Pursuing Your Right Of Redemption
After years of disruption in the housing market, homes are going on sale in the wake of tax and HOA foreclosures. Many potential buyers are leery of buying, fixing up and even occupying these homes because they are afraid the original owners will exercise their legal right of redemption — buying the house back long after they lost it.
There are periods of redemption for both Tax foreclosures and HOA foreclosures. Once a former owner is outside the period of redemption, they will loose the right to redeem. Sometimes the properties are sold for more than what is owed in taxes or HOA fees. We call these excess proceeds and they may be available for the former owner to use to help redeem the property. When a home is foreclosed by a homeowners association, there is a short redemption window. These situations do occur, so buyers should beware of the possibility of redemption. Our lawyers can advise you on this.
We recommend, in tax and homeowners association cases, that a buyer of a foreclosed property refrain from investing money in it until any rights of redemption have expired.
Resolving Legal Problems Beyond Right Of Redemption
Other legal problems may be present when purchasing a foreclosed home. The seller is not obliged under Texas law to provide you with disclosures about the condition of the property, as are required in other home sales. You will have no leverage to require the seller to make repairs to the property. Foreclosed homes are typically sold on an “as is” basis. Because of this, you must take care to ensure that the previous homeowners do not cause mischievous damage to the property.
Buying a foreclosed home is one way the economy refreshes itself. But there are legal dangers involved in the process. Our real estate lawyers can advise you on how to minimize your risk as you seek bargains in a strife-torn market.