Chapter
534
2006 -- S 2092 SUBSTITUTE A AS AMENDED
Enacted 07/10/06
A N A
C T
RELATING TO TAX SALES
Introduced By: Senators
Metts, Pichardo, Sheehan, and Perry
Date Introduced: January
17, 2006
It is
enacted by the General Assembly as follows:
SECTION
1. Section 44-5-73 of the General Laws in Chapter 44-5 entitled "Levy and
Assessment
of Local Taxes" is hereby amended to read as follows:
44-5-73.
Authority granted to city and town collector's to assign and transfer tax
liens
in bulk. – Authority
granted to city and town collectors to sell, assign and transfer tax
liens
and tax titles in bulk. -- (a)
Notwithstanding any of the provisions of chapter 9 of this title,
any city
or town may by resolution of its legislative body authorize its collector to sell
and assign
for
consideration to the Rhode Island housing and mortgage finance corporation
pursuant to
section
44-9-8.3 of the general laws, any and
all liens for taxes assessed against any person in the
city
or town owner-occupied residential
property of three (3) units or less on real estate as
constituted
pursuant to section 44-9-1. together with the right to receive the
taxes, penalties, and
other
charges secured by the lien, and to sell and assign any real estate liable for
overdue taxes
and
deliver a collector's deed granting tax title thereto, and to sell and assign
any other tax titles
on
owner-occupied residential property of three (3) units or less previously
acquired by the city or
town.
Sections 44-9-8 and 44-9-9 of the general laws shall not apply to the sale,
assignment and
transfer
of real estate liable for overdue taxes pursuant to section 44-5-73.
(b) The cities and towns may make regulations for the possession, management
and sale
or
assignment, either individually or in bulk, of land purchased or taken for
taxes, not inconsistent
with law
or the right of redemption.
(c)
The minimum sum paid for the assignment of any tax lien may not be less than
the tax
due,
plus accrued interest and expenses of collection or at a rate which may be
discounted to
reflect
uncollectible factors.
(c) (d) The collector of any city or town holding a tax title may
assign and transfer the
tax
title, individually or in bulk, with other tax titles, either by public auction
to the highest bidder
or by
direct sale., provided that the
(e)
After complying with the provisions of section 44-9-8.3, the minimum sum
paid for
the
assignment is of a tax title may not be less than the total
amount necessary for the redemption
of each
individual tax title sold and assigned or at a rate which may be
discounted to reflect
uncollectible
factors.
(d) (f) The collector may execute and deliver on behalf of the
city or town any
instrument
necessary therefore in connection with the sale and assignment of the
tax liens or tax
titles,
including, but not limited to, purchase and sale agreements, servicing
agreements and trust
agreements and accept on behalf of the city or town appropriate
consideration pursuant to the
regulations.
(e) (g) The assignee or assignees of the liens or tax
titles shall have and possess the same
powers
and rights at law and in equity as the city or town collector would have if the
lien had not
been
assigned with regard to the collection of taxes, the precedence and
priority of the lien, the
accrual
of interest and the fees and expenses of collections and the exemption from
liability for
enforcement
or penalties arising from violations of environmental or minimum housing
standards.
; and
(f) (h) The assignee has the same rights to enforce the liens as
any private party holding a
lien on
real property.
SECTION
2. Chapter 44-9 of the General Laws entitled "Tax Sales" is hereby
amended
by adding
thereto the following section:
44-9-8.3.
Sale of owner-occupied residential property to housing agency. – (a)
Where
the
property subject to tax sale is owner-occupied residential and contains three
(3) or less units,
the
Rhode Island Housing and Mortgage Finance Corporation shall have a right of
first refusal to
acquire
the tax lien at tax sale, and may assist the owner to discharge the lien or
take title and
acquire
the property in its own name pursuant to regulations to be developed by the corporation,
consistent
with its purposes. The corporation shall notify the collector of its intention
to exercise
this
right by the later of: (i) thirty (30) days from its receipt of the certified
mail notice set forth in
section
44-9-10; or (ii) ten (10) days before the date of sale or any adjournment of
the sale.
Failure
of the corporation to notify the collector as provided herein shall extinguish
the right of
first
refusal provided in this section.
(b)
There shall be an advisory board consisting of six (6) members: one person
appointed
by
the Rhode Island League of Cities and Towns; one person appointed by the
Consumer Credit
Counseling
Services of Rhode Island; one person appointed by Rhode Island Legal Services;
one
person
appointed by the Housing Network of Rhode Island, one appointed by the Urban
League
of
Rhode Island and one appointed by the Center for Hispanic Policy and Advocacy.
The
advisory
committee shall provide advice and recommendations to the governing board of
the
Rhode
Island Housing and Mortgage Finance Corporation regarding that corporation's
activities
under
this section. The members of the advisory board shall receive no compensation
for the
performance
of their duties, but may be reimbursed for reasonable expenses incurred in
carrying
out
their duties.
SECTION
3. Sections 44-9-10, 44-9-11, 44-9-12, 44-9-25 and 44-9-27 of the General
Laws in
Chapter 44-9 entitled "Tax Sales" are hereby amended to read as
follows:
44-9-10.
Notice of sale to taxpayer. -- (a) Whether or not the person or general
partnership
to whom the estate is taxed as of December 31st prior to the tax sale is a
resident of
this
state, the collector shall, in addition to the foregoing, notify the taxpayer
of the time and place
of sale first
by first-class mail not less than ninety (90) days before the date of sale or
any
adjournment
of the sale, and again by certified mail not less than forty (40) days before
the date
of
sale or any adjournment of the sale, either
by registered or certified mail sent postpaid to the
street
address of the real estate liable for payment of taxes, and, if different, to
the taxpayer's
address
listed with the tax assessor's office of the city or town where the real estate
is located or
to any
other address which the taxpayer designates by written notice to the tax
assessor, or to the
address
of the taxpayer stated on the deed recorded in the land evidence records of the
city or
town where
the real estate is located or to the last known address of the taxpayer not
less than
twenty
(20) days before the date of sale or any adjournment of the sale, or be left at the taxpayer's
last known
address or personally served on the taxpayer not less than twenty (20) thirty
(30) days
before
the date of sale or any adjournment of the sale, but no notice of adjournments
shall be
necessary
other than the announcement made at the sale. Copies of such notices shall
also be sent
or
hand delivered at the same time as prescribed above, to the Rhode Island
Housing and
Mortgage
Finance Corporation. Failure to notify the Rhode Island Housing and Mortgage
Finance
Corporation as prescribed herein shall nullify any tax sale of any property
with respect to
which
such notice was not given.
(b) Persons aged sixty-five (65) years and over or persons suffering from a
disability
may
designate a third party to whom notice may be sent as required pursuant to this
section by
advising
the tax assessor of the name and address of the person.
(c) If the estate taxed is a corporation, the notice may be sent either by
registered or
certified
mail to its place of business or left at the business office of the corporation
with some
person
employed there.
(d) In the event the person to whom the estate is taxed is listed in the
records of the
assessor
and/or collector as having applied for and been granted a property tax
abatement based
wholly
or partially on the age of the taxpayer, then the collector shall also notify
the department
of
elderly affairs by registered or certified mail or hand delivery postage
prepaid not less than
twenty
(20) days before the date of the sale.
as described herein. Failure to notify the department
of
elderly affairs as prescribed herein shall not affect the validity of
a tax sale. nullify any tax sale
of
any property with respect to which such notice was not given.
(e)
Within ninety (90) days after the end of each calendar year, the department of
elderly
affairs
shall prepare and submit an annual report to the governor, the speaker of the
house of
representatives,
the president of the senate and the secretary of state. The report shall
contain
information
concerning the number of notices received by the department of elderly affairs
pursuant
to this section of law during the calendar year, and information concerning the
identity
of
the specific parcels that might be sold in each city or town as well as a description
of exactly
what
action followed on each such notice. The report shall conclude by indicating
the present
status
of each case in which the department received such a notice as well as an
indication as to
whether
each such case is open or closed.
44-9-11.
Notice to mortgagees and other parties in interest. -- (a) In case the
collector
shall
advertise for sale any property, real, personal, or mixed, in which any person
other than the
person
to whom the tax is assessed has an interest, it shall not be necessary for the
collector to
notify
the interested party, except for the following interested parties, provided
that their interest
was of
record at least ninety (90) days prior to the date set for the sale: the
present owner of
record,
mortgagees of record and mortgage assignees of record, former fee holders whose
right to
redeem
has not been foreclosed, holders of tax title, federal agencies having a
recorded lien on the
subject
property, holders of life estates of record, and vested remainder whose
identity can be
ascertained
from an examination of the land or probate records of the municipality
conducting the
sale,
and/or their assignees of record who shall be notified by the collector either
by registered or
certified
mail sent postpaid not less than twenty (20) days before the date of sale or
any
adjournment
of the sale, to an agent authorized by appointment or by law to receive service
of
process,
or to the address of the party in interest set forth in the recorded mortgage
document or
the
recorded assignment, or to the last known address of the party in interest, but
no notice of
adjournments
shall be necessary other than the announcement made at the sale. The posting
and
publication
of the notice of the time and place of sale in the manner provided by section
44-9-9
shall be
deemed sufficient notice to all other interested parties. This provision shall
apply to all
taxes
levied prior to and subsequent to 1896. This provision shall be subject to
the notice
requirements
of section 44-9-10. It shall not be necessary, however, to provide the names of
the
mortgagees
and other parties in interest under this section to the Rhode Island Housing
and
Mortgage
Finance Corporation or to the department of elderly affairs.
(b) Only a person or entity failing to receive notice in accordance with the
provisions of
this
section and sections 44-9-9 and 44-9-10 shall be entitled to raise the issue of
lack of notice or
defective
notice to void the tax sale. The right to notice shall be personal to each
party entitled to
it and
shall not be asserted on behalf of another party in interest. If there is a
defect in notice, the
tax sale
shall be void only as to the party deprived of adequate notice, but shall be
valid as to all
other parties
in interest who received proper notice of the tax sale.
(c) Once a petition is filed under section 44-9-25, and any party in interest
entitled to
notice
of the tax sale receives actual notice of the pendency of the petition to
foreclose, the party
must
raise the notice defense in accordance with the provisions of section 44-9-31
or be estopped
from
alleging lack of notice in any action to vacate a final decree entered in
accordance with
section
44-9-30.
44-9-12.
Collector's deed -- Rights conveyed to purchaser -- Recording. -- (a)
The
collector
shall execute and deliver to the purchaser a deed of the land, stating the
cause of sale,
the
price for which the land was sold, the places where the notices were posted,
the name of the
newspaper
in which the advertisement of the sale was published, and the residence
of the grantee,
and
if notice of the sale was given to the Rhode Island Housing and Mortgage
Finance
Corporation
and or to the department of elderly affairs under the provisions of section
44-9-10,
the
collector shall include an affirmative certification as to which
entity/entities received notice
and
the date(s) on which each such notice was given which shall set forth in the
collector's deed.
The deed
shall convey the land to the purchaser, subject to the right of redemption. The
conveyed
title
shall, until redemption or until the right of redemption is foreclosed, be held
as security for
the
repayment of the purchase price, with all intervening costs, terms imposed for
redemption,
and
charges, with interest, and the premises conveyed, both before and after either
redemption or
foreclosure,
shall also be subject to and have the benefit of all easements and restrictions
lawfully
existing
in, upon, or over the land or appurtenant to the land. The deed is not valid
against
intervening
interests unless recorded within sixty (60) days after the sale. If the deed is
recorded it
is prima
facie evidence of all facts essential to the validity of the title conveyed by
the deed. It
shall be
the duty of the collector to record the deed within sixty (60) days of the sale
and to
forward
said deed promptly to the tax sale purchaser. The applicable recording fee
shall be paid
by there
deeming party. Except as provided, no sale shall give to the purchaser any
right to either
the
possession, or the rents, or profits of the land until the expiration of one
year after the date of
the
sale, nor shall any sale obviate or transfer any responsibility of an owner of
property to
comply
with any statute of this state or ordinance of any municipality governing the
use,
occupancy,
or maintenance or conveyance of property until the right of redemption is
foreclosed.
The
rents to which the purchaser shall be entitled after the expiration of one year
and
prior
to redemption shall be those net rents actually collected by the former fee
holder or a
mortgagee
under an assignment of rents. Rents shall not include mere rental value of the
land, nor
shall
the purchaser be entitled to any rent for owner-occupied single-unit
residential property. For
purposes
of redemption, net rents shall be computed by deducting from gross rents
actually
collected
any sums expended directly or on behalf of the tenant from whom the rent was
collected.
Such expenditure shall include utilities furnished, repairs made to the
tenanted unit, and
services
provided for the benefit of the tenant. However, mortgagee payments, taxes and
sums
expended
for general repair and renovation (i.e. capital improvements) shall not be
deductible
expenses
in the computation of the rent.
(b) This tax title purchaser shall not be liable for any enforcement or
penalties arising
from
violations of environmental or minimum housing standards prior to the
expiration of one
year
from the date of the tax sale, except for violations which are the result of
intentional acts by
the tax
sale purchaser or his or her agents.
(c) Upon the expiration of one year after the date of the sale, the tax title
holder shall be
jointly
and severally liable with the owner for all responsibility and liability for
the property and
shall be
responsible to comply with any statute of this state or ordinance of any
municipality
governing
the use, occupancy, or maintenance or conveyance of the property even prior to
the
right of
redemption being foreclosed. Nothing in this section shall be construed to
confer any
liability
upon a city or town, which receives tax title as a result of any bids being
made for the
land
offered for sale at an amount equal to the tax and charges.
(d)
In the event that the tax lien is acquired by the Rhode Island Housing and
Mortgage
Finance
Corporation, and said corporation has paid the taxes due, title shall remain
with the
owner
of the property, subject to the right of the corporation to take the property
in its own name,
pursuant
to applicable statutes and any regulations duly adopted by the corporation.
Upon such
notice
by the corporation, the collector shall execute and deliver a deed to the
corporation as
herein
provided.
44-9-25.
Petition for foreclosure of redemption. -- (a) After one year from a
sale of
land for
taxes, except as provided in sections 44-9-19 -- 44-9-22, whoever then holds
the acquired
title
may bring a petition in the superior court for the foreclosure of all rights of
redemption under
the
title. The petition shall set forth a description of the land to which it
applies, with its assessed
valuation,
the petitioner's source of title, giving a reference to the place, book, and
page of record,
and
other facts as may be necessary for the information of the court. Two (2) or
more parcels of
land may
be included in any petition brought by any purchaser of a title or titles, if
the parcels are
in the
same record ownership at the time of bringing the petition (Form 5).
(b) No more than one foreclosure petition may be filed for each tax deed regardless
of
the
number of tax title holders having an interest under such deed. If more than
one petition is
filed,
the petitions shall be consolidated for hearing by the court. The court shall
not award more
than one
attorneys' fee to the petitioners.
(c)
Notwithstanding the provisions of subsection (a) of this section, no petition
for
foreclosure
of redemption shall be filed or entertained by any court with respect to any
property
or
title acquired by the Rhode Island Housing and Mortgage Corporation pursuant to
section 44-
9-8.3
of the general laws until after five (5) years from the sale of said property
or title for taxes.
44-9-27.
Examination of title -- Notice to interested parties of foreclosure petition.
--
(a) Upon
the filing of a petition, the petitioner shall, at his or her own cost, select,
with the
approval
of the court, a title company or an attorney familiar with the examination of
land titles.
This
company or attorney shall make an examination of the title sufficient only to determine
the
persons
who may be interested in the title, and the petitioner shall, upon the filing
of the
examiner's
report, notify all persons appearing to be interested, whether as equity
owners,
mortgagees,
lienors, attaching creditors, or otherwise, as well as the tax collector in the
municipality
where the subject property is located, of the pendency of the petition, the
notice to
be sent
to each by registered or certified mail and return of receipt required. In
the event that any
item
mailed by certified mail is returned unopened, the petitioner shall send that
notice to the
addressee
at the same address by first class regular mail, postage prepaid, and also, if
the subject
property
is residential, petition the court for leave to serve the addressee by tacking
said notice to
the
front door of the subject property.
Other and further notice by publication or otherwise shall
be given
as the court may at any time order.
(b) The notice, to be addressed "To all whom it may concern," shall
contain the name of
the
petitioner, the names of all known respondents, a description of the land, and
a statement of
the
nature of the petition, shall fix the time when appearance may be entered, and
shall contain a
statement
that, unless the notified party shall appear within the fixed time, a default
will be
recorded,
the petition taken as confessed, and the right of redemption forever barred
(Form 6).
SECTION
4. Sections 44-9-8.2, 44-9-24 and 44-9-43 of the General Laws in Chapter 44-
9 entitled
"Tax Sales" are hereby amended to read as follows:
44-9-8.2.
Deed of taking. -- The instrument of taking shall be under the hand and
seal of
the
collector and shall contain a statement of the cause of taking, a substantially
accurate
description
of each parcel of land taken, the name of the person to whom the tax was
assessed, the
amount
of the tax, and the incidental expenses and costs to the date of taking.,
and if notice of the
sale
was given to the Rhode Island Housing and Mortgage Finance Corporation and/or
to the
department
of elderly affairs under the provisions of section 44-9-10, an affirmative
certification
as to
which entity received notice and the date(s) on which each such notice was
given shall be
set
forth in the instrument. This
instrument of taking is not valid unless recorded within sixty (60)
days of
the date of taking. If recorded, it is prima facie evidence of all facts
essential to the
validity
of the title taken. Title to the land taken shall vest in the city or town,
subject to the right
of
redemption. The title shall, until redemption or until the right of redemption
is foreclosed, be
held as
security for the repayment of the taxes with all intervening costs, terms
imposed for
redemption,
and charges, with interest. The premises taken, both before and after either
redemption
or foreclosure, is also subject to and has the benefit of all easements and
restrictions
lawfully
existing in, upon or over the land or appurtenant to the land, and all
covenants and
agreements
running with the premises either at law or in equity, when taken.
44-9-24.
Title absolute after foreclosure of redemption -- Jurisdiction of
proceedings.
-- The title conveyed by a tax
collector's deed shall be absolute after foreclosure of
the
right of redemption by decree of the superior court as provided in this
chapter.
Notwithstanding
the rules of civil procedure or the provisions of chapter 21 of title 9, no
decree
shall be
vacated except in a separate action instituted within one year following entry
of the
decree
and in no event for any reason, later than one year following the entry of
decree.
Furthermore,
the action to vacate shall only be instituted for inadequacy of notice of
the petition
amounting
to a denial of due process or for the invalidity of the tax sale because the
taxes for
which
the property was sold had been paid or were not due and owing because the
property was
exempt
from the payment of such taxes. The
superior court shall have exclusive jurisdiction of
the foreclosure
of all rights of redemption from titles conveyed by a tax collector's deed, and
the
foreclosure
proceedings shall follow the course of equity in a proceeding provided for in
sections
44-9-25
-- 44-9-33.
44-9-43.
Refund of purchase price when title based on collector's sale, treasurer's
assignment,
or sale without foreclosure adjudged invalid. -- If, as the result of a petition, the
petitioner's
title based on a collector's sale, treasurer's assignment, or sale without
foreclosure is
determined
to be invalid by the superior court because of errors or irregularities in the
tax
proceedings
upon which it was based, the clerk, upon request, shall issue a certificate to
that
effect.
The treasurer of the city or town where the land affected by the title is
situated, upon
receipt
of a deed from the petitioner conveying all of the interest which he or she may
have under
it,
together with the certificate, shall refund to the holder the amount paid, but
not exceeding the
amount
received by the city or town therefore
plus statutory interest at the rate of one percent
(1%)
per month from the date of payment until the date of refund, notwithstanding
the provisions
of
section 45-15-5. The taxing authority may recover any interest paid to a tax sale
purchaser
under
this section from the delinquent assessed owner of the property as if the tax
sale of the
property
had not been held.
SECTION
5. This act shall take effect on January 1, 2007.
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LC00643/SUB A/6
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