A reverter guarantee is a provision in a mortgage that safeguards the lender against financial loss in the event that the property reverts back to the original owner. This occurrence, known as a possibility of reverter, arises when the property owner possesses a future interest in the property that will automatically activate upon the fulfilment of a specific condition. This interest, commonly referred to as a reverter, is linked to a special limitation that favors the original owner.
A reverter guarantee is a clause in a mortgage that safeguards the lender against financial loss in the event of a possibility of reverter. A possibility of reverter is a reversionary interest that is contingent upon a specific condition. This means that if a certain event occurs, the property will automatically return to the original owner. For instance, if a property owner sells a piece of land to a developer with the stipulation that the land must be used for a specific purpose, such as building a park, and the developer fails to fulfil this requirement, the property will revert back to the original owner. In this scenario, the original owner would hold a possibility of reverter. The reverter guarantee in a mortgage serves to protect the lender from financial loss if the property reverts back to the original owner, as the lender would no longer have a claim on the property and would be unable to recover their investment.
A reverter guarantee is a legal provision that ensures the return of property to the original owner if certain conditions or restrictions are violated.
A reverter guarantee is commonly used in real estate transactions, particularly when the property is being sold or leased with specific limitations or requirements.
The conditions triggering the reverter guarantee can vary depending on the agreement, but they often include non-compliance with zoning regulations, failure to maintain the property, or violation of any other specified restrictions.
While both terms involve the return of property to the original owner, a reverter guarantee is typically triggered automatically by the occurrence of certain conditions, whereas a right of reentry requires the owner to take affirmative action to reclaim the property.
Yes, a reverter guarantee can be waived or modified through a written agreement between the parties involved. However, such modifications should be carefully drafted and executed to ensure their enforceability.
If the reverter guarantee is triggered, the property automatically reverts back to the original owner, who regains full ownership and control over the property.
In some cases, a reverter guarantee may be enforceable by a third party, such as a government agency or a neighboring property owner, if they have a legal interest in the property or if the guarantee is included in a public interest statute.
The time limitations for enforcing a reverter guarantee can vary depending on the jurisdiction and the specific terms of the agreement. It is important to consult with a legal professional to understand the applicable time limitations.
In most cases, a reverter guarantee can be transferred or assigned to another party, provided that the original agreement allows for such transfers and the necessary legal formalities are followed.
If the reverter guarantee is breached, the original owner may seek legal remedies, such as filing a lawsuit for specific performance, damages, or injunctive relief, depending on the circumstances and the applicable laws.
This site contains general legal information but does not constitute professional legal advice for your particular situation. Persuing this glossary does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.
This glossary post was last updated: 17th April 2024.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
- Page URL:https://dlssolicitors.com/define/reverter-guarantee/
- Modern Language Association (MLA):Reverter Guarantee. dlssolicitors.com. DLS Solicitors. May 09 2024 https://dlssolicitors.com/define/reverter-guarantee/.
- Chicago Manual of Style (CMS):Reverter Guarantee. dlssolicitors.com. DLS Solicitors. https://dlssolicitors.com/define/reverter-guarantee/ (accessed: May 09 2024).
- American Psychological Association (APA):Reverter Guarantee. dlssolicitors.com. Retrieved May 09 2024, from dlssolicitors.com website: https://dlssolicitors.com/define/reverter-guarantee/
Our team of professionals are based in Alderley Edge, Cheshire. We offer clear, specialist legal advice in all matters relating to Family Law, Wills, Trusts, Probate, Lasting Power of Attorney and Court of Protection.
All author posts