3. The Reversion

We encountered the reversion once before, when discussing leases as an introduction to the concept of a future interest. But reversions often arise in non-leasehold contexts too. Consider what happens when A, owning a life estate in Blackacre, dies. A’s life estate terminates by operation of law; it simply ceases to exist and disappears. Who “owns” Blackacre now? It seems obvious that somebody must have a right to possession of the land, but it seems equally obvious that whoever that somebody is, they had no right to possession before A died. Whoever they are, during the term of A’s life estate they must have held an interest that would entitle them to take possession at some point in the future (that is, a future interest).

There are two candidates for such an interest. We will begin with the most basic: the reversion. Suppose that O, owning a fee simple absolute in Blackacre, conveys Blackacre “to A for life,” and says nothing more? What is the legal effect of this grant?

Based on the formula we just learned, it should be clear that A receives a life estate in Blackacre. But what other effects does the grant have on the legal rights of the parties? Think about the interest O held prior to the conveyance: the fee simple absolute. Remember that a fee simple absolute is an interest of infinite duration—it never ends. So when O starts with a possessory interest of infinite duration, and then gives away a life estate—whose duration is limited by a human lifespan—to A, something was left over. Specifically, O never gave away the right to possession of Blackacre from the day of A’s death to the end of time. Whether meaning to or not, O gave away less of an interest in Blackacre than what he owned, meaning he still holds some interest. We call this type of interest—the residual interest left over when a grantor gives away less than they have—a retained interest.

This retained interest can’t entitle O to possession during A’s life—A has the exclusive right to possession as the life tenant. So O’s interest must be a future interest during the term of A’s life estate: an interest that will entitle O to possession after the natural termination of the life estate. As we discussed in the example of the lease, we call this kind of future interest a reversion. It is a retained interest in the grantor—created when a grantor conveys less than his entire interest—that will become possessory by operation of law upon the natural termination of the preceding estate. Colloquially, we say that Blackacre “reverts” to O. In some opinions, you will see the holder of a reversion referred to as a “reversioner.”

A reversion can of course also be created explicitly, for example, if O conveys Blackacre “to A for life, then to O.” In this case, O has explicitly created a life estate in A followed by a reversion in O.