Duhaime's Law Dictionary


Redemption Definition:

Reverting title to property.

Related Terms: Foreclosure

A right of redemption gives the vendor the right to buy back the property.

A corporation may buy back (redeem) shares it had issued.

In some jurisdictions where a mortgage transfers title to the lender until the mortgage is paid off, the "buying back" of the property is known as redemption.

Note these unusual but insightful words of Justice Bramwell in the 1892 House of Lords case, Salt v. Marquess of Northampton:

"Of course, one knows in a general, if not in a critical way, what is an equity of redemption. It is a right not given by the terms of the agreement between the parties to it, but contrary to them, to have back securities given by a borrower to a lender, I suppose one may say by a debtor to a creditor, on payment of principal and interest at a day after that appointed for payment, when by the terms of the agreement between the parties the securities were to be the absolute property of the creditor. This is now a legal right in the debtor. Whether it would not have been better to have held people to their bargains, and taught them by experience not to make unwise ones, rather than relieve them when they had done so, may be doubtful. We should have been spared the double condition of things, legal rights and equitable rights, and a system of documents which do not mean what they say. But the piety or love of fees of those who administered equity has thought otherwise. And probably to undo this would be more costly and troublesome than to continue it."

REFERENCES:

  • Salt v. Marquess of Northampton, [1892] A.C. 1

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