Learning Outcomes
After reading this article, you will be able to define a reversion in real property law, identify when a reversion arises, distinguish reversions from other future interests, and apply these principles to MBE-style questions. You will also understand the rules on transfer, vesting, and the exam-relevant differences between reversions and other interests, ensuring you can answer MBE questions on this topic with confidence.
MBE Syllabus
For MBE, you are required to understand the rules governing future interests retained by a grantor. This article covers:
- Recognizing when a reversion arises in a conveyance of real property.
- Distinguishing reversions from possibilities of reverter and rights of entry.
- Understanding the transferability and vesting of reversions.
- Applying the rules to fact patterns involving life estates, terms of years, and defeasible fees.
- Identifying exam pitfalls and common misconceptions about reversions.
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.
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Which of the following best describes a reversion?
- (A) A future interest in a grantee that follows a life estate.
- (B) A future interest in the grantor that arises when a lesser estate is created but not all of the grantor’s interest is transferred.
- (C) A future interest in a third party that follows a fee simple determinable.
- (D) A present possessory interest held by the grantor.
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O conveys “to A for life.” What interest does O retain?
- (A) Possibility of reverter.
- (B) Right of entry.
- (C) Reversion.
- (D) Executory interest.
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Which of the following is true about reversions?
- (A) They are always contingent.
- (B) They are not transferable during life.
- (C) They are vested and freely transferable.
- (D) They are subject to the Rule Against Perpetuities.
Introduction
A reversion is a type of future interest in real property law that remains with the grantor after conveying a lesser estate than the grantor’s full interest. Understanding reversions is essential for MBE questions involving future interests, especially where the grantor does not transfer the entire fee simple. This article explains when a reversion arises, how it differs from other future interests, and how to apply these distinctions to MBE scenarios.
Key Term: Reversion A future interest retained by the grantor when a lesser estate (such as a life estate or term of years) is created, and the grantor does not convey the entire interest.
When Does a Reversion Arise?
A reversion arises automatically whenever a grantor transfers an estate of lesser duration than the one the grantor holds, and does not specify who takes the remaining interest. The most common examples are when the grantor conveys a life estate or a term of years but does not state who takes after that estate ends.
Key Term: Lesser Estate An estate that is shorter in duration than the grantor’s full fee simple, such as a life estate or a leasehold term.
Examples of Reversions
- O owns Blackacre in fee simple and conveys “to A for life.” O retains a reversion in fee simple.
- O conveys “to B for 20 years.” O retains a reversion in fee simple after the 20-year term.
A reversion does not arise if the grantor conveys the entire fee simple or if the future interest is expressly given to a third party (in which case the third party holds a remainder or executory interest).
Reversions vs. Other Future Interests
It is important to distinguish a reversion from other future interests:
- Possibility of Reverter: Arises when a fee simple determinable is created (“to A so long as…”), and the estate automatically ends upon a stated event.
- Right of Entry (Power of Termination): Arises when a fee simple subject to condition subsequent is created (“to A, but if…”), and the grantor must take action to reclaim the estate.
- Remainder: A future interest in a third party that follows a life estate or term of years.
- Executory Interest: A future interest in a third party that cuts short a prior estate.
Key Term: Possibility of Reverter A future interest retained by the grantor when a fee simple determinable is created, allowing automatic return of the estate upon a stated event.
Key Term: Right of Entry A future interest retained by the grantor when a fee simple subject to condition subsequent is created, requiring the grantor to take action to reclaim the estate.
Characteristics of Reversions
- Vested: A reversion is always vested in the grantor. It is not subject to any condition precedent.
- Transferable: Reversions can be transferred during life, by will, or by intestacy.
- Not subject to the Rule Against Perpetuities: Because a reversion is vested in the grantor, it is not subject to RAP.
Key Term: Vested Interest An interest that is certain to become possessory upon the expiration of the prior estate, with no condition precedent.
Creation and Transfer of Reversions
A reversion is created automatically by operation of law; no special words are needed. The grantor may transfer the reversion to another party by sale, gift, or will. The transferee then holds the reversion and will take possession when the prior estate ends.
Worked Example 1.1
O conveys Blackacre “to A for life.” What future interest does O have, and what happens when A dies?
Answer: O has a reversion in fee simple. When A dies, possession of Blackacre returns to O or O’s successors.
Worked Example 1.2
O conveys “to B for 10 years.” After 10 years, B remains in possession and O does nothing. Who has the right to possession?
Answer: O’s reversion becomes possessory at the end of the 10-year term. O (or O’s successors) has the right to immediate possession and may evict B if necessary.
Reversions and the Rule Against Perpetuities
A reversion is not subject to the Rule Against Perpetuities because it is vested in the grantor. This is a frequent exam point: only contingent remainders, executory interests, and some class gifts are subject to RAP.
Exam Warning
On the MBE, do not confuse a reversion (always vested in the grantor) with a remainder (always in a third party). Reversions are never contingent and never subject to RAP.
Summary Table: Reversions vs. Other Future Interests
| Interest Type | Held By | Arises When... | RAP Applies? |
|---|---|---|---|
| Reversion | Grantor | Lesser estate created, no third-party future interest | No |
| Possibility of Reverter | Grantor | Fee simple determinable created | No |
| Right of Entry | Grantor | Fee simple subject to condition subsequent | No |
| Remainder | Third party | Follows life estate or term of years | Yes (if contingent) |
| Executory Interest | Third party | Cuts short prior estate | Yes |
Key Point Checklist
This article has covered the following key knowledge points:
- A reversion is a future interest retained by the grantor when a lesser estate is created.
- Reversions arise automatically when the grantor does not transfer the entire fee simple and does not specify a third-party future interest.
- Reversions are always vested, freely transferable, and not subject to the Rule Against Perpetuities.
- Reversions are distinct from possibilities of reverter, rights of entry, remainders, and executory interests.
- On the MBE, always check who holds the future interest and whether the grantor has conveyed the entire fee simple.
Key Terms and Concepts
- Reversion
- Lesser Estate
- Possibility of Reverter
- Right of Entry
- Vested Interest
