2013 -- H 5332

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LC00875

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO PROPERTY -- RESIDENTIAL LANDLORD AND TENANT ACT

     Introduced By: Representatives Almeida, Diaz, Handy, Williams, and O'Brien

     Date Introduced: February 07, 2013

     Referred To: House Judiciary

It is enacted by the General Assembly as follows:

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     SECTION 1. Chapter 34-18 of the General Laws entitled "Residential Landlord and

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Tenant Act" is hereby amended by adding thereto the following section:

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     34-18-58. Eviction of tenants at sufferance in foreclosed properties only for just

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cause. -- (a) As used in this section, the following words shall, unless the context clearly requires

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otherwise, have the following meanings:

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     (1) "Entity" means a business organization, or any other kind of organization including,

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without limitation, a corporation, partnership, trust, limited liability corporation, limited liability

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partnership, joint venture, sole proprietorship or any other category of organization and any

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employee, agent, servant or other representative of such entity.

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     (2) "Eviction" means an action, without limitation, by a foreclosing owner of a housing

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accommodation which is intended to actually or constructively evict a tenant at sufferance or

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otherwise compel a tenant at sufferance to vacate such housing accommodation.

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     (3) "Foreclosing owner" means an entity that holds title in any capacity, directly or

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indirectly, without limitation, whether in its own name, as trustee or as beneficiary, to a housing

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accommodation that has been foreclosed upon and either:

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     (i) Held or owned a mortgage or other security interest in the housing accommodation at

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any point prior to the foreclosure of the housing accommodation or is the subsidiary, parent,

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trustee, or agent thereof; or

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     (ii) Is an institutional mortgagee that acquires or holds title to the housing

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accommodation within three (3) years of the filing of a foreclosure deed on the housing

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accommodation; or

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     (iii) Is the federal national mortgage association or the federal home loan mortgage

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corporation.

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     (4) "Foreclosure" means an action to terminate a mortgagor's interest in property by sale

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of property pursuant to a power of sale in a mortgage, as described in section 34-11-22 or

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conveyance of the property by the mortgagor to the mortgagee in lieu of foreclosure or an action

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filed in court pursuant to section 34-27-1.

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     (5) "Housing accommodation" means a building or structure, or part thereof or land

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appurtenant thereto, and any other real or personal property used for living or dwelling purposes,

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together with all services connected with the use or occupancy of such property.

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     (6) "Institutional mortgagee" means an entity or an entity which is the subsidiary, parent,

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trustee or agent thereof or otherwise related to such entity, that holds or owns mortgages or other

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security interests in three (3) or more housing accommodations or that acts as a mortgage servicer

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of three (3) or more mortgages of housing accommodations, except any credit union incorporated

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pursuant to section 19-5-2.

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     (7) "Just cause" means one of the following:

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     (i) The tenant at sufferance has failed to pay the reasonable rent, as long as the

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foreclosing owner notified the tenant, in writing, of the amount of rent that was to be paid and to

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whom it was to be paid;

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     (ii) The tenant at sufferance has materially violated an express or legally required

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obligation or covenant of the tenancy;

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     (iii) The tenant at sufferance is committing a nuisance in the unit, is permitting a nuisance

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to exist in the unit, is causing substantial damage to the unit or is creating a substantial

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interference with the quiet enjoyment of other occupants;

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     (iv) The tenant is using or permitting the unit to be used for any illegal purpose;

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     (v) The tenant at sufferance has refused, after written request or demand by the

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foreclosing owner, to execute a written rental agreement at a reasonable rent and on such other

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terms that are not inconsistent with this chapter;

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     (vi) The tenant at sufferance has refused the foreclosing owner reasonable access to the

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unit for the purpose of making necessary repairs or improvement required by the laws of the

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United States, the state of Rhode Island any subdivision thereof, or for the purpose of inspection

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as permitted or required by agreement or by law or for the purpose of showing the unit to a

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prospective purchaser or mortgagee;

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     (vii) The foreclosing owner:

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     (A) seeks to permanently board up or demolish the premises because the premises has

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been cited by a state or local minimum housing code enforcement agency for substantial

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violations affecting the health and safety of tenants and it is economically unfeasible for the

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foreclosing owner to eliminate the violations; or

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     (B) Seeks to comply with a state or local minimum housing code enforcement agency

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that has cited the premises for substantial violations affecting the health and safety of tenants and

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it is unfeasible to so comply without removing the tenant at sufferance;

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     (C) Seeks to correct an illegal occupancy because the premises has been cited by a state

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or local minimum housing code enforcement agency or zoning officials and it is unfeasible to

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correct such illegal occupancy without removing the tenant at sufferance; provided nothing in the

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section shall limit the rights of a third-party owner to evict a tenant at sufferance upon purchasing

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the unit from a foreclosing owner by following the procedures for terminating a month-to-month

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tenancy set forth in section 34-18-37.

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     (8) "Mortgagee" means an entity to whom property is mortgaged, the mortgage creditor

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or lender including, but not limited to, mortgage servicers, lenders in a mortgage agreement and

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any agent, servant or employee of the mortgagee or any successor in interest or assignee of the

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mortgagee's rights, interests or obligations under the mortgage agreement.

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     (9) "Mortgage servicer" means an entity which administers or at any point administered

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the mortgage; provided, however such administration shall include, but not be limited to,

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calculating principal and interest, collecting payments from the mortgagor, acting as escrow agent

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or foreclosing in the event of a default.

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     (10) "Unit" or "residential unit" means the room or group of rooms within a housing

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accommodation which is used or intended for use as a residence by one household.

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     (11) "Reasonable rent" means the lesser of:

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     (i) The fair market rent as established by the United States department of housing and

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urban development pursuant to 42 U.S.C. c section 1437f(o), as it exists or may be amended, for a

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unit of comparable size in the area in which the housing accommodation is located; or

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     (ii) Any other amount agreed as rent between the tenant at sufferance and the foreclosing

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mortgagee.

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     (12) "Tenant at sufferance" means any former owner occupant of property who becomes

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a tenant a sufferance as a result of a foreclosure.

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     (b) Notwithstanding any provisions of the general or public laws to the contrary, a

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foreclosing owner shall not evict a tenant at sufferance, except for just cause, or unless a binding

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purchase and sale agreement has been executed for bona fide third-party to purchase the housing

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accommodation from a foreclosing owner, and the foreclosing owner has disclosed to the third-

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party purchaser that said purchaser may be responsible for evicting the current occupants of the

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housing accommodations after the sale occurs.

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     (c) Within thirty (30) days of the foreclosure, the foreclosing owner shall deliver to the

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tenant at sufferance a written notice stating the names, addresses, telephone numbers and

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telephone contact information of the foreclosing owner, the building manager or other

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representative of the foreclosing owner responsible for the management of such building and

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entering into a written rental agreement at a reasonable rent and on such other terms permitted by

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this section, stating the amount of reasonable rent to be paid and the address to which rental

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payment shall be sent. This requirement shall be satisfied if the foreclosing owner or someone

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acting on his or her behalf has:

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     (1) Posted in a prominent location in the building;

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     (2) Mailed by first (1st) class mail to each unit; and

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     (3) Slid under the door of the unit occupied by the tenant at sufferance a written notice

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containing the information required by this paragraph.

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     (d) A foreclosing owner shall not evict a tenant at sufferance for actions that constitute

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just cause, and:

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     (1) A foreclosing owner shall not evict a tenant at sufferance for the following actions

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that constitute just cause until thirty (30) days after the notice required by subsection (d) of this

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section is posted and delivered:

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     (i) The tenant at sufferance has failed to pay the reasonable rent, as long as the

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foreclosing owner notified the tenant at sufferance, in writing, of the amount of reasonable rent

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that was to be paid and to whom it was to be paid;

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     (ii) The tenant at sufferance has materially violated an express or legally required

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obligation or covenant of the tenancy; and

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     (iii) The tenant at sufferance has refused, after written request or demand by the

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foreclosing owner, to execute a written rental agreement at a reasonable rent and on such terms

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that are not inconsistent with this section; and

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     (iv) The foreclosing owner:

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     (A) Seeks to permanently board up or demolish the premises because the premises has

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been cited by a state or local minimum housing code enforcement agency for substantial

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violations affecting the health and safety of tenants and it is economically unfeasible for the

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foreclosing owner to eliminate the violations; or

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     (B) Seeks to comply with a state or local minimum housing code enforcement agency

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that has cited the premises for substantial violations affecting the health and safety of tenants and

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it is unfeasible to so comply without removing the tenant at sufferance; or

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     (C) Seeks to correct an illegal occupancy because the premises has been cited by a state

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or local minimum housing code enforcement agency or zoning officials and it is unfeasible to

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correct such illegal occupancy without removing the tenant at sufferance.

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     (2) A foreclosing owner shall not evict a tenant at sufferance for the following actions

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that constitute just cause until the notice required by subsection (d) is posted and delivered:

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     (i) The tenant at sufferance is committing a nuisance in the unit, is permitting a nuisance

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to exist in the unit, is causing substantial damage to the unit or is creating a substantial

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interference with the quiet enjoyment of other occupants;

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     (ii) The tenant at sufferance is using or permitting the unit to be used for any illegal

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purpose; and

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     (iii) The tenant at sufferance has refused the foreclosing owner reasonable access to the

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unit for the purpose of making necessary repairs or improvements required by the laws of the

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United States, the state of Rhode Island or any subdivision thereof; or

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     (iv) For the purpose of inspection as permitted or required by agreement or by law or for

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the purpose of showing the unit to a prospective purchaser or mortgagee.

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     (e) The following procedure shall be followed for the eviction of a tenant pursuant to

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paragraph (d) of this section.

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     (1) For evictions brought pursuant to paragraph (d)(1)(i) for foreclosing owner shall

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follow the procedures set forth in section 34-18-35;

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     (2) For evictions brought pursuant to paragraphs (d)(1)(ii) and (e)(2) the foreclosing

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owner shall following section 34-18-36; and

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     (3) For evictions brought pursuant to paragraph (d)(1)(iii) or for evictions brought where

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a binding purchase and sale agreement has been executed for a bona fide third-party to purchase

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the housing accommodation from a foreclosing owner, the foreclosing owner shall follow the

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procedures for terminating a month-to-month tenancy set forth in section 34-18-37.

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     SECTION 2. Section 34-18.1-1 of the General Laws in Chapter 34-18.1 entitled

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"Commercial Leasing and Other Estates" is hereby amended to read as follows:

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     34-18.1-1. Purpose. -- This chapter shall apply to all commercial properties and other

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estates, excluding residential properties governed by the Residential Landlord and Tenant Act,

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chapter 18 of this title. This chapter shall not apply to the continued occupancy of property by an

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former owner occupant of property who becomes a tenant at sufferance as a result of a

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foreclosure of any mortgage on the property by sale of the property pursuant to a power of sale in

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a mortgage, as described in section 34-11-22 or conveyance of the property by the mortgagor to

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the mortgagee in lieu of foreclosure or an action filed in court pursuant to section 34-27-1; said

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continued occupancy to be governed by chapter 18 of this title.

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     SECTION 3. This act shall take effect upon passage.

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LC00875

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO PROPERTY -- RESIDENTIAL LANDLORD AND TENANT ACT

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     This act would prohibit a foreclosing owner from evicting a tenant at sufferance except

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for just cause or a purchase and sale agreement for the foreclosed has been executed.

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     This act would take effect upon passage.

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LC00875

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