2013 -- H 5896

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LC00542

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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 - MORTGAGE FORECLOSURE AND SALE

     Introduced By: Representatives Almeida, Williams, Diaz, and Slater

     Date Introduced: March 19, 2013

     Referred To: House Judiciary

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

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mortgagee or grantee of real estate named in the foreclosure deed shall pay to the municipality,

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on or before the date the foreclosure deed is recorded, all taxes and other assessments, including

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all applicable fines, penalties or assessments assessed by a municipal housing court, authority or

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agency, water charges, and other interest and penalties, if any, which constitute liens on the real

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estate described in the foreclosure deed and which are due and owing on the recording date

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(collectively, "taxes due and owing"); provided, however, that a mortgagee or grantee shall not be

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deemed in violation of this subsection (b) if the mortgagee or grantee shall apply for a municipal

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lien certificate from the tax collector for the municipality during the forty-five (45) day period

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ending on the day on which the foreclosure deed is recorded and shall pay the taxes due and

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owing within thirty (30) days after the date on which the municipal lien certificate is mailed by

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the tax collector by the United States mail, postage prepaid, certified, return receipt requested,

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and addressed to the mortgagee or grantee at the address therefor set forth in the application for

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the municipal lien certificate. Taxes due and owing for purposes of this section shall include only

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installments thereof required by law to be paid as of the date the foreclosure 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 (in the aggregate) for each month or

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part thereof during which such violation or violations continue. For purposes of determining the

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penalty due hereunder, a month commences on the day on which the first such violation occurs

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and a new month commences on the same day (or if there is no such day, then on the last day) of

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each succeeding calendar month until all taxes due and owing are paid. In the event of a violation

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of subsection (a), taxes due and owing shall be determined as of the date required thereunder for

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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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     34-27-6.1. Additional powers of municipal housing courts and authorities. – (a) For

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purposes of this section the following terms shall have the following meanings:

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     (1) "Blighted property" shall means:

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     (i) A property which, because of physical condition or use, has been declared by a court

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of competent jurisdiction or municipal codes or ordinances as a public nuisance.

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     (ii) A property which, because it is dilapidated, unsanitary, unsafe, vermin-infested or

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lacking in the facilities or equipment required under a municipal housing code, has been

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designated by the municipality as unfit for human habitation.

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     (iii) A property which has been deemed a fire hazard.

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     (iv) A vacant or unimproved lot or parcel of land which, by reason of neglect or lack of

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maintenance, has become a place for accumulation of trash and debris or a haven for vermin.

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     (v) An unoccupied property which has been tax delinquent for a period of at least one

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year.

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     (vi) A property which is vacant but not tax delinquent and which has not been

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rehabilitated within one year of receipt of notice to rehabilitate from the appropriate code

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enforcement agency or court.

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     (2) "Costs of rehabilitation" means, without limitation, any costs and expenses for

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construction, stabilization, rehabilitation, demolition, and reasonable non-construction related

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costs and expenses associated with remediation, rehabilitation, engineering, legal fees, permitting,

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etc.

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     (3) "Municipality" means any governmental entity or court charged with the enforcement

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of municipal housing, building, plumbing, fire, and other housing-related codes.

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     (b) In addition to any other remedy available at law or in equity, a municipality may

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recover from a mortgagee or grantee of real estate named in a foreclosure deed an amount equal

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to the costs of rehabilitation lawfully incurred by or on behalf of the municipality to remedy any

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violation of this chapter and to rehabilitate a foreclosed property.

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     (c) A lien may be placed against any other asset or property located in this state of an

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owner or mortgagee of a blighted property that is in violation of any law, code, or ordinance, after

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a judgment, decree, or order has been entered by an applicable court or municipality.

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     SECTION 3. This act shall take effect upon passage.

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LC00542

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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 require mortgagees and grantees of foreclosed property to pay all

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applicable fines and penalties assessed by a municipality on or before the date a foreclosure deed

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is recorded. This act would also allow a municipality to recover the costs of rehabilitation

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incurred by or on behalf of the municipality to rehabilitate a foreclosed property.

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     This act would take effect upon passage.

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LC00542

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