(14) Reversions, Reverter, Rights of Entry, and Restraints on Alienation

What should you determine after identifying all present and future interests?

Whether the grantor has retained a reversion.

What is a reversion?

A future interest retained by the grantor after conveying a lesser estate than the grantor owns.

Who holds a reversion?

The grantor.

When does a reversion arise?

Whenever the grantor conveys less than the entire estate owned and does not give the remaining interest to another grantee.

Example: O conveys "to A for life." What future interest does O retain?

A reversion.

Example: O conveys "to A for 20 years." What future interest does O retain?

A reversion.

Can a reversion become possessory automatically?

Yes. It becomes possessory when the preceding estate naturally ends.

What is a possibility of reverter?

A future interest retained by the grantor following the creation of a fee simple determinable.

Which present estate is paired with a possibility of reverter?

A fee simple determinable.

Who holds the possibility of reverter?

The grantor.

When does a possibility of reverter become possessory?

Automatically upon the occurrence of the stated condition.

Does a possibility of reverter require the grantor to take affirmative action?

No.

What is a right of entry?

A future interest retained by the grantor following the creation of a fee simple subject to a condition subsequent.

Which present estate is paired with a right of entry?

A fee simple subject to a condition subsequent.

Who holds the right of entry?

The grantor.

When may the grantor exercise a right of entry?

After the stated condition occurs.

Does a right of entry operate automatically?

No.

What must the grantor do to enforce a right of entry?

Take affirmative action to reclaim the property.

What is a restraint on alienation?

A restriction on the grantee's ability to transfer an interest in property.

What is the general rule regarding restraints on alienation?

A total restraint on the alienation of a fee simple is void.

What happens if a deed imposes a total restraint on the alienation of a fee simple?

The restraint is ignored, and the grantee may freely transfer the property.

Why are total restraints on alienation generally void?

Because the law favors the free transferability of property.

Does an invalid restraint on alienation invalidate the fee simple itself?

No. Only the restraint is void.

Testable Issue: When does a grantor retain a reversion?

When the grantor conveys a lesser estate without transferring the remaining interest to another grantee.

Testable Issue: What future interest follows a fee simple determinable?

A possibility of reverter.

Testable Issue: What future interest follows a fee simple subject to a condition subsequent?

A right of entry.

Testable Issue: What is the difference between a possibility of reverter and a right of entry?

A possibility of reverter operates automatically upon the occurrence of the condition, while a right of entry requires the grantor to take affirmative action.

Testable Issue: What is the rule regarding total restraints on the alienation of a fee simple?

They are void, and the grantee may freely transfer the property.

Essay Rule: How should you analyze a grantor's retained future interests?

Determine whether the grantor retained a reversion because a lesser estate was conveyed, a possibility of reverter after creating a fee simple determinable, or a right of entry after creating a fee simple subject to a condition subsequent, and remember that total restraints on alienation of a fee simple are void.

Master Synthesis: What is the framework for analyzing a grantor's retained interests?

After identifying all estates conveyed to grantees, determine whether the grantor retained a reversion, a possibility of reverter, or a right of entry, and evaluate whether any attempted restraint on alienation is enforceable.