Definition
A reversionary lease is a lease that does not take effect immediately but is instead granted to commence at a future date — typically upon the expiration or termination of an existing lease on the same property. The landlord grants the new lease while a prior tenancy is still in possession, so the new tenant's right to occupy is deferred until that prior interest ends.
Two related but distinct usages appear in the historical sources:
1. Primary meaning: A lease granted today to begin in the future, after the current lease expires. The landlord is, in effect, pre-leasing the property before it becomes available. The new tenant holds a future interest — a right to possession that has not yet vested in enjoyment.
2. Secondary (technical) meaning: Any lease granted out of a reversion — that is, any lease where the landlord retains a reversionary interest in the land after the tenancy ends. Under this broader usage, virtually every ordinary lease is technically a "lease in reversion" because the landlord's fee or larger estate sits behind the tenancy and will return to the landlord when the term concludes.
Modern practice almost exclusively uses the term in the first, narrower sense: a lease that is contracted now but does not begin until a specified future date.
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Common Confusion
The reversionary lease is easily confused with an ordinary lease that merely has a delayed start date. The distinction matters because a true reversionary lease is granted while an existing tenancy on the same property is still running — meaning there are two overlapping lease instruments in existence simultaneously, with the second scheduled to activate upon the first's expiration. A lease with a simple future commencement date on vacant property is typically not called reversionary; it is simply a lease with a deferred term.
The term is also sometimes conflated with a lease of a reversionary interest — that is, a lease of the landlord's remainder or reversion itself rather than of the possessory interest. These are different transactions.
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Recognized Forms
/SUBTYPES
Agreement for a reversionary lease: A binding contract to grant a reversionary lease at a future date, which may be specifically enforceable in equity. Distinct from the lease instrument itself.
Lease in reversion (broad sense): Any lease where the landlord retains a reversion. This older usage, reflected in Rapalje & Lawrence and Bouvier, encompasses ordinary leases and is largely a technical classification rather than a transactional category.
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Why It Matters in Research
Researchers working in historical property sources will encounter the phrase "lease in reversion" used broadly — covering any lease where a reversionary estate remains in the grantor — which is almost every lease. Bouvier and Rapalje & Lawrence both flag this, citing Woodfall on Landlord and Tenant for the proposition that all leases where a particular estate subsists are leases in reversion. This usage can mislead a modern researcher who expects the term to mean only a future-commencing lease. Read historical sources carefully for which sense is intended.
In transactional real estate research, the reversionary lease appears most often in commercial and ground lease contexts, where sophisticated landlords pre-commit future tenancies on long-term assets. A landlord with a ten-year lease expiring in three years might grant a reversionary lease today to a new tenant whose term begins upon that expiration. This creates questions about the landlord's authority to grant the reversionary lease (does the existing lease restrict it?), the new tenant's priority against competing interests, and the original tenant's rights if the original lease is extended or the landlord defaults.
Priority and recording are critical research traps. Whether a reversionary lease is effective against third parties — subsequent purchasers, lenders, or other tenants — depends on notice and recording rules that vary by jurisdiction. In many states, a reversionary lease that is not recorded may be unenforceable against a bona fide purchaser. Researchers examining title chains or priority disputes should treat an unrecorded reversionary lease as a potential hidden encumbrance.
Statutory restrictions on reversionary leases have appeared in English law (historically limiting how far in advance a reversionary lease could be granted), and some early American jurisdictions followed similar rules. These restrictions are largely obsolete in American practice but may surface in historical title or landlord-tenant research.
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Historical Dictionary Support
Black's, Rapalje & Lawrence, and Bouvier converge on a nearly identical definition, with all three citing Wharton and, through cross-reference, Woodfall's Landlord and Tenant. The consistency reflects how thoroughly the nineteenth-century American dictionaries drew from English property doctrine on this point.
The broader definition — that all leases where a particular estate subsists are leases in reversion — appears in Rapalje & Lawrence and Bouvier but not in Black's. Black's defines the term functionally as "a second lease to commence after the expiration of a former lease," which aligns with modern transactional usage. Rapalje & Lawrence preserves both meanings side by side, making it the most complete historical source for this term.
What the historical dictionaries do not address: recording requirements, lender consent issues, restrictions in existing leases against the grant of reversionary leases, and the modern commercial lease structuring context in which the instrument now most commonly appears. For those dimensions, the historical sources must be supplemented with treatise authority and current statutory research.
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Jurisdictional Note
American jurisdictions generally permit reversionary leases without the durational restrictions that existed under English statute. However, whether a reversionary lease binds subsequent purchasers or encumbrances depends on local recording acts. Some states require the reversionary lease to be recorded to be effective against third parties; others apply inquiry notice rules. Researchers should not assume the recording law applicable to ordinary leases applies identically to reversionary leases without confirming local authority.
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Encyclopedia Cross-Reference
Property Law Encyclopedia § Landlord-Tenant — Commercial Leases (Triple Net, Percentage, Ground Lease)
Real Estate Transactions & Construction Encyclopedia § Commercial Leases — Gross, Net, Triple Net, Percentage, and Ground Leases
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