reversion

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Reversion

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.

Cross-references

Estate.

reversion

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

(Act of returning), noun about-face, recidivism, regress, regression, relapse, retroaction, retrocession, retrogradation, retrogression, retroversion, return, reversal, reverse, reverting, throwback, turnabout, turnaround

reversion

(Remainder of an estate), noun future innerest, future possession, hereditas, remainder over, residue, right of future enjoyment, right of future possession, right of succession
Associated concepts: equitable reversion, life estate, partial reversion, reversionary interest, right of reversion
See also: continuation, decline, defeasance, devolution, expiration, heritage, lapse, nollo prosequi, recidivism, reconversion, recovery, recrudescence, relapse, remainder, restitution, resumption, resurgence, reversal

reversion

an interest in an estate that reverts to the grantor or his heirs at the end of a period, such as at the end of the life of a grantee; or an estate so reverting.

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.

References in periodicals archive ?
Home reversion has existed for a long time in the form of private arrangements, for example, in France, Portugal, and Poland (Reifner et al., 2009b).
* What professional obligations do appraisers face if and when market expectations about reversions are contrary to the most probable outcome, and cannot be reconciled with imminent physical and legal circumstances?
In 2006, homeowners raised just over a billion - pounds 1,080.8m - by lifetime mortgages, and only pounds 73.5m by home reversion schemes.
Home reversion plans are not overseen by the regulator and anyone entering into such an agreement is taking a risk.
The second new appointment at the company is Sharne Mason whose role as Equity Release Administrator will focus on supporting customer relations and the delivery of an efficient application process within the home reversion business.
Home reversion plans have become popular with retired people wanting to boost their income by tapping into the booming property market.
The excise tax payable on reversions to the employer on the termination of a pension plan has been increased from 15 percent to either 20 percent or 50 percent, depending on the employer's course of action after the plan is terminated.
FASB also noted that the frequency of asset reversions were compelling evidence that excess plan assets belong to the employer.
Unfortunately, this 25% rule can make contingent reversions and powers of appointment prohibitive when a grantor reaches his mid-60s, just when such instruments are most needed.
With home reversions, owners are lucky if they sell a stake in their home for more than 55 per cent of its open market value, but they also get rent-free occupation of the property for as long as they wish.