Conveyance and Mortgage of Immovables – Sale with right of redemption

Conveyance and Mortgage of Immovables – Sale with right of redemption

Art. 2567. 1 Right of redemption, definition. The parties to a contract of sale may agree that the seller shall have the right of redemption, which is the right to take back the thing from the buyer.

Revision Comments-1993. (b) A sale with a right of redemption is distinguishable from a sale with the option to repurchase. While the intent of the parties controls the classification of the transaction as redemption or option-see Delcambre v. Dubois, 263 So.2d 96 (La.App. 3d Cir. 1972)-in the usual sale subject to redemption, the vendor must reserve the right to-repurchase. If, on the contrary the right to repurchase is granted by the vendee, the contract is a sale with option to repurchase and not a sale with a right of redemption. See Culpepper’s dissent in Delcambre v. Dubois, (supra), at 107; Glover v. Abney, 160 La. 175, 106 So. 735 (1925). In Pitts v. Lewis, 7 La.Ann. 552 (1852), the court stated: It is elementary that there is no vente a remere unless the right to take back the property, on refunding the price, be stipulate d in the act of sale, so as to form one of the reservations of it, and that if it is appended by a subsequent act to a sale originally pure and simple, it is either a resale or a promise to sell. 7 La. Ann. 552, at pp. 552-553.

(c) The exercise of redemption does not involve a new sale. When the right to redeem is exercised it effects a dissolution of the sale and of the transfer of the property which was the consequence of it. See 2 Planiol et Ripert, Traite elementaire de droit civil, § 1582 (1959) (English translation by the Louisiana State Law Institute).

(d) The price of redemption or remere of the property sold may be higher or lower than the purchase price paid by the original vendee. See 2 Planiol et Ripert, Traite elementaire de droit civil, § 1579 (1959) (English translation by the Louisiana State Law Institute). Thus in a highly inflationary period contracting for a higher price might be very realistic, since it would tend to protect the buyer’s investment against inflation.

Art. 2568. Limitation on duration. The right of redemption may not be reserved for more than ten years when the thing sold is immovable, or more than five years when the thing sold is movable. If a longer time for redemption has been stipulated in the contract that time must be reduced to either ten or five years, depending on the nature of the thing sold.

Revision Comments-1993. (b) Under this Article, if no delay for the exercise of redemption is stipulated, the right is presumed to last the maximum time allowed by law. Delcambre v. Dubois, 263 So.2d 96 (La.App. 3d Cir. 1972).

(c) Under this Article, the running of the period allowed for redemption is not subject to suspension or interruption. See C.C. art. 2571, infra.

Art. 2570. Effect of failure to exercise right within time stipulated. If the seller does not exercise the right of redemption within the time allowed by law, the buyer becomes unconditional owner of the thing sold.

Art. 2571. Application of time limit against all persons including minors The period for redemption is preemptive and runs against all persons including minors. It may not be extended by the court.