Also known as: redemption statutes · statutory redemption · right of redemption · statutory right of redemption
Written by attorneys — see sources below.
A statutory provision that permits a mortgagor or junior lienholder to redeem property after a foreclosure sale by paying the sale price plus interest and costs within a specified period. The right arises only after the sale and is distinct from the equity of redemption that ends at sale. Where the statute applies the purchaser at the sale takes the property subject to the redemption right until the period expires.
Ronald Reed defaults on his mortgage and the family farm is sold at foreclosure to Riverstone Manufacturing. During the statutory redemption period Ronald tenders the sale price plus interest and costs using funds pooled from relatives. The purchaser must convey the property back because the statute grants the original mortgagor the post-sale right to redeem.
Rowan Russell grants Redwood Bank a security interest in an automobile located in state Y while both parties are based in state X. Because state X and state Y maintain identical local rules on a debtor's right of redemption the court aggregates the contacts and treats the transaction as if it occurred entirely in one state for choice-of-law purposes.
The original mortgagor holds the primary right to redeem by paying the sale price plus interest and costs. Junior lienholders may also redeem in some jurisdictions when the statute expressly extends the right to them. A purchaser at the sale takes the property subject to these rights until the period expires.
Supporting sources
No. The statute requires only that the full amount of the sale price plus interest and costs be tendered within the statutory window. Pooling contributions from family members satisfies the requirement because the rule focuses on timely payment rather than the origin of the funds.
Supporting sources
The right ends once the statutory period expires without redemption. It is also cut off in secured transactions once the secured party has disposed of the collateral or entered a binding contract for its disposition.
Supporting sources
Equity of redemption allows a mortgagor to pay the underlying debt and stop foreclosure before any sale occurs. Statutory redemption is a separate post-sale right keyed to the foreclosure sale price rather than the original debt and exists only where a statute creates it.
Supporting sources
…stockholder, except as a result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock not caused, directly or indirectly, by the interested stockholder; or (v) any receipt by the interested stockholder of the benefit, directly or indirectly (except…