After several attempts at reducing the redemption period on foreclosed property, Alabama has finally passed a law that cuts the redemption timeline in half. Effective January 1, 2016, Act 2015-79 goes into effect and although this is a much anticipated and needed law, be advised that the new redemption law is narrowly construed so be aware of the specific circumstances that allow the redemption period to be reduced to 180 days.
180 Day Redemption Period Requirements
- The property must be residential property and be homesteaded in the tax year during which the sale occurred.
- The mortgagor (borrower) must be properly notified of his or her redemption rights. Notice must be given 4 times. Three times via publishing in a newspaper situated in the county where the residential property is located. The fourth notice must be mailed to the mortgagor 30 days prior to the foreclosure sale.
- The mortgage, junior mortgage, or judgement that allows the foreclosure must be dated on or after January 1, 2016. So anything prior to January 1, 2016 will not fall into the 180 day redemption period.
Although the new law only pertains to homesteaded residential property that is mortgaged after January 1, 2016, the state legislature has put Alabama more in-line with other states. The historical one-year redemption period still applies to all other properties that have been foreclosed. For example, commercial property, residential property that is non-homesteaded, or newly constructed residential neighborhoods where the homes have not been sold would all still fall under the one year redemption period.
Alabama’s new 180 day redemption period is a good step in the right direction. It will allow foreclosed properties that meet the requirements to be resold quicker which will protect communities and help real estate markets throughout Alabama.
*This article is provided for general informational purposes only. It is not intended as professional counsel and should not be used as such. You should contact your attorney to obtain advice with respect to this or other legal matters.
By: Stuart Gordan, Esq
McCalla Raymer Pierce, LLC
1544 Old Alabama Road Roswell, GA 30076
Office: (678) 281 – 6524 / Ext. 16524
Mobile: (770) 842 – 6478
