Chapter 170

2017 -- H 5397 SUBSTITUTE A Enacted 07/07/2017

A N   A C T

RELATING TO PROPERTY -- MORTGAGE FORECLOSURE AND SALE

Introduced By: Representatives Morin, Messier, Phillips, Casey, and Johnston

Date Introduced: February 03, 2017

It is enacted by the General Assembly as follows:

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

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

34-27-6. Payment of outstanding taxes.

(a) In connection with any sale by public auction made under and according to the

provisions of any mortgage of real estate or any power of sale contained therein or annexed

thereto, if the mortgagee or an affiliate of the mortgagee is the successful bidder for the real estate

or property offered for sale, the foreclosure deed shall be recorded in the records of land evidence

for the municipality where the real estate is located within forty-five (45) days after the date of

the sale. The deed shall be captioned "foreclosure deed" and the date of the foreclosure shall be

stated in the deed. This subsection (a) shall not apply to any such sale if, prior to the recording of

the foreclosure deed: (1) tThe mortgagor files a voluntary proceeding, or an order for relief is

entered in any involuntary proceeding against the mortgagor, under any federal or state

bankruptcy or insolvency statute; or (2) tThe mortgagee abandons or otherwise terminates such

sale.

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

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

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

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

deed and which that are due and owing on the recording date (collectively, "taxes due and

owing"); provided, however, that a grantee shall not be deemed in violation of this subsection (b)

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

municipality during the forty-five-(45) day (45) period ending on the day on which the

foreclosure deed is recorded and shall pay the taxes due and owing within thirty (30) days after

the date on which the municipal lien certificate is mailed by the tax collector by the United States

mail, postage prepaid, certified, return receipt requested, and addressed to the grantee at the

address therefor set forth in the application for the municipal lien certificate. Taxes due and

owing for purposes of this section shall include only installments thereof required by law to be

paid as of the date the foreclosure deed is recorded.

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

shall accrue at the rate of forty dollars ($40.00) three hundred dollars ($300) per month (in the

aggregate) for each month or part thereof during which such violation or violations continue. For

purposes of determining the penalty due hereunder, a month commences on the day on which the

first such violation occurs and a new month commences on the same day (or if there is no such

day, then on the last day) of each succeeding calendar month until all taxes due and owing are

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

the date required thereunder for the recording of a foreclosure deed. The maximum aggregate

penalty shall not exceed two thousand dollars ($2,000), which shall be paid prior to the city or

town clerk accepting the foreclosure deed for recording.

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

any individual or legal entity that controls, is controlled by, or is under common control with such

mortgagee, and the term "foreclosure deed" shall mean the mortgagee's deed or other conveyance

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

provisions of any mortgage of real estate or any power of sale contained therein or annexed

thereto.

(e) A mortgagee not licensed as a financial lending institution holding a mortgage by

private agreement with another party shall be exempt from the penalty requirements of this

section.

SECTION 2. This act shall take effect upon passage.

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LC001133/SUB A

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