Reversions

Valuing a Reversionary Interest

by Administrator on Apr 11, 2017 • Reversions • 3238 Views

The value of an interest in real property that comes in the future is a prospective value. Usually an appraiser knows the date that a property interest will revert, since it's often based on the terms of a long-term lease. There are however other situations, like valuing a life estate, when an appraiser does not have a specific date. In these cases an appraiser has to rely on life-expectancy guidelines. The reversion may be certain but it may depend on how long a person or persons will live. There are other cases when a reversion depends on the action of a third-party to abandon a property or to change its use. Deed restrictions for example often state that if a property is no longer used for a highway, a railroad or another stated purpose that the property reverts to its original owner. Reversions of this type can create a real ownership mess when a railroad right-of-way for example is abandoned after 50 or more years of use. Highways are often abandoned when new ones with a

Continue reading →