Today’s daf TB Baba Metzia 35 discusses the laws of foreclosure and redemption of property. When a borrower defaults on a loan, the court forecloses on the property and gives it to the lender as payment for the loan. How much time does the borrower have to redeem his property after is foreclosed?
“With regard
to the reversal of an appraisal, the Sages of Neharde’a say: After
property is repossessed in order to pay an unpaid debt based on the court’s appraisal
of the article’s value, it is returned to the debtor, provided he repays
the debt from the time of the appraisal until the twelve months of the
year have passed. And Ameimar said: I am from Neharde’a, and
nevertheless, I hold that repossession based on an appraisal of
an article’s value can always be returned. If the debtor pays his
debt, he can reclaim his property at any point. The Gemara rules: And the halakha
is that repossession based on an appraisal can always be returned,
due to the fact that it is stated: “And you shall do that which is right
and good” (Deuteronomy 6:18). The owner of property appreciates his
property more than another person would. Therefore, once the debtor repays his
debt to the creditor, legal formalism should not prevent return of the debtor’s
property.” (Sefaria.org translation) The
repossession based on an appraisal can always be returned even after many years.
(See Shulkhan Arukh Khoshen Mispat 103:9)
Ramban’s commentary
on “And you shall do that which is right and good” (Deuteronomy 6:18)
explains why there is no statute of limitation. “The intent of this is as
follows: At first he [Moses] stated that you are to keep His statutes and His
testimonies which He commanded you, and now he is stating that even where He
has not commanded you, give thought, as well, to do what is good and right in
His eyes, for He loves the good and the right. Now this is a great principle,
for it is impossible to mention in the Torah all aspects of man’s conduct with
his neighbors and friends, and all his various transactions, and the ordinances
of all societies and countries. But since He mentioned many of them — such as, Thou
shalt not go up and down as a talebearer; Thou shalt not take vengeance,
nor bear any grudge; neither shalt thou stand idly by the blood of thy
neighbor; Thou shalt not curse the deaf; Thou shalt rise up
before the hoary head and the like — he reverted to state in a general way
that, in all matters, one should do what is good and right, including even
compromise and, going beyond the requirements of the law.” (Sefaria.org translation)
The Gemara
then provides four different case studies. I shall summarize them.
Case #1 Person A is the borrower who defaults on
his loan.
Person B is the lender who forecloses on Person A. But
Person B owes money to Person C.
Person C forecloses on Person B and takes Person A’s property.
Person A may always redeem his property from Person C.
Case #2 After the foreclosure, the lender sells, gives as an
inheritance, or gives as a gift, the borrower can no longer redeem that property.
Case #3 When a woman’s property is foreclosed and then she marries
and dies, “since the legal status of a husband with regard to his wife’s
property is that of a buyer, he does not return property that was
appraised and repossessed to pay his wife’s debt. And we do not return to
him property that was repossessed from his wife if he pays her debt.”
(Sefaria.org translation)
Case #4 The borrower and the lender settle out of court. The lender
gives his property as payment for his debt. Because the case never went to
court, there was never a foreclosure. The Gemara records a disagreement whether
or not the borrower can redeem this property.
By the way, New York law doesn’t provide a redemption period
for foreclosed homeowner’s property. I’ve also learned that Florida allows a 10-day
grace period to redeem foreclosed property.
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