What does "reversionary interest" mean?

Reversionary interest refers to the right of the original property owner, often called the lessor or grantor, to regain possession of the property once the lease term or other occupancy agreement has ended. This concept is foundational in property law and lease agreements, as it establishes that after a tenant's rights under the lease end, the ownership reverts back to the landlord or property owner without any further action needed on their part.

This interest protects the property owner's investment and ensures they can reclaim their property for new tenants or for their own use. Understanding this concept is crucial for lease analysts, as it affects how leases are structured and the rights of both parties involved in the leasing process.

In contrast, the other choices represent different rights or options that tenants may have but do not pertain to the fundamental idea of reversionary interest. The rights to renew a lease, purchase a property, or sublease are separate from the core principle of reverting property back to the original owner at the end of a tenancy.