2016 -- H 7529

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LC004470

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO PROPERTY - MORTGAGE FORECLOSURE AND SALE

     

     Introduced By: Representatives Edwards, Newberry, and Ajello

     Date Introduced: February 10, 2016

     Referred To: House Judiciary

     (Attorney General)

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 34-27-6 of the General Laws in Chapter 34-27 entitled "Mortgage

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Foreclosure and Sale" is hereby amended to read as follows:

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     34-27-6. Payment of outstanding taxes. -- (a) In connection with any sale by public

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auction made under and according to the provisions of any mortgage of real estate or any power

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of sale contained therein or annexed thereto, if the mortgagee or an affiliate of the mortgagee is

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the successful bidder for the real estate or property offered for sale, the foreclosure deed shall be

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recorded in the records of land evidence for the municipality where the real estate is located

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within forty-five (45) days after the date of the sale. The deed shall be captioned "foreclosure

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deed" and the date of the foreclosure shall be stated in the deed. This subsection (a) shall not

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apply to any such sale if, prior to the recording of the foreclosure deed: (1) the mortgagor files a

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voluntary proceeding, or an order for relief is entered in any involuntary proceeding against the

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mortgagor, under any federal or state bankruptcy or insolvency statute; or (2) the mortgagee

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abandons or otherwise terminates such sale.

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      (b) Notwithstanding any other general law or local ordinance to the contrary, the grantee

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of real estate named in the foreclosure deed shall pay to the municipality, on or before the date

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the foreclosure deed is recorded, all taxes and other assessments, including water charges, interest

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and penalties, if any, which constitute liens on the real estate described in the foreclosure deed

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and which are due and owing on the recording date (collectively, "taxes due and owing");

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provided, however, that a grantee shall not be deemed in violation of this subsection (b) if the

 

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grantee shall apply for a municipal lien certificate from the tax collector for the municipality

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during the forty-five (45) day period ending on the day on which the foreclosure deed is recorded

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and shall pay the taxes due and owing within thirty (30) days after the date on which the

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municipal lien certificate is mailed by the tax collector by the United States mail, postage prepaid,

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certified, return receipt requested, and addressed to the grantee at the address therefor set forth in

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the application for the municipal lien certificate. Taxes due and owing for purposes of this section

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shall include only installments thereof required by law to be paid as of the date the foreclosure

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deed is recorded.

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      (c) Upon a violation of any one or more of the requirements of this section, a penalty

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shall accrue at the rate of forty dollars ($40.00) per month one hundred dollars ($100) per day (in

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the aggregate) for each month day or part thereof during which such violation or violations

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continue. For purposes of determining the penalty due hereunder, a month commences on the day

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on which the first such violation occurs and a new month commences on the same day (or if there

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is no such day, then on the last day) of each succeeding calendar month until all taxes due and

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owing are paid. In the event of a violation of subsection (a), taxes due and owing shall be

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determined as of the date required thereunder for the recording of a foreclosure deed.

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      (d) As used in this section, the term "affiliate" shall mean, with respect to any

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mortgagee, any individual or legal entity that controls, is controlled by or is under common

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control with such mortgagee, and the term "foreclosure deed" shall mean the mortgagee's deed or

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other conveyance of title to the successful bidder at any sale by public auction made under and

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according to the provisions of any mortgage of real estate or any power of sale contained therein

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or annexed thereto.

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     SECTION 2. Chapter 34-27 of the General Laws entitled "Mortgage Foreclosure and

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Sale" is hereby amended by adding thereto the following section:

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     34-27-8. Notice of intention to foreclose. – (a) A mortgagee that serves a notice of

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intention to foreclose on a mortgage on residential property in this state pursuant to this chapter,

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shall file in the land evidence records of the city or town in which the property is located a copy

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of the notice at the same time that the mortgagee serves the notice on the mortgagor of the

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property.

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     (b) A mortgagee who is not a resident of this state shall designate and continuously

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maintain an agent, who is a resident of this state, upon whom service may be made of any

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process, notice, or demand required or permitted by law to be served. The mortgagee's

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designation shall be in writing and it shall include the full name and address of the agent and the

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street address of each property designated to said agent. The mortgagee's designation shall be

 

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filed in the land evidence records of the city or town in which the property is located.

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     (c) A mortgagee in violation of this section shall be subject to a fine of up to one

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thousand dollars ($1,000) per month in violation payable to the municipality.

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     SECTION 3. This act shall take effect on September 1, 2016.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PROPERTY - MORTGAGE FORECLOSURE AND SALE

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     This act would increase the fines for failing to file a foreclosure deed to one hundred

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dollars ($100) per day. The act would also require mortgagees, upon serving a notice of intent to

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foreclose against a mortgagor, to file a copy of that notice in the land evidence records of the city

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or town in which the property is located and designate an agent for service of process within the

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state.

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     This act would take effect on September 1, 2016.

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