Legal Definitions - certificate of redemption

A certificate of redemption is an official legal document that confirms a property owner has successfully reclaimed their property after it was sold in a foreclosure sale. This certificate is issued by a designated public official, often a sheriff or court clerk, to the former owner as proof that they paid the full redemption price—which typically includes the foreclosure sale price, interest, and any associated costs—within a legally specified period. It essentially reverses the foreclosure sale, returning ownership to the original debtor.

• Example 1: Residential Home

  Sarah's home was foreclosed on by her bank due to missed mortgage payments, and the home was subsequently sold at auction. However, her state has a six-month statutory redemption period. Sarah received an inheritance shortly after the sale and, within that six-month window, paid the full amount required to redeem her home, including the sale price, interest, and legal fees, to the county sheriff's office.

  Illustration: The sheriff's office would then issue Sarah a certificate of redemption. This document serves as official proof that she fulfilled her legal right to reclaim her property, nullifying the foreclosure sale and restoring her ownership.

• Example 2: Commercial Property

  A local restaurant, "The Daily Grind," owned by David, faced foreclosure on its building after defaulting on a business loan. The building was sold to a new investor at a foreclosure auction. David, determined to save his business, secured a new loan from a different lender and, within the statutory redemption period allowed in his state, paid the redemption amount to the court-appointed trustee.

  Illustration: Upon receiving David's payment, the trustee would issue a certificate of redemption for "The Daily Grind" property. This certificate legally confirms that David has exercised his right to redeem the commercial building, thereby canceling the foreclosure sale and allowing him to retain ownership and continue operating his restaurant.

• Example 3: Investment Property (Vacant Land)

  Mark owned a vacant plot of land he intended to develop later. He fell behind on property taxes, and the county eventually initiated a tax foreclosure sale, selling the land to a new buyer. Mark realized his error and, within the one-year redemption period specified by state law for tax sales, paid all outstanding taxes, penalties, and the sale price to the county treasurer's office.

  Illustration: The county treasurer's office would then provide Mark with a certificate of redemption. This official document proves that Mark successfully redeemed his vacant land from the tax foreclosure sale, confirming his renewed ownership and extinguishing the claim of the buyer at the tax sale.