Which statement about the possibility of reverter is true?

Which statement about the possibility of reverter is true?

• A. It ends up in the grantee automatically upon the happening of a condition.
• B. It is retained by the grantor for a fee simple determinable.
• C. It is held by a third party.
• D. It has no impact on chain of title.

Answer: (B)

In a defeasible fee simple determinable, the grantor keeps a future interest called a possibility of reverter. The property is given to the grantee only so long as the specified condition holds; if that condition occurs, the title automatically returns to the grantor. That’s why the correct idea is that the possibility of reverter is retained by the grantor in connection with a fee simple determinable. It isn’t held by the grantee, nor by a third party, and it does affect chain of title because it creates a potential reversion back to the grantor when the condition is triggered.

In a defeasible fee simple determinable, the grantor keeps a future interest called a possibility of reverter. The property is given to the grantee only so long as the specified condition holds; if that condition occurs, the title automatically returns to the grantor. That’s why the correct idea is that the possibility of reverter is retained by the grantor in connection with a fee simple determinable.

It isn’t held by the grantee, nor by a third party, and it does affect chain of title because it creates a potential reversion back to the grantor when the condition is triggered.