Also known as: automatic reverters · possibility of reverter
Written by attorneys · grounded in primary & secondary sources — see below
A reversionary interest retained by a grantor that becomes possessory automatically upon the occurrence of a stated condition without any further action by the grantor.
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Antonio Alvarado conveyed a corner building to a chef partnership for as long as the ground floor operated as a full-service restaurant. When the partnership shifted to catering and offices, the partnership's estate ended by its own terms. Title returned at once to Antonio's heirs without any lawsuit or notice.
Angela Acosta conveyed a dormitory to Metro Ed so long as the building served classroom instruction. After Metro Ed subleased space for commercial tutoring, the stated condition failed. Title shifted automatically to Royal Institute as successor to Angela's retained interest.
Arthur Abrams conveyed an office complex to Highland Indemnity so long as it remained a mutual-insurer headquarters. After demutualization and commercial leasing, the use restriction was breached. The property passed automatically under the retained future interest to the designated successor.
Aisha Ahmed held a fee tail preserved for a single lifetime. Upon her death her surviving spouse claimed dower. The claim yielded to any possibility of reverter that had restricted the estate and remained undestroyed.
Albert Allen held a fee simple conditional. Upon his death his surviving spouse asserted curtesy. The interest remained subordinate to any possibility of reverter that had restricted the estate and had not been destroyed by prior transfer.
A possibility of reverter remains in the grantor or the grantor's successors rather than being created in a third party. The rule against perpetuities therefore does not apply to it.
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An automatic reverter takes effect by its own terms upon breach of the condition. A power of termination requires the holder to take affirmative action such as reentry.
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The interest passes under the grantor's will or by intestacy to the person entitled under the possibility of reverter.
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