Also known as: redemption periods · statutory redemption period · equity of redemption
Written by attorneys · grounded in primary & secondary sources — see below
A statutory period after a foreclosure sale during which the mortgagor or certain junior lienholders may recover the property by paying the sale price plus interest and costs. This right arises only after the foreclosure sale and is distinct from any pre-foreclosure equitable right to redeem. Not all jurisdictions provide a statutory redemption period.
Ruby Rivera granted a mortgage on her warehouse to Redwood Bank under a title-theory jurisdiction. After default the bank foreclosed and sold the property at auction. Rivera attempted to redeem during the statutory period by tendering the sale price plus interest, but the court held that under title theory her only remaining interest had terminated at the sale and no statutory redemption right existed.
Renata Russo defaulted on a mortgage held by Ridgeway Partners. The lender commenced judicial foreclosure and obtained a judgment ordering sale. Russo sought to redeem before the sale by paying the full debt, but the court ruled that the foreclosure judgment had already terminated her equity of redemption and only a statutory redemption right after sale remained available in that jurisdiction.
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Robert Rivera lost his farm at a foreclosure sale conducted by Rocky Mountain Mining. State law provided a sixty-day statutory redemption period. Rivera obtained financing and tendered the sale price plus interest and costs on day fifty-five. The purchaser at the sale was required to convey the property back because the tender occurred within the statutory window.
Rowan Russell signed a mortgage containing a clause waiving any post-sale statutory redemption right. After default the lender foreclosed and sold the property at auction. Russell tendered the sale price plus interest within the statutory period. The court held the waiver clause void and required the purchaser to convey the property back.
Regina Robinson defaulted on a home mortgage during a statewide economic crisis. State legislation temporarily extended all statutory redemption periods by six months and required payment of reasonable rental value during the extension. Robinson remained in possession and paid the required rental amount. The mortgagee challenged the extension but the court upheld it as a valid temporary measure protecting mortgagors without destroying the underlying security interest.
Rajesh Rao purchased property subject to an existing mortgage and later redeemed it after foreclosure proceedings began. In calculating his adjusted basis for tax purposes Rao included the full amount of the mortgage debt he had satisfied through redemption. The court confirmed that the redemption payment was properly added to basis because it represented an additional cost of acquiring clear title.
Equity of redemption is the mortgagor's right to pay the debt and reclaim the property before foreclosure occurs. Statutory redemption is a post-sale right available in some jurisdictions that allows redemption after the foreclosure sale by paying the sale price plus interest and costs within a fixed period.
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No. Some jurisdictions provide no statutory redemption right at all. Where the right exists the purchaser at the foreclosure sale takes title subject to the redemption period until it expires.
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No. Agreements that clog or waive the equity of redemption are void as against public policy. Courts refuse to enforce clauses that eliminate the opportunity to redeem before or after foreclosure.
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The mortgagor and sometimes junior lienholders may redeem. Priority between the mortgagor and junior lienholders is governed by the specific statute and the timing of any tender.
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…grounds where they were found to be unfair or inadequacy of price was so gross as to shock the conscience.[^maj-17] The "equity of redemption" is the creature of equity. While courts of equity could not alter the legal effect of the forfeiture of the estate at common law on breach of condition, they succeeded, operating on the…