Property law covers a variety of types of property interests, including remainder interest. A future interests is a remainder interest. It means that the owner holds a future interest in property that does not include possessory rights. A reversionary or future interest is one type of remainder interest. A reversionary is a property owner’s interest that remains after he or she has given another person an insignificant interest in the property. If the original owner regains full ownership and possessory rights to property, a reversionary interest is created.
A lease of property or a grant of a life estate in a property are two common ways that a reversionary interests is created. Both cases will result in the original owner losing all rights and possession. All rights to the property are transferred to the original owner when a lease expires. If the grantee dies, all rights and interests in the property, including any life estate, also go to the grantee.
A lease agreement grants the lessee a variety of rights to the property, according to the terms. The lessee is entitled to possession for the duration of the lease. The property is not owned by the lessee. The lease expiration is the only condition that will revert all rights to the original owner. Other conditions may exist in a lease, such as default of the lease agreement.
If the owner grants the right to a person to live on the property throughout their lives, a life estate can be created in the property. Life estates can be more complex because the rights granted to grantees under life estates may differ from one jurisdiction to another. The death of the grantee will be considered the condition that is necessary for the property rights to revert to the original owner. Sometimes, the life estate is granted in a last will. In these cases, the reversionary interests will be reverted to the estate and will become part of the estate’s assets upon the grantee’s death.
