Also known as:rights of reverter · possibility of reverter
Written by attorneys — see sources below.
A reversionary interest retained by a grantor that becomes possessory upon the occurrence of a specified event ending the grantee's estate. The interest arises when the deed language creates a fee simple determinable or analogous defeasible estate subject to an automatic condition precedent.
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How its tested
Common Examples
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Factory Use Restriction Triggers Reverter
Nova Plastics conveyed an old factory to Omega Metal by deed providing that Omega Metal would hold the premises so long as they were used for light manufacturing and not for warehousing. The deed stated that ownership would automatically vest in the grantor upon discontinuation of such use. Omega Metal later subleased the building to a logistics company that primarily stores goods. Nova Plastics holds a right of reverter that will become possessory if the prohibited use continues.
Mutual Insurer Headquarters Change
Betty conveyed a suburban office complex to Highland Indemnity by deed stating the property was to be held so long as it remained the headquarters of a mutual insurer and upon any change the estate would end and the property would pass to South Assurance or revert to Betty's estate. Highland later demutualized and leased most of the building to technology firms. Betty's lineal descendants receive any remaining reversionary interest through probate after the condition occurred.
A grantor conveyed land creating a fee tail in the deceased spouse. The surviving spouse claims dower in the land. The surviving spouse's interest is subordinate to any right of reverter that restricted the estate of the deceased spouse.
Fee Tail Preserved For Single Lifetime
A grantor conveyed land creating a fee tail preserved for a single lifetime only in the deceased spouse. The surviving spouse claims dower in the land. The surviving spouse's interest is subordinate to any right of reverter that restricted the estate of the deceased spouse.
Fee Simple Conditional Spouse Claim
A person held an estate in fee simple conditional. The surviving spouse claims dower in the land. The surviving spouse's interest is subordinate to any right of reverter that restricted the estate of the deceased spouse and which has not been destroyed by a transfer made by the deceased spouse.
Railroad Right Of Way Abandonment
The United States granted a right of way across land for railroad purposes. The railroad later abandoned the line. The right of reverter held by the adjacent fee owner became possessory upon abandonment because the original grant limited the estate to the specified use.
Marvin M. Brandt Revocable Trust, et al. v. United States134 S. Ct. 1257 (2014)
In 1908 the Laramie, Hahn's Peak and Pacific Railroad obtained a 200-foot-wide right of way across public lands in Wyoming under the General Railroad Right-of-Way Act of 1875. The railroad completed construction of its line in 1911. The line later passed through several owners and was used primarily to transport timber and cattle.
In 1976 the United States issued a land patent conveying an 83-acre parcel in Fox Park, Wyoming, to Melvin and Lulu Brandt. The patent conveyed to the Brandts fee simple title to the land "with all the rights, privileges, immunities, and appurtenances, of whatsoever nature, thereunto belonging, unto said claimants, their successors and assigns, forever." The patent stated that the land was granted "subject to those rights for railroad purposes as have been granted to the Laramie[,] Hahn's Peak & Pacific Railway Company, its successors or assigns." The right of way crossed approximately ten acres of the patented parcel.
In 1996 the Wyoming and Colorado Railroad notified the Surface Transportation Board of its intent to abandon the right of way. After removing the tracks and ties and obtaining Board approval, the railroad completed abandonment in 2004.
In 2006 the United States filed suit seeking a judicial declaration of abandonment and an order quieting title to the right of way in the Government. The complaint named the owners of 31 parcels crossed by the abandoned right of way, including Marvin Brandt who held the Fox Park parcel through a family trust. Brandt contested the claim and filed a counterclaim asserting that the right of way was a mere easement extinguished by abandonment. The district court granted summary judgment to the United States. The Court of Appeals for the Tenth Circuit affirmed. The Supreme Court granted certiorari.
How does a possibility of reverter differ from a reversion?
A reversion is any reversionary interest which is not subject to a condition precedent. A possibility of reverter is any reversionary interest which is subject to a condition precedent.
Supporting sources
What happens to a possibility of reverter when the owner of a fee simple conditional dies without issue?
The land passes to the person entitled under the possibility of reverter when there is no specified issue and no person holding an executory interest limited as an alternative.
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Is a right of reverter subordinate to a surviving spouse's dower claim in a fee tail estate?
The surviving spouse's dower or curtesy interest is subordinate to any possibility of reverter or power of termination that restricted the estate of the deceased spouse.
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Does the deed language so long as create a possibility of reverter?
Yes. Words such as so long as signal that the estate ends automatically when the stated use stops. That automatic ending is a condition precedent to the grantor's future interest, converting it into a possibility of reverter rather than a reversion.
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Can a grantor transfer a retained right of reverter by deed?
The owner of any reversionary interest in land has the power by an otherwise effective conveyance inter vivos to transfer the interest or any part thereof.
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134 S. Ct. 1257 (2014)
…"basic common law principles" require us to retreat from our prior holdings that railroad rights of way entail an implied possibility of reverter to the original grantor—the United States—should the right of way cease to be used by a railroad for its intended purpose. Ante , at 1265–1266. But federal and state decisions in this…