remainder

Definition of remainder

Etymology

From remain +‎ -er.

Pronunciation

• Audio (US) ^[?]
• Rhymes: -eɪndə(r)

Noun

remainder (plural remainders)

1. (commerce) Excessive stock items left unsold and subject to reduction in price.
   
   I got a really good price on this shirt because it was a remainder.
   
   
2. (law) An estate in expectancy which only comes in its heir's possession after an estate created by the same instrument has been determined

Verb

remainder (third-person singular simple present remainders, present participle remaindering, simple past and past participle remaindered)

1. (commerce) To mark or declare items left unsold as subject to reduction in price.

Further reading

Remainder (law)

A remainder in property law is a future interest given to a person (who is referred to as the transferree or remainderman) that is capable of becoming possessory upon the natural end of a prior estate created by the same instrument. For example, a person, D, gives ("devises") a piece of real property called Blackacre “to A for life, and then to B and her heirs.” A receives a life estate in Blackacre and B holds a remainder which is capable of becoming possessory when the prior estate naturally terminates (A's death). However, B cannot claim the property until A's death. There are two types of remainders in property law, vested and contingent. A future interest following a fee simple absolute cannot be a remainder because of the preceding infinite duration.

Vested remainder

A remainder is vested if (1) the remainder is given to a presently existing and ascertained person, and (2) it is not subject to a condition precedent. A vested remainder may be indefeasibly vested, meaning that it is certain to become possessory in the future, and cannot be divested. An example, O conveys to "A for life, then to B and B's heirs." B has an "indefeasibly vested remainder" certain to become possessory upon termination of A's life estate. B or B's heirs will clearly be entitled to possession upon A's death. A vested remainder may not be certain to become possessory. An example of this: O conveys "to A for life, then to A's children." A has one child, B, so B has a vested remainder because B is ascertainable. But, A may have no other children in his life, and B could die before A, so the vested remainder is not certain to become possessory.

Contingent remainder

A remainder is contingent if one or more of the following is true: (1) it is given to an unascertained or unborn person, (2) it is made contingent upon the occurrence of some event other than the natural termination of the preceding estates. For example, if we assume that B is alive, and O conveys "to A for life, then to the heirs of B...", then the remainder is contingent because the heirs of B cannot be ascertained until B dies. No living person can have actual heirs, only heirs apparent.

Identifying remainders

The key difference between a reversion and a remainder is that a reversion is held by the grantor of the original conveyance, whereas "remainder" is used to refer to an interest that would be a reversion, but is instead transferred to someone other than the grantor. Similarly to reversions, remainders are usually created in conjunction with a life estate, life estate pur autre vie, or fee tail estate (or a future interest that will eventually become one of these estates).

Usage Note: Although the term reversion is sometimes used to refer to the interest retained by a landlord when he grants possession to a tenant, not all real estate professionals can agree on the correctness of this usage of the term. Few people would refer to such a transferred interest as a remainder, so this type of "remainder" tends not to be a problem when discussing property rights.

Examples

"A and her heirs, then to B"

B is not a remainder since a remainder cannot follow an estate held in fee simple absolute.

"A for life, then to B"

B is a vested remainder since the remainder is given to an ascertained person (B) and there are no precedent conditions (such as "if B is not married").

"A for life, then to B if B reaches 21, and if B does not reach 21 then to C and C's heirs"

B and C are both contingent remainders. While B and C are ascertained persons, the condition (reaching 21) implies alternative contingent remainders for both parties.