Reversion Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Reversion, written in plain English, along with examples of how it is used.

What is Reversion?

(n) Reversion is the process by which a right in a property transferred by a deed of trust, mortgage or pledge etc is returned back to the original owner after the interest held by others on such property is exhausted. For example when a trust is formed with his mother as beneficiary and himself as the residual owner, the property reversion occurs on death of mother.

History and Definition of Reversion

Reversion is a term used in property law to describe the process of a right that is transferred through a deed of trust, mortgage, or pledge eventually returning to the original owner once the rights held by others on the property have been exhausted. The concept of reversion has been around for centuries, dating back to feudal times when property owners would grant estates to others but retain ultimate ownership.

In modern times, reversion can happen in several situations, such as when a trust is formed with one individual as the beneficiary and another as the residual owner, and the property reverts back to the original owner upon the death of the beneficiary.

Examples of Reversion

  1. John transfers the ownership of his property to his son, but with the condition that if his son dies without children, the property would revert back to John.

  2. Henry creates a trust with himself as the beneficiary and his sister as the residual owner, but on Henry's death, the property will revert back to his estate.

  3. The company takes out a mortgage on the land, and when the mortgage is fully paid, the property rights will revert back to the company.

Related Terms

  1. Remainder - Similar to reversion, a remainder is a future interest in a property that will come into effect after a present interest ends.

  2. Right of reentry - A right that allows a landlord to take back possession of a property if the tenant breaches the lease agreement.

  3. Life estate - An estate in which the owner has a right to possess the property for the duration of their life, but after their death, the property reverts back to the original owner or a named remainderman.