The right of redemption is a right retained by homeowners of a foreclosed property to redeem or reclaim the property if they can pay the remaining debt to the mortgage company. The borrower can redeem the home before foreclosure in nearly all states to avoid foreclosure on the property, but only some states offer the right to redeem the property after the foreclosure has taken place. The right of redemption after the sale is provided by statute and is therefore referred to as a statutory right of redemption.
Judicial vs. Nonjudicial Foreclosures
The type of foreclosure that the lender pursues is important in determining the rights of the parties in foreclosure, particularly the right of redemption. In a judicial foreclosure, the lender must file a petition through the state court system. The judge must approve the foreclosure for the process to begin. In some states, judicial foreclosure is the sole method of foreclosure for lenders. In other states, nonjudicial foreclosure is an alternative method for lenders to foreclose on defaulted properties. Nonjudicial foreclosures in Arizona require providing a notice of default to the borrower and a notice indicating the date of the sale of the home. Arizona is one of many states that authorize nonjudicial foreclosures.
Arizona’s Statutory Right of Redemption
In Arizona, defaulting homeowners do not have a right of redemption after a nonjudicial foreclosure. A.R.S § 33-811(E). Rather, Arizona provides a statutory right of redemption only after a judicial foreclosure. A.R.S. § 12-1282. Homeowners are required to pay the purchase price for the home in addition to other fees and expenses. The property must be redeemed up to six months following the sale date, or 30 days after the sale date if the court concludes that the property was abandoned and not used for grazing or agricultural purposes. These time periods are referred to as the redemption periods. The property owner must exercise the right to redeem within one of these periods and cannot reclaim the home later under this statute. Because most residential foreclosures in Arizona are nonjudicial foreclosures, the right of redemption is not commonly exercised.
Chernoff Law handles business and real estate litigation matters throughout Arizona. Contact us by calling 480-719-7307 to discuss your legal matter.