HB 986

Under Tennessee law, a reverter, or reversion, is the right of a grantor or their heirs to regain ownership of a property after a specific condition has been met or time period has passed . This bill provides the following with regard to reverters or forfeiture provisions:  T hat reverter or forfeiture provisions of unlimited duration contained in a deed, will, or other document establishing the common law estates of fee simple determinable, fee simple subject to condition subsequent, and fee simple subject to executory limitation executed more than 75 years prior to July 1, 2025, are abolished and unenforceable.  T hat reverter and forfeiture provisions contained in a conveyance of real property by deed, will, or other document establishing an interest under the common law estates of fee simple determinable, fee simple subject to condition subsequent, and fee simple subject to executory limitation terminate and become unenforceable 75 years from the date of the conveyance containing the reverter or forfeiture provision. However, past rights vested in deeds as of July 1, 2025, are converted to a fee simple absolute at the end of 75 years from the date created unless a sworn statement containing the name of the current owner of the property, the estate sought to be preserved, and a description of the property is filed in the register of deed's office of the county in which the property is located by July 1, 2026, to preserve the right. The sworn statement extends the reverter provision one time for a period of five years from July 1, 2025, or from the expiration of the 75 - year period, whichever occurs first, at which time the interest will become a fee simple absolute in the owner of the property.  That a reverter or forfeiture provision contained in a deed, will, or other document conveying an interest in real property and purporting to establish the common law estates of fee simple determinable, fee simple subject to condition subsequent, and fee simple subject to executory limitation, executed on or after July 1, 2025, is invalid and unenforceable.  That r eversionary estates terminated or prohibited by this bill results in title in the grantee or recipient being fee simple absolute. An action must not be maintained to recover an interest or to forfeit an interest upon the termination of the reversionary interest.