Reviewed by Sep 30, 2020| Updated on
Reclamation is defined as the right to claim a repayment of funds if an invested stock or security is delivered poorly. Reclamation can be controlled in the securities industry by mitigating the securities probability of poor delivery. This can be achieved by switching from the conventional physical method of registering and transferring securities to the new age electronic form.
If the buyer does not honour the purchase agreement or has failed to deliver their part by not paying for the property in question, the seller can initiate the reclamation process.
The seller can either settle by reclaiming the given property or claim repayment in the form of money from the buyer.
Foreclosure is one of the most common examples of reclamation in the real estate sector.
The lending institution can reclaim the ownership of a property if the borrower fails to honour his part of home loan obligations.
Similarly, if an investor learns that the underlying security is not legal or valid, the invested capital can be reclaimed.