On April 23, 2015, Alabama changed its redemption law to allow for a shortened right of redemption period from one (1) year to 180 days for certain residential properties on which a homestead exemption was claimed in the tax year during which the sale occurred. The new law also required the mortgagee to mail a notice of a mortgagor's right to redeem the residential property at least 30 days prior to the foreclosure date by certified mail with proof of mailing. However, many questions remained unanswered after the new law became effective.
- How long was the right of redemption if notice was not provided?
- Was production of the proof of mailing sufficient to satisfy the legal requirement that notice was provided?
- What was the statute of limitation for bringing an action related to sending the notice?
These questions were answered by the Alabama legislature when, in February 2018, it amended Alabama Code Section 6-5-248(h). The new law clarifies that a right of redemption cannot be exercised later than one year after the date of foreclosure even if the required notice was not sent. The new law also provides that possession or production of the proof of mailing of the notice would constitute an affirmative defense to any action related to the notice requirement. Finally, the law specifically limited the time frame in which actions related to the notice requirement can be brought to one year after the date of the foreclosure sale.
The Alabama legislature should be commended for passing this legislation as it will help to avoid piecemeal, and likely conflicting, rulings from courts across the state. We will continue to monitor court filings and any judicial rulings from around the state regarding the right of redemption.