Legal Definitions - redemption

Redemption is the legal act of reclaiming or regaining possession of something, often property, by paying a specific price. This process allows an individual to recover an asset that was previously forfeited or lost.

Redemption refers to the act of regaining ownership or possession of something that was lost, forfeited, or taken as collateral, typically by paying a required amount of money. This payment settles a debt, obligation, or lien, thereby restoring the original owner's rights.

• Example 1: Pawning an Item

  Imagine someone needs quick cash and takes their antique guitar to a pawn shop. They receive a loan in exchange for the guitar, which the pawn shop holds as collateral. To get the guitar back, the individual must pay the pawn shop the original loan amount plus any agreed-upon interest and fees by a certain date. This act of paying the required sum to recover the guitar is an example of redemption.

• Example 2: Mortgage Foreclosure

  In some states, if a homeowner defaults on their mortgage and their home is sold at a foreclosure auction, they might still have a "statutory right of redemption." This legal right allows the original homeowner to reclaim ownership of the property from the new purchaser by paying the full amount of the foreclosure sale price, plus any additional costs and interest, within a specific period after the sale. By making this payment, the homeowner is redeeming their property.

• Example 3: Tax Lien Sales

  When a property owner fails to pay their property taxes, the local government may sell a tax lien certificate to an investor. This certificate gives the investor the right to eventually take ownership of the property if the taxes remain unpaid. However, the original property owner typically has a period during which they can redeem their property by paying the investor the amount of the tax lien, plus any accrued interest and penalties. This payment clears the lien and restores full ownership to the original owner.