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Contested Redemptions

Posted by Denise Evans on

What actions must done in writing when there is a contested redemption after an Alabama foreclosure or tax sale?

After a mortgage foreclosure, a redeeming party must also pay the value of all permanent improvements added after the foreclosure and before redemption.  After a tax sale of a property that contains a residential structure, a redeeming party must also pay the value of all preservation improvements performed after the tax sale and before redemption. The following rules apply to either type of redemption.

Writing required:  The redeeming party must make a written demand on the investor for the value of the improvements.

Writing not required: Within 10 days of the written demand for value of the improvements, the investor must provide the value of the improvements.

Writing required: Within 10 days, redemptioner disputes value of improvements and provides name of its referee to investor.

Writing not required: Within 10 days, investor must advise redeeming party of its referee.

Writing not required: If the referees cannot agree, they have ten days to appoint an umpire, and then all three of them have 10 days to come up with a value, majority vote rules.

Why do you care?

  1. You need to do your part correctly.
  2. If you think the other party must do something in writing, but they don't, you can't afford to just ignore them.
  3. If the other party is allowed to do something verbally, they can later testify they said something different. If you receive verbal notice, you should send a "This is to confirm that you said..." letter to them, as soon as possible.
  4. Sometimes you might be in litigation and be able to win on a technicality, such as that the other person did not do something in writing. If you make that claim early, you can save yourself a lot of time and legal fees. If you don't think about it until late in the lawsuit, the court might say it is too late to raise that issue, and you don't get to take advantage of the technicality.

If you want to read a court opinion that discusses the issue of things being in writing when there is a redemption, you can read Stevenson v. King, 243 Ala. 551, 10 So.2d 825 (1952) by clicking HERE.

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