Illinois Real Estate Practice Exam

When ownership of a property reverts back to the creator, what is this called?

1. Remainder interest

2. Reversionary

3. Personal easement in gross

4. Encroachment

The correct answer is: Reversionary

The correct term for when ownership of a property reverts back to the original creator is "Reversionary." This concept comes into play particularly in estate law, where a property owner may convey a property to another party with the stipulation that if certain conditions are not met or if it is no longer used for the specified purpose, ownership will return to the original grantor. A reversionary interest is essentially a future interest that the original creator holds, and it allows them to regain ownership after the end of a particular estate, typically a life estate. The other options represent different concepts in real estate. Remainder interest refers to a future interest that is created when a current life estate is established, providing that a third party will gain ownership upon the termination of that life estate. A personal easement in gross is a right to use another person’s property for a specified purpose, which does not involve any ownership interest. Encroachment pertains to a situation where a structure or improvement illegally extends beyond the boundaries of the property line, which is unrelated to property ownership reversion.