Redemption Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Redemption, written in plain English, along with examples of how it is used.
What is Redemption?
(n) Redemption is the process by which a property, article, right etc sold, issued, mortgaged or otherwise transferred to a person is taken back by re-purchasing, clearing the liabilities or paying the consideration etc as may be required to get the possession back
History and Meaning of Redemption
The term "redemption" originated from the Latin word "redemptio," which means "buying back." In legal terms, redemption refers to the process of buying back or recovering assets or properties that have been sold, transferred, or mortgaged to someone else. Redemption is often used in the context of foreclosures, where homeowners are given a chance to redeem their properties before the foreclosure sale is finalized.
Examples of Redemption
- A homeowner is in danger of foreclosure due to unpaid mortgage payments. The bank informs the homeowner that they have a right of redemption, which allows them to pay off the mortgage debt in full and retain ownership of the property.
- A company has issued bonds to raise capital. If the company wants to retire the bonds early, they can redeem them by paying the bondholders the principal amount plus any accrued interest.
- A government offers tax sale certificates to investors, which are liens against properties whose owners have failed to pay their property taxes. The owner has a right of redemption, which enables them to pay the certificate holder the amount owed plus interest and fees in order to regain ownership of the property.
Legal Terms Similar to Redemption
- Foreclosure: The legal process by which a lender repossesses a property due to a borrower's failure to make loan payments.
- Repossession: The act of taking back property that was used as collateral for a loan in default.
- Forfeiture: The loss of property or assets due to a breach of contract, illegal activity, or a court decision.