by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
randolphp@umkc.edu

Statutory redemption law is an arcane and mysterious topic, like unto Torrens recording systems, to many lawyers. But out in the midwest and northwest farm country, it's the mother's milk of the small town lawyer who has failed to land the local bank as a client. Redemption statutes have demonstrated remarkable tenacity over the past century, despite constant criticism that they add to foreclosure costs, encourage waste and chicanery, and generally fail to serve their designed purpose. Here's a recent court interpretation that treats such a statute tenderly.

MORTGAGES; STATUTORY REDEMPTION: Foreclosure redemption statutes are to be liberally construed. When there is no prejudice to the other parties, substantial compliance with the redemption statutes is sufficient to effect a redemption. Savoy v. Cascade County Sheriff's Department, 887 P.2d 160 (Mont. 1994). The defect here was the failure of the redemptioner to file information concerning the nature and amounts of its own secured claims. The court held that this was not fatally defective because the information was useful only to the then holder of the sale certificate and then only if that holder intended to "reredeem" from the redemptioner.

The missing information, in the view of the court, was readily available to the certificate holder because it had the record information concerning the mortgages from the foreclosure decree and it had the phone number of the redemptioner. It made no effort to reredeem during the sixty day period following the redemptioner's redemption. Consequently, the court holds, "no harm, no foul."

Comment: One interesting aspect of the case is the court's finding that the ability to call the redemptioner's office to get information is the equivalent of having a written statement of the information. This is really an extraordinary statement. Anything said over the phone could later be denied, and hardly has the force of a written statement in an officially required document. The court may have been influenced by the fact that the redemptioner was FmHA.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last five years, these Reports annually have been collated, updated, indexed and bound into the Annual Survey of Developments in Real Estate Law, volumes 1-5, published by the ABA Press. The Annual Survey volumes are available for sale to the public. Contact Shawn Kaminsky at the ABA. (312) 988 5260. Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

Items reported in the Daily Development and in the ABA publications are for general informatinon purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. Items in the Daily Development are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.