2013 -- S 0362

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LC01140

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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: Senators Pichardo, Jabour, Miller, and Crowley

     Date Introduced: February 13, 2013

     Referred To: Senate Judiciary

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 34-18-23 of the General Laws in Chapter 34-18 entitled

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"Residential Landlord and Tenant Act" is hereby amended to read as follows:

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     34-18-23. Limitation of liability upon sale or change of management. -- (a) (1) A

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landlord who conveys premises that include a dwelling unit subject to a rental agreement in a

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good faith sale to a bona fide purchaser is relieved of liability under the rental agreement and this

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chapter as to events occurring after written notice to the tenant of the conveyance. In no event

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may the relief from liability predate the conveyance itself.

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      (2) Written notice, for purposes of this section, must include the name(s), address, and

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telephone number of the person or persons purchasing the property and assuming liability. To be

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effective, the written notice must also certify compliance with section 45-24.3-17 which prohibits

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sale or lease of property until any outstanding housing code violations have been corrected or the

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seller or lessor has provided to the buyer or lessee, as well as to the enforcing officer, all notices

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regarding violations, as required by the statute.

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      (b) A manager of premises that include a dwelling unit is relieved of liability under the

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rental agreement and this chapter as to events occurring after written notice to the tenant of the

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termination of his or her management. The written notice must include the name(s), address, and

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telephone number of the person or persons assuming management and/or the person or persons

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within the state exercising ownership or responsibility over the property.

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      (c) Nothing in this section shall be construed to affect the tenant's rights and duties under

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an existing rental agreement, and the purchaser of property, or any successor in interest to a

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mortgagor, takes title subject to the same rights and responsibilities toward the tenant which the

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seller or mortgagor had.

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     SECTION 2. 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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     34-18-38.2. Eviction of tenants at sufferance in foreclosed properties only for just

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cause. – (a) Unless otherwise specified in this section, the terms defined in subsection (a) of

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section 34-18-38.1 shall have the same meaning for purposes of this section.

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     (b) 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) "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 improvements required by the laws of the

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

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

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to a prospective purchaser or mortgagee;

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     (vii) The foreclosing owner: (A) Seeks to permanently board up or demolish the premises

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because the premises has been cited by a state or local minimum housing code enforcement

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

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unfeasible for the foreclosing owner to eliminate the violations; or (B) Seeks to comply with a

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state or local minimum housing code enforcement agency that has cited the premises for

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substantial violations affecting the health and safety of tenants and it is unfeasible to so comply

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without removing the tenant at sufferance; or (C) Seeks to correct an illegal occupancy because

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the premises has been cited by a state or local minimum housing code enforcement agency or

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zoning officials and it is unfeasible to correct such illegal occupancy without removing the tenant

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at sufferance; and, provided further, that nothing in this section shall limit the rights of a third-

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party owner to evict a tenant at sufferance upon purchasing the unit from a foreclosing owner by

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

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

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

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

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a 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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     (3) "Tenant at sufferance" means any former owner-occupant of property who becomes a

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tenant at sufferance as a result of foreclosure.

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     (c) Notwithstanding any law to the contrary, a foreclosing owner shall not evict a tenant

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at sufferance except for just cause or unless a binding purchase and sale agreement has been

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executed for a bona fide third party to purchase the housing accommodation from a foreclosing

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owner and the foreclosing owner has disclosed to the third-party purchaser that said purchaser

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may be responsible for evicting the current occupants of the housing accommodation after the

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sale occurs.

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     (d) 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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payments 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 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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     (e) 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;

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     (iii) The tenancy 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: (A) Seeks to permanently board up or demolish the premises

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because the premises has been cited by a state or local minimum housing code enforcement

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

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unfeasible for the foreclosing owner to eliminate the violations; or (B) Seeks to comply with a

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state or local minimum housing code enforcement agency that has cited the premises for

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substantial violations affecting the health and safety of tenants and it is unfeasible to so comply

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without removing the tenant at sufferance; or (C) Seeks to correct an illegal occupancy because

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the premises has been cited by a state or local minimum housing code enforcement agency or

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zoning officials and it is unfeasible to correct such illegal occupancy without removing the tenant

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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 for the purpose of

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

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to a prospective purchaser or mortgagee.

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     (f) The following procedures shall be followed for the eviction of a tenant pursuant to

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subsection (e) of this section:

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     (1) For evictions brought pursuant to paragraph (e)(1)(i), the foreclosing owner shall

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follow section 34-l8-35;

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     (2) For evictions brought pursuant to paragraph (e)(1)(ii) or subdivision (e)(2), the

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foreclosing owner shall follow section 34-18-36; and

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     (3) For evictions brought pursuant to paragraphs (e)(1)(iii) or (e)(1)(iv) or for evictions

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brought where a binding purchase and sale agreement has been executed for a bona fide third

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party to purchase the housing accommodation from a foreclosing owner, the foreclosing owner

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shall follow the procedures for terminating a month to month tenancy set forth in section 34-18-

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37.

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     SECTION 3. 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.

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     This chapter shall apply to all commercial properties and other estates, excluding

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residential properties governed by the Residential Landlord and Tenant Act, chapter 18 of this

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title.

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     This chapter shall not apply to the continued occupancy of property by any former owner

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occupant of property who becomes a tenant at sufferance as a result of a foreclosure of any

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mortgage on the property by sale of the property pursuant to a power of sale in a mortgage, as

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described in section 34-11-22; said continued occupancy to be governed by chapter 18 of this

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title.

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     SECTION 4. This act shall take effect upon passage.

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LC01140

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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 provide a former owner of a foreclosed property greater protection against

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eviction.

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     This act would take effect upon passage.

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LC01140

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