(1) A term estate is anytime someone is granted ownership of property or possession that is not
determined by someone’s life.
―A to B for 50 years.‖ ―A to B for 1 year.‖
b. This is a present possessory interest but essentially a landlord/tenant relationship.
B. Future Interests
Reversionary Interests Created in a Grantor
Possibility of Reverter
(1) A possibility of reverter is the future interest that is created in the grantor whenever the grantor creates a fee simple determinable. This is durational language.
―A to B so long as B farms the land.‖ This creates the possibility of reverter in the grantor for the period of B’s life.
(2) Creation: Reversion is automatic. (3) Upon the happening of the event: If B stops framing the land, property automatically passes back to grantor.
―To A so long as A uses the property for residential purposes.‖ Presume a fee simple
determinable since durational language is used. As soon as the instrument is exercised, the possibility of reverter is automatically created. If A stops using the property for residential purposes, the property automatically reverts back to the grantor. (4) At strict common law:
a POR was not transferable. It had to pass to grantor’s heirs by deed/will.
(5) Under the modern trend: Now POR is freely transferable. b.
Right of Reentry (Power of Termination)
(1) A right of reentry is the future interest that can be created in grantor when grantor attempts to create a fee simple subject to condition subsequent. (2) Creation: In order for ROR to exist, it has to be spelled out in conveyance.
―A to B provided that B uses the premises for residential purposes.‖ If B ever stops
sing the premises for residential purposes, A or A’s heirs can enter and retake the property.
If conveyance does not spell out re-entry right, then it is fee simple subject to condition subsequent. If ROR is not spelled out, it does not exist and no future
interest in grantor. A or A’s heirs can sue B
for contractual damages but cannot renter the property. (3) Upon the happening of the event: If B stops using premises for residential purposes, the estate will not automatically revert back to grantor or his heirs. The grantor has to exercise right of reentry. (a) Courts favor fee simple subject to condition subsequent over fee simple determinable so there is not the automatic forfeiture. Courts hate forfeitures so ambiguity in text gets treated as condition subsequent. (4) At strict common law: ROR was transferable only by will or interstate succession. (5) Under modern law: Free transferability in most jurisdictions today. c.
A reversion is a future interest created in the grantor in a situation where grantor fails to provide for property to go somewhere. EXAMPLE:
―A to B for life.‖ Grantor has given a life estate to B but the grantor has not provided for
who is going to own the land after B dies. Will return the property to A after B dies.
―To B for life, then to B’s oldest child for life.‖ After the death of B’s oldest child, there
will be a reversion back to the grantor.
―A to B for 10 years.‖ There wil
l be a reversion back to A after 10 years.