Also known as: remainder · remainders · remainder interest
Written by attorneys — see sources below.
2 senses
A future interest that remains in the grantor or the grantor's successors and becomes possessory upon the natural expiration of a prior estate of limited duration such as a life estate.
A future interest created in a transferee that becomes possessory upon the natural expiration of a prior estate of limited duration such as a life estate.
A future interest that remains in the grantor or the grantor's successors and becomes possessory upon the natural expiration of a prior estate of limited duration such as a life estate.
Ravi Reddy conveyed Blackacre to his sister for life with no further disposition stated in the deed. Upon the sister's death the property returns to Ravi or his heirs because he retained the future interest. The court recognizes this retained interest as a reversion that follows the natural end of the life estate.
Roger Ramirez conveyed land to his nephew for life so long as the nephew uses it for farming. The deed is silent on what follows the life estate. Roger retains a reversion that will become possessory when the life estate ends by the nephew's death or by breach of the use limitation.
A future interest created in a transferee that becomes possessory upon the natural expiration of a prior estate of limited duration such as a life estate.
Roland Rhodes devised his farm to his wife for life and then to their daughter. The daughter holds a remainder that becomes possessory only after the wife's life estate ends. The court confirms the daughter's interest is a remainder rather than a reversion because it was created in a transferee.
Riley Rivera granted her cabin to her brother for life and then to her niece in fee simple. The niece's remainder is vested because she is ascertained and no condition precedent remains. The interest follows the life estate and becomes possessory upon the brother's death.
Each sense below has its own examples, sources, and questions.
In December 1973, the Public Service Commission ordered electric utilities in New York State to cease all advertising that promoted the use of electricity because the interconnected utility system lacked sufficient fuel stocks for the 1973-1974 winter. The order rested on the Commission's finding that the system did not have sufficient fuel stocks or sources of supply to meet customer demands. Three years later, when the fuel shortage had eased, the Commission requested comments from the public on its proposal to continue the ban on promotional advertising. Central Hudson Gas & Electric Corp. opposed the ban on First Amendment grounds. After reviewing the public comments, the Commission extended the prohibition in a Policy Statement issued on February 25, 1977. The Policy Statement divided advertising expenses into promotional and institutional categories. It permitted informational advertising designed to encourage shifts of consumption from peak demand times to periods of low electricity demand. The Commission banned promotional advertising because additional electricity would be more expensive to produce and promotional advertising would give misleading signals to the public. Central Hudson challenged the order in state court. The order was upheld through the New York Court of Appeals. The Supreme Court noted probable jurisdiction and reversed.
View caseRonald Reed conveyed a warehouse to his friend for life with no further words of disposition. Upon the friend's death the warehouse returns to Ronald's estate because he retained a reversion. Ronald's heirs take the reversion by operation of law when it becomes possessory.
Congress enacted the District of Columbia Redevelopment Act of 1945, which made legislative findings regarding substandard housing and blighted areas in the District and declared the acquisition of property for redevelopment to be a public use. The Act created the District of Columbia Redevelopment Land Agency with power to acquire property by eminent domain. It also directed the National Capital Planning Commission to develop a comprehensive plan and specific project plans subject to approval by the District Commissioners. The initial project under the Act concerned Project Area B in Southwest Washington, D.C. Surveys conducted in connection with the 1950 comprehensive plan revealed that 64.3% of dwellings in the area were beyond repair, 18.4% needed major repairs, and only 17.3% were satisfactory. Many dwellings lacked basic amenities, including outside toilets in 57.8% of units, no baths in 60.3%, no electricity in 29.3%, no wash basins or laundry tubs in 82.2%, and no central heating in 83.8%. The area had a population of 5,012 persons, 97.5% of whom were Negroes. The redevelopment plan for Area B specified land uses and required that at least one-third of new dwelling units be low-rent housing at a maximum of $17 per room per month. Following a public hearing, the District Commissioners approved the plan, and the Planning Commission certified it to the Agency for execution. The Agency began preliminary steps to redevelop the area. Appellants owned a department store at 712 Fourth Street, S.W., in Area B. Their property was commercial and not used for habitation. They brought suit in the District Court to enjoin the condemnation of their property under the Act. A three-judge District Court dismissed the complaint in Schneider v. District of Columbia, 117 F. Supp. 705. The case reached the Supreme Court on direct appeal under 28 U.S.C. § 1253.
View case3 common questions
A reversion is a future interest retained by the grantor or the grantor's successors that follows the natural expiration of a prior estate. A remainder is a future interest created in a third-party transferee that follows the same prior estate. The key distinction is whether the future interest stays with the transferor or passes to someone else.
Supporting sources
A possibility of reverter follows a defeasible fee and becomes possessory automatically upon breach of a condition. A reversion follows the natural end of a life estate or term of years without any condition that must be breached. The deed language determines which interest arises.
Supporting sources
In jurisdictions that still recognize fee tails and dower, the surviving spouse receives a dower-like life estate that burdens the reversion once it becomes possessory. The dower interest continues against the holders of the reversion rather than defeating it entirely.
Supporting sources
Rebecca Ross devised her home to her son for life and then to the son's children who survive him. The son's living child holds a remainder subject to open while any unborn siblings may still join the class. The remainder follows the life estate and becomes possessory only upon the son's death.
In 1997, the State of Hawaii had a highly concentrated wholesale oil market due to its small size and isolation over 1,600 miles from the mainland, with only two refineries and six gasoline wholesalers operating in the state. Chevron U.S.A. Inc. was the largest refiner and marketer, controlling 60 percent of the in-state gasoline market and 30 percent of the wholesale market on Oahu. Gasoline was sold at retail through approximately 300 service stations, about half leased by oil companies to independent lessee-dealers. Chevron operated 64 such lessee-dealer stations under arrangements where it leased land, constructed stations, and leased them to dealers while setting wholesale prices and requiring supply contracts. In June 1997, the Hawaii Legislature enacted Act 257, which capped the rent oil companies could charge lessee-dealers at 15 percent of gross profits from gasoline sales plus 15 percent of other product sales, and imposed other restrictions on station ownership. Thirty days after enactment, Chevron filed suit in the United States District Court for the District of Hawaii against the Governor and Attorney General, challenging the rent cap. The parties stipulated that the cap would reduce aggregate rent on 11 of Chevron's stations by about $207,000 per year but allow increases on the remaining 53, potentially raising overall rental income by nearly $1.1 million annually, and that Chevron had not recovered station maintenance costs through rent alone over the past 20 years. The District Court granted summary judgment to Chevron. On appeal, the Ninth Circuit vacated the judgment and remanded the case. After a one-day bench trial featuring competing expert economists, the District Court entered judgment for Chevron. The Ninth Circuit affirmed, and the Supreme Court granted certiorari in 2004.
View case1 common questions
A remainder is contingent when the taker is unascertained or when a condition precedent must occur before the interest becomes possessory. A remainder is vested when the taker is ascertained and no condition precedent remains. Courts prefer to construe remainders as vested when the language permits.
Supporting sources
…Law has deprived them of any gainful use of their “air rights” above the Terminal and that, irrespective of the value of the remainder of their parcel, the city has “taken” their right to this superjacent airspace, thus entitling them to “just compensation” measured by the fair market value of these air rights. Apart from…