Any future interest kept by a person who transfers property to another.
A reversion occurs when a property owner makes an effective transfer of property to another but retains some future right to the property. For example, if Sara transfers a piece of property to Shane for life, Shane has the use of the property for the rest of his life. Upon his death, the property reverts, or goes back, to Sara, or if Sara has died, it goes to her heirs. Shane's interest in the property, in this example, is a life estate. Sara's ownership interest during Shane's life, and her right or the right of her heirs to take back the property upon Shane's death, are called reversionary interests.
A reversion differs from a remainder because a reversion arises through the operation of law rather than by act of the parties. A remainder is a future interest that is created in some person other than the grantor or transferor, whereas a reversion creates a future interest in the grantor or his or her heirs. If Sara's transfer had been "to Shane for life, then to Lily," Lily's interest would be a remainder.
n. in real property, the return to the grantor or his/her heirs of real property after all interests in the property given to others has terminated. Examples: George Generous deeded property to the local hospital district for "use for health facilities only," and the hospital is eventually torn down and the property is now vacant. The property reverts to George's descendants; George wills the property to his sister's children only, who later died without children. When the last grandchild dies the property reverts to George's descendants. Reversion is also called "reverter." (See: reverter)
REVERSION, estates. The residue of an estate left in the grantor, to
commence in possession after the determination of some particular estate
granted out by him; it is also defined to be the return of land to the
grantor, and his heirs, after the grant is over. Co. Litt. 142, b.
2. The reversion arises by operation of law, and not by deed or will,
and it is a vested interest or estate, and in this it differs from a
remainder, which can never be limited unless by either deed or devise. 2 Bl.
Comm. 175; Cruise, Dig. tit. 17; Plowd. 151; 4 Kent, Comm. 349; 19 Vin. Ab.
217; 4 Com. Dig. 27; 7 Com. Dig. 289: 1 Bro. Civil Law, 213 Wood's Inst. 151
2 Lill. Ab. 483. A reversion is said to be an incorporeal hereditament. Vide
4 Kent, Com. 354. See, generally, 1 Hill. Ab. c. 52, p. 418; 2 Bouv. Inst.
n. 1850, et seq.