.

The core exam skill is matching (1) the operative language in the grant to (2) the type of defeasible fee, and then to (3) the correct future interest in the grantor.

Grant Language and Creation

Fee Simple Determinable + Possibility of Reverter

• Triggering language: durational—“so long as,” “while,” “during,” “until,” often followed by words like “and if not, then to O.”
• Effect: when the stated event happens, the estate ends automatically; the grantor (or the grantor’s successors) immediately has a present possessory estate.

Example formulation:

• “O conveys Blackacre to the City so long as it is used as a library.”
  • Present estate: City holds a fee simple determinable.
  • Future interest: O holds a possibility of reverter.

In many exams, the possibility of reverter is not named; you identify it from the fact that the grant uses durational language and the property “reverts” automatically on breach.

Fee Simple Subject to Condition Subsequent + Right of Entry

• Triggering language: conditional—“but if,” “provided that,” “on condition that,” plus express reservation of a right to re-enter or reclaim.
• Effect: when the condition occurs, the estate does not end automatically; the grantor must take affirmative steps (entry or suit) to terminate the grantee’s estate.

Example formulation:

• “O conveys Greenacre to A and her heirs, but if alcohol is ever sold on the premises, O may re-enter and reclaim the land.”
  • Present estate: A holds a fee simple subject to condition subsequent.
  • Future interest: O holds a right of entry (power of termination).

If the grant uses conditional language but does not reserve a right of entry, courts are divided and examiners may ask you to pick the more likely construction: most modern courts either (i) still find a fee simple subject to condition subsequent and imply a right of entry, or (ii) construe the language as merely creating a covenant. On the MBE, if the question is about defeasible fees and there is conditional language, assume a fee simple subject to condition subsequent unless the grant clearly uses durational words and automatic reversion language.

Fee Simple Subject to Executory Limitation

A third pattern puts the future interest in someone other than the grantor.

Example:

• “O conveys to A so long as the land is used as a church, then to B.”

Here:

• A has a fee simple subject to executory limitation.
• B has a shifting executory interest.
• O has no future interest; neither a possibility of reverter nor a right of entry exists.

On the MBE, if the future interest is in anyone other than the grantor, it is an executory interest, not a possibility of reverter or right of entry.

Exam Preference Against Automatic Forfeiture

Courts generally dislike forfeitures of estates. When language is ambiguous, they prefer to interpret a grant as creating a fee simple subject to condition subsequent rather than a fee simple determinable.

So if a grant mixes durational and conditional language:

• “to the School for school purposes only, and if the property is not so used, O may re-enter and take possession.”

The explicit “may re-enter” language points to a condition subsequent, even though “for school purposes only” sounds durational.

Future Interests: Possibility of Reverter vs. Power of Termination

Although both are future interests in the grantor, they behave differently.

Possibility of Reverter

• Holder: grantor (or grantor’s successors in interest).
• Trigger: occurrence (or nonoccurrence) of the specified durational event.
• Effect: the grantee’s estate terminates automatically, and the grantor’s possibility of reverter becomes a present possessory estate at that moment.
• Transferability (modern majority / MBE): freely transferable inter vivos and by will; always inheritable.

At early common law, possibilities of reverter were not freely transferable inter vivos. Modern statutes and case law have changed that in most jurisdictions. For the MBE, treat them as transferable during life and at death unless the question expressly states an older rule.

Because the estate ends automatically, the grantor never needs to “exercise” the interest—title shifts back by operation of law.

Power of Termination (Right of Entry)

• Holder: grantor (or grantor’s successors).
• Trigger: occurrence (or nonoccurrence) of the specified condition subsequent.
• Effect: the grantee’s estate continues until the grantor affirmatively exercises the right of entry (e.g., by bringing an ejectment or quiet title action).
• Transferability (MBE default rule): not transferable inter vivos in most states (traditional rule), but inheritable and devisable.

Because a right of entry is merely a power to terminate someone else’s estate, courts historically treated it as a personal power rather than a freely alienable property interest. Many modern statutes now permit inter vivos transfers; however, on the MBE you should assume:

• The right of entry can pass at death (by will or intestacy).
• It is not transferable by deed during life in the majority-rule jurisdiction, unless the question tells you otherwise.

Key Term: Laches
An equitable doctrine that bars a claim when the claimant has unreasonably delayed in asserting it and the delay has prejudiced the defendant.

Rule Against Perpetuities and Grantor Interests

The Rule Against Perpetuities does not apply to future interests held by the grantor. That includes:

• Possibility of reverter
• Right of entry (power of termination)
• Reversion

It does apply to certain future interests in transferees, such as executory interests and contingent remainders. On MBE questions, if you are asked whether a possibility of reverter or right of entry violates the Rule Against Perpetuities, the correct answer is no.

Statutes of Limitations, Adverse Possession, and Laches

Key Term: Adverse Possession
A method of acquiring title to land by open, notorious, exclusive, adverse, and continuous possession for the statutory period.

The interaction between defeasible fees and timing doctrines is a frequent MBE trap.

General Point About Future Interests and Adverse Possession

As a baseline rule, the statute of limitations does not run against the holder of a future interest (like a remainder or a reversion) until that interest becomes possessory. Until then, the future interest holder has no right to immediate possession and no cause of action to eject someone in possession.

That general approach is modified slightly for possibilities of reverter and rights of entry.

Fee Simple Determinable and Statute of Limitations

Under a fee simple determinable:

• When the condition is breached, the grantee’s estate ends immediately.
• At that moment, the grantor’s possibility of reverter becomes a present possessory estate.
• From that moment, the grantor has a cause of action to recover possession (ejectment, quiet title, etc.).
• The applicable statute of limitations for recovery of land starts running when the breach occurs.

If the grantor fails to sue within the statutory period and the former grantee (or successors) remains in open, notorious, continuous, and adverse possession, the former grantee can acquire title by adverse possession—even though their estate technically ended at the breach.

This is exactly how Barbri’s example is structured: once the condition is violated, the adverse possessor is holding against the grantor’s now-possessory title, and time runs.

Fee Simple Subject to Condition Subsequent and Statute of Limitations

Under a fee simple subject to condition subsequent:

• When the condition occurs, the grantee’s estate does not end; the grantor receives only a right to terminate.
• The grantee’s possession remains rightful until the grantor actually exercises that power.
• Because the grantor has no immediate right to possession until they elect to terminate, many courts hold that the ordinary adverse possession statute does not begin to run from the date of the breach.

However, courts do not want very old, unasserted rights of entry hanging over titles forever. To avoid that:

• Many courts require the grantor to exercise the right of entry within a reasonable time after the condition is broken.
• If the grantor delays unreasonably and the delay prejudices the current possessor, the claim may be barred by laches.
• To determine “reasonable time,” many courts look by analogy to the local ejectment or quiet title statute of limitations, but treat the bar as equitable (laches) rather than strictly legal.

On the MBE, unless a statute is quoted, assume:

• For a possibility of reverter: ordinary statute of limitations for recovery of real property begins to run on breach.
• For a right of entry: mere passage of time does not automatically extinguish the right; only facts suggesting unreasonable delay and prejudice raise a serious laches issue.

Statutory Limits and Re-recording

Some states have enacted statutes that:

• Require holders of possibilities of reverter and rights of entry to re-record these interests periodically; or
• Cut them off if the condition is not exercised within a fixed period (e.g., 30 years) after breach, regardless of laches.

If an MBE question gives you such a statute, apply it as written. If not, use the common-law principles summarized above.

Worked Example 1.1

O conveys Blackacre “to the City so long as it is used as a library.” Ten years later, the City closes the library and uses Blackacre as a parking lot. Who owns Blackacre?

Answer:
Because the grant created a fee simple determinable, the estate ended automatically when the land stopped being used as a library. At that moment, O’s possibility of reverter became a present possessory fee simple. O (or O’s successors) now owns Blackacre. The City is in possession without title and could become an adverse possessor if O does nothing for the statutory period.

Worked Example 1.2

O conveys Greenacre “to A and her heirs, but if alcohol is ever sold on the premises, O may re-enter and reclaim the land.” Five years later, A opens a bar. O does nothing for 20 years. Who owns Greenacre?

Answer:
A continues to hold Greenacre in fee simple subject to condition subsequent because the condition does not cause automatic forfeiture. O has a right of entry and may still terminate A’s estate unless (i) a state statute or (ii) laches bars enforcement. On MBE facts, in the absence of a specific statute or clear prejudice from delay, assume that mere inaction does not extinguish the right of entry.

Ambiguous and Mixed Language Grants

Many exam questions turn on how you classify a grant that mixes durational and conditional language.

• If the grant clearly states that the estate ends automatically on breach, treat it as a fee simple determinable with a possibility of reverter.
• If the grant uses conditional language and reserves a right to re-enter, treat it as a fee simple subject to condition subsequent, even if some durational words appear elsewhere.
• Where the language is truly ambiguous and does not clearly specify automatic termination, most courts construe the grant as a fee simple subject to condition subsequent to avoid automatic forfeiture.

Worked Example 1.3

O conveys “to the School for school purposes only, and if the property is not so used, O may re-enter and take possession.”

What estate does the School hold, and what future interest does O hold?

Answer:
The School holds a fee simple subject to condition subsequent because the grant reserves to O the right to re-enter upon breach. O holds a right of entry (power of termination), not a possibility of reverter. The phrase “for school purposes only” is durational but is outweighed by the explicit “may re-enter” clause.

Worked Example 1.4

O conveys “to A and her heirs so long as the premises are not used for commercial purposes.”

A builds a home and lives there for several years. A then sells to B, who opens a restaurant on the land. O learns of this 12 years later. The statute of limitations for actions to recover land is 10 years. Who owns Blackacre?

Answer:
A (and then B) held a fee simple determinable; O retained a possibility of reverter. When B began using the land for commercial purposes, the determinable estate ended automatically and O’s possibility of reverter became possessory. B’s continued possession after that point was adverse to O. Because O waited more than 10 years, O’s claim is time-barred and B has acquired title by adverse possession.

Additional Classification Traps

Mere Purpose Language vs. Defeasible Fee

Sometimes grants say:

• “to the City for the purpose of operating a park”
• “to the School to be used as a school”

Without more, many courts treat these as statements of motive or purpose, not as conditions creating defeasible fees. On an MBE question, you should look for:

• Clear durational/conditional words; and
• A clear remedy (revert, re-enter, go to X).

If the grant only states a purpose and nothing about forfeiture or reversion, it is safest to classify the estate as a fee simple absolute with a possibly enforceable covenant, not a defeasible fee.

Condition vs. Covenant

The same language may support both:

• A condition (failure triggers loss of title), or
• A covenant (failure leads only to damages or injunction).

Courts prefer to interpret doubtful language as creating covenants rather than forfeitures. On the MBE, if the question asks specifically about “what future interest was created?” and the language is marginal, they expect you to classify it as a defeasible fee when the examiners have built the hypo that way; but in close real-world cases, many courts would avoid forfeiture.

Enforcement, Public Policy, and Repugnancy

Some attempted conditions are invalid:

• A total restraint on alienation (“to A in fee simple, but A may never sell or transfer”) is usually void as repugnant to the fee. A still takes a fee simple absolute.
• Conditions that encourage divorce or impose certain discriminatory restrictions may be void as against public policy. In those cases, the offending condition is struck and the grantee typically keeps a fee simple absolute.

In both situations, the attempted future interest in the grantor (or in a third party) fails.

Worked Example 1.5

O conveys “to A and her heirs, but if A ever attempts to sell Blackacre, O may re-enter and reclaim the land.”

What estate does A hold and what is the effect of the restraint?

Answer:
A appears to hold a fee simple subject to condition subsequent with a right of entry in O. However, the condition is an invalid total restraint on alienation of a fee simple. Courts will strike the restraint as repugnant to the fee and leave A with a fee simple absolute. O’s purported right of entry is void.

Transferability of Grantor’s Future Interests

For exam purposes, apply these default rules (unless the question supplies different state law):

• Possibility of reverter:

  • Freely transferable inter vivos.
  • Devisable by will.
  • Inheritable.

• Right of entry (power of termination):

  • Not transferable inter vivos in most states (traditional rule).
  • Devisable by will and inheritable.

Even in jurisdictions banning inter vivos transfer of rights of entry, assignment attempts typically do not void the interest; instead, the transferee may act as the grantor’s agent, or the attempted transfer may simply be ineffective. For MBE purposes, focus on who currently holds the interest, not on subtle agency theories, unless the fact pattern clearly raises them.

Adverse Possession and Future Interests Held by the Grantor

Barbri summarizes the key timing rules this way:

• For a possibility of reverter, the statute of limitations starts running when the event happens and the estate automatically ends.
• For a right of entry, the event alone does not start the statute, because the grantee’s possession is not wrongful until the grantor acts. Instead, courts apply laches based on “reasonable time.”

These rules are layered on top of the general principle that the statute does not run against future interest holders until they are entitled to possession.

Worked Example 1.6

O conveys “to A so long as the land is used as a farm, then to B.”

Five years later, A stops farming and builds a factory on the land. O does nothing. B sues A to eject him. Does B have a valid claim?

Answer:
A has a fee simple subject to executory limitation; B holds a shifting executory interest. When A stopped using the land as a farm, A’s estate did not revert to O but shifted automatically to B. O has no possibility of reverter or right of entry. B now has a present fee simple and can successfully eject A.

This example reinforces that grantor interests are not present when the future interest is placed in a third party.

Worked Example 1.7

O conveys “to A and her heirs so long as the land is used as a park, and if it ever ceases to be so used in the next 100 years, then to B and her heirs.”

Is there any Rule Against Perpetuities problem with O’s retained interests?

Answer:
No. O retains no future interest; all future interests are in A and B. The executory interest in B must satisfy the Rule Against Perpetuities (it could fail if the condition might occur later than a life in being plus 21 years), but there is no RAP issue for any grantor interest because the grantor has none. If O had kept a possibility of reverter or right of entry, RAP would still not apply to those grantor interests.

Worked Example 1.8

O owns Blackacre in fee simple. In 2000, O conveys “to A and her heirs so long as the premises are used as a residence.” In 2010, A opens a store on the land and operates it continuously. In 2025, after the 15-year statute of limitations has run, O dies, devising all property to X. X brings an ejectment action against A. Who prevails?

Answer:
A took a fee simple determinable; O retained a possibility of reverter that became possessory in 2010 when A stopped using the land as a residence. From 2010 onward, A’s possession was adverse to O. Because O (and then X) failed to bring an action within the 15-year statutory period, A has acquired title by adverse possession. X’s ejectment action fails.

Worked Example 1.9

In 1980, O conveys “to the City, but if liquor is ever sold on the premises, O may re-enter.” In 1985, the City begins selling liquor at City-owned stadium concessions. O dies in 1990 leaving his entire estate to D. In 2025, D sues the City to recover the land. There is no statute specifically governing rights of entry, and the general statute of limitations for recovery of land is 20 years. Who is more likely to prevail?

Answer:
The City took a fee simple subject to condition subsequent; O retained a right of entry that passed to D at O’s death. The City began selling liquor in 1985. Because there is no automatic forfeiture and the statute of limitations does not ordinarily run against a right of entry, D’s claim is not automatically barred by the 20-year statute. However, a court may apply laches if D’s 40-year delay is unreasonable and the City has substantially relied on continued ownership. On a typical MBE question, absent specific facts about prejudice, expect the examiners either (i) to assume the right of entry still exists, or (ii) to tell you that laches bars the claim.

Worked Example 1.10

O conveys “to A and her heirs, on the condition that the premises are never used for religious purposes, and if they are, O shall have the right to re-enter and retake the land.”

Twenty years later, A allows a small religious group to use the property for weekly services. O sues to terminate A’s estate. The jurisdiction has a strong public policy against religious discrimination. What is the likely result?

Answer:
The grant purports to create a fee simple subject to condition subsequent with a right of entry in O, but the condition is discriminatory and likely invalid as against public policy. Courts strike the condition and give A a fee simple absolute. O’s right of entry fails with the invalid condition.

Key Point Checklist

This article has covered the following key knowledge points:

• Defeasible fees are fee simple estates that may end when a specified event occurs (or fails to occur).
• A fee simple determinable uses durational language; it ends automatically on breach and is followed by a possibility of reverter in the grantor.
• A fee simple subject to condition subsequent uses conditional language plus an express right of entry; it does not end automatically and is followed by a power of termination (right of entry) in the grantor.
• If the language is ambiguous, courts prefer to construe the grant as a fee simple subject to condition subsequent to avoid automatic forfeiture.
• A future interest in a third party after a defeasible fee is an executory interest, not a possibility of reverter or right of entry.
• Possibilities of reverter and rights of entry are future interests in the grantor and are not subject to the Rule Against Perpetuities.
• A possibility of reverter becomes possessory automatically on breach; the statute of limitations for actions to recover land then runs from the breach, and adverse possession can extinguish the grantor’s title.
• A right of entry requires affirmative action by the grantor; statutes of limitation generally do not run from the breach, but laches can bar stale claims when grantors delay unreasonably and the delay prejudices the current possessor.
• For MBE purposes, a possibility of reverter is generally freely transferable inter vivos, devisable, and inheritable; a right of entry is inheritable and devisable but usually not transferable inter vivos.
• Conditions that are repugnant to the fee simple (e.g., total restraints on alienation) or violate public policy are struck, typically leaving the grantee with a fee simple absolute and destroying any associated grantor future interest.
• When you confront a defeasible fee question, ask:
  • Does the estate end automatically on breach (determinable) or only if the grantor acts (condition subsequent)?
  • Is the future interest in the grantor (possibility of reverter/right of entry) or in a third party (executory interest)?
  • Has enough time passed—with adverse possession or prejudicial delay—for statutes of limitation or laches to cut off the grantor’s rights?

Key Terms and Concepts

• Defeasible Fee
• Fee Simple Determinable
• Fee Simple Subject to Condition Subsequent
• Fee Simple Subject to Executory Limitation
• Possibility of Reverter
• Power of Termination (Right of Entry)
• Condition Subsequent
• Executory Interest
• Reversion
• Adverse Possession
• Laches