Right of Redemption in Tennessee: Foreclosure and Tax Sales

The right of redemption in Tennessee lets a former owner buy back real estate lost through mortgage foreclosure or a delinquent tax sale, but the two paths run on very different clocks. After a mortgage foreclosure, the statutory window is two years, though almost every modern deed of trust waives it. After a tax sale, you get anywhere from 30 days to a full year, depending on how long the property taxes went unpaid before the sale. The first thing to figure out is which of the two situations applies to you, because the deadline, the cost, and the procedure all change with the answer.

Redemption After a Mortgage Foreclosure

Real estate sold to satisfy a debt in Tennessee is redeemable within two years after the sale in three situations: a court-ordered execution sale, a judicial foreclosure decree, or a non-judicial sale under a deed of trust or mortgage.¹ Tennessee is overwhelmingly a deed-of-trust state, so most residential foreclosures are non-judicial power-of-sale proceedings, and the two-year right technically applies to them.

Here is the practical problem. The same statute lets the lender eliminate the right entirely by putting a waiver of the equity of redemption, or similar language, in the deed of trust.¹ Nearly every deed of trust used by Tennessee lenders includes one. Before you assume you can redeem after a foreclosure, pull your loan documents and look for that waiver. If it’s there, the two-year clock never started.

For judicial foreclosures, a court can also extinguish the right by ordering the property sold on a credit of six months to two years and then confirming the sale. Once that confirmation happens, the purchaser’s title is absolute and no redemption is allowed.¹

The statute doesn’t restrict eligibility by property type or acreage. Residential, commercial, or agricultural real estate all qualify, as long as the right hasn’t been waived or eliminated by court order.

Redemption After a Delinquent Tax Sale

Tax sale redemption is governed by a completely separate part of the code, and the window is not a flat one year. The court sets the redemption period before the auction, based on how long the taxes had been delinquent:

Five years or less of delinquency: one year from the order confirming the sale.
More than five but less than eight years: 180 days from the confirmation order.
Eight years or more: 90 days from the confirmation order.

If the court makes a specific finding under a separate provision of the statute, the redemption period drops to 30 days from the confirmation order.² The court fixes the applicable period parcel by parcel, and it will usually appear in the order confirming the sale. If you lost property at a tax sale, that order is the document to find first. It tells you exactly how many days you have.

The tiered structure matters. A homeowner who fell behind for a year or two has a full year to redeem. Someone whose taxes went unpaid for a decade may have only 90 days.

What It Costs to Redeem

For a tax sale, you pay the clerk of the court that conducted the sale. The total includes the purchase price paid at auction, any delinquent taxes, interest, and penalties, court costs and court-ordered charges, and interest at 10% per year on the entire purchase price running from the date of the sale.³ The court may also order reimbursement for additional expenses the buyer incurred to preserve the property, and the purchaser has the burden of showing those costs were genuinely necessary rather than optional improvements.

That 10% adds up quickly. On a $15,000 purchase price, ten months of interest alone runs about $1,250, on top of everything else. Tennessee statutes don’t provide for installment payments in tax sale redemptions; plan on paying the full amount before the redemption is finalized.

For a mortgage foreclosure redemption under Title 66, Chapter 8, the former owner generally has to reimburse the sale purchaser for the price paid, plus applicable interest and costs. If the two sides disagree on what’s owed, a court can resolve the amount. Because the two-year right is waived in most deeds of trust, the payment mechanics get less attention in reported cases than tax sale redemptions do.

How to File for Tax Sale Redemption

Redeeming after a tax sale starts with a motion filed in the court that conducted the sale. You must serve a copy on the tax sale purchaser, on any subsequent grantees of the purchaser’s interest, and on all other interested parties as of the filing date. Service follows the Tennessee Rules of Civil Procedure for pleadings that don’t assert new claims.²

When someone other than the original debtor is redeeming, such as an heir or transferee, the motion has to be served on the purchaser and all interested persons no fewer than 30 days before the hearing date.⁴ Anyone claiming an ownership interest who wants to participate in the hearing must also record the relevant document, abstract, or affidavit of heirship with the county register of deeds at least 30 days before the hearing.

Missing these deadlines isn’t a minor slip. Failure to file within the redemption window, or to serve proper notice, forfeits the right entirely, and courts enforce the timelines strictly. If you’re near the end of the period, treat the deadline as absolute.

Who Can Redeem Besides the Former Owner

The former owner holds the primary right, but a few other parties can act too.

Heirs and Personal Representatives

If the original owner has died, heirs or personal representatives may exercise the right. For tax sale redemptions, an heir needs to record an affidavit of heirship with the county register of deeds before the hearing deadline to establish standing.⁴

Lienholders

Mortgage lenders and judgment creditors with a recorded lien on the property may also have redemption rights. A lienholder who redeems takes ownership but still holds the underlying debt, so the practical result is often a second foreclosure to recover what’s owed. When the former owner doesn’t act and the lien would otherwise be wiped out by the sale, a lienholder has real financial reason to step in.

Transferees and the Anti-Speculation Rule

Tennessee allows the redemption right to be transferred to a third party, with an important guardrail. When a transferee files to redeem after a tax sale, the court must deny the motion if the purchaser or another interested party objects and the transferee appears to be engaged in speculation or profiteering. Speculation is presumed if the transfer price was less than the tax sale purchase price minus what the debtor would have owed to redeem.² The rule makes it risky for investors to buy redemption rights cheaply from distressed former owners and flip properties.

Bankruptcy and the Redemption Clock

Filing for bankruptcy can extend the time available to redeem. Under federal law, if a state-law deadline for curing a default or performing a similar act hasn’t expired before the petition is filed, the trustee or debtor gets at least 60 days after the order for relief to act, even if the state deadline would have expired sooner.⁵ For actions that count as commencing a lawsuit rather than curing a default, the extension can run as long as two years.

The automatic stay triggered by a bankruptcy filing also pauses most collection and enforcement activity against the debtor’s property. Whether the stay freezes the redemption clock outright is more complicated and depends on the chapter of bankruptcy and how the court reads the intersection of state redemption law with the federal stay.⁶ If bankruptcy is on the table as a way to preserve redemption rights, talk to an attorney before the state deadline runs. Timing is decisive.

Tax Consequences to Watch For

Redemption changes more than ownership. It can shift federal tax reporting in ways people don’t expect.

When a lender acquires property at a foreclosure sale, Form 1099-A reporting is based on the later of the sale date or the date the borrower’s redemption right expires.⁷ A successful redemption before that expiration date may change how the transaction is reported. Review any 1099-A you receive to make sure it reflects what actually happened.

If a lender forgives part of the debt during the process, the canceled amount is generally taxable as income. On recourse debt where the property’s fair market value was less than the balance owed, the gap can produce cancellation-of-debt income you must report. Exclusions for insolvency or bankruptcy may apply, but the qualified principal residence indebtedness exclusion expired at the end of 2025 and is not available for discharges in 2026.⁸

Restoring Title on the Public Record

Paying the money is not the last step. For tax sales, the clerk of the court that conducted the sale receives the redemption payment and disburses it to the purchaser and other entitled parties.³ Once the court is satisfied that everything is in order, title has to be formally restored, typically by recording a new deed or certificate of redemption with the county register of deeds. Until that recording happens, the public land records still show the sale purchaser as owner, which will create problems if you try to sell, refinance, or insure the property. Get the recording done promptly after the court confirms the redemption.

1
Justia Law. Tennessee Code 66-8-101 – Right of Redemption
2
Justia Law. Tennessee Code 67-5-2701 – Procedure for Redemption of Property Sold for Taxes
3
Justia Law. Tennessee Code 67-5-2704 – Notice to Purchaser, Contents, Procedure
4
Justia Law. Tennessee Code 67-5-2702 – Hearing on Motion
5
Office of the Law Revision Counsel. 11 U.S. Code 108 – Extension of Time
6
Office of the Law Revision Counsel. 11 U.S. Code 362 – Automatic Stay
7
Internal Revenue Service. Instructions for Forms 1099-A and 1099-C (Rev. April 2025)
8
Internal Revenue Service. Publication 4681 – Canceled Debts, Foreclosures, Repossessions, and Abandonments