Alabama law currently provides that real property sold at a foreclosure or execution sale may be redeemed up to one year after the sale date. This one-year redemption period is set to change, however, for certain residential properties. Recent legislation passed by the Alabama Legislature shortens the redemption period to 180 days “for residential property on which a homestead exemption was claimed in the tax year during which the sale occurred.” For all other properties, the one-year redemption period remains in effect.
In addition to shortening the redemption period, Act 2015-79 establishes additional notice requirements for a foreclosure of homestead property. The Act requires a mortgage holder to provide the following notice to the mortgagor by certified mail to the property address at least 30 days prior to the foreclosure sale:
Alabama law gives some persons who have an interest in property the right to redeem the property under certain circumstances. Programs may also exist that help persons avoid or delay the foreclosure process. An attorney should be consulted to help you understand these rights and programs as a part of the foreclosure process.
This language must also be included in the foreclosure notice that is published in the newspaper. Failure to provide this notice will not affect the validity of the foreclosure sale, but the 180-redemption period will not begin to run until the notice is provided.
The Act has an effective date of January 1, 2016, but it does not apply to “[s]ales made under a power of sale contained in any mortgage or junior mortgage dated prior to the effective date.” Out of an abundance of caution, foreclosing creditors may want to provide the statutory notice for all foreclosures of homestead property after January 1, 2016, regardless of when the mortgage is dated. They may also consider providing the notice before foreclosing on any residential property, not just a homestead property. If for no other reason, this would allow foreclosing creditors to utilize a single, uniform approach for all non-commercial foreclosures.