2024 -- S 2992

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LC005866

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

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A N   A C T

RELATING TO PROPERTY -- ABANDONED PROPERTY

     Introduced By: Senators Kallman, McKenney, and Burke

     Date Introduced: April 16, 2024

     Referred To: Senate Housing & Municipal Government

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 34-44 of the General Laws entitled "Abandoned Property" is hereby

amended by adding thereto the following section:

     34-44-1.1. Inventory of abandoned properties.

     (a) On or before January 1, 2025, each town and city shall publish a list of all properties

located in each respective town or city which, based on inspection and records, may qualify as

abandoned property under this chapter. After January 1, 2025, the list shall be published and

updated annually and made available in the town or city clerk's office and on the municipal website.

Notice of the inclusion of a property on the abandoned properties list shall be provided to the last

known record owner or owners as available from the tax assessor records by first class mail, postage

pre-paid.

     (b) The publication of a list under this section shall not constitute grounds for legal claims

against a municipality by the record owner or any interested party.

     SECTION 2. Sections 34-44-3, 34-44-4 and 34-44-12 of the General Laws in Chapter 34-

44 entitled "Abandoned Property" are hereby amended to read as follows:

     34-44-3. Injunctive relief and other relief.

     (a) In any proceeding,; (1) brought under chapter 27.3 of title 23 entitled the Rhode Island

state building code, and any violation of the provisions of those regulations promulgated by the

state building code standards committee entitled SBC-1 Rhode Island state building code, SBC-2

Rhode Island state one and two family dwelling code, SBC-3 Rhode Island state plumbing code,

SBC-4 Rhode Island state mechanical code, SBC-5 Rhode Island state electrical code, SBC-6 state

property maintenance code, SBC-19 state fuel gas code or any municipal ordinance or regulation

concerning minimum housing standards, that is before a state court, municipal court, housing

division of a state or municipal court, or in any proceeding; or (2) brought upon a verified petition

for abatement filed in the state court by the municipal corporation in which the property involved

is located, by any neighboring landowner, or by a nonprofit corporation, registered to do business

in the state, that is duly organized and has as one of its goals the improvement of housing conditions

for low and moderate income persons in the municipality in which the property in question is

located, if a building is alleged to be abandoned and either to be in a dangerous or unsafe condition

or to be otherwise in violation of chapter 27.3 of title 23 entitled the Rhode Island state building

code, and any violation of the provisions of those regulations promulgated by the state building

code standards committee entitled SBC-1 Rhode Island state building code, SBC-2 Rhode Island

state one and two family dwelling code, SBC-3 Rhode Island state plumbing code, SBC-4 Rhode

Island state mechanical code, SBC-5 Rhode Island state electrical code, SBC-6 state property

maintenance code, SBC-19 state fuel gas code or any municipal ordinance or regulation concerning

building or housing,; the municipal corporation, neighboring landowner, or nonprofit corporation

may apply for an injunction requiring the owner of the building to correct the condition or to

eliminate the violation which request shall include evidence of the condition(s) alleged.

     There (b) Unless the court finds an immediate need, due to public safety, for a shortened

period, there shall be a hearing at least twenty (20) days after a summons for an injunction,

indicating the date and time of the hearing is served upon the owner of the building. The summons

shall be served by personal service, residence service, or service by certified mail pursuant to Rule

4 of the Superior Court Rules of Civil Procedure. If service cannot be made in one of these ways,

the notice shall be served by posting it in a conspicuous place on the building and by publication

in a newspaper of general circulation in the municipality in which the building is located. If the

court finds at the hearing that the building is abandoned and either is in a dangerous or unsafe

condition or is otherwise in violation of any ordinance or regulation concerning minimum housing

standards, it shall issue an injunction requiring the owner to correct the condition or to eliminate

the violation, or any other order that it considers necessary or appropriate to correct the condition

or to eliminate the violation.

     34-44-4. Public nuisance determination — Show cause hearing — Appointment of

receiver.

     (a) In any proceeding described in § 34-44-3 of this chapter, if after the court makes the

finding described in that section and additionally finds that the building in question constitutes a

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public nuisance and that the owner of the building has been afforded reasonable opportunity to

begin correcting the dangerous or unsafe condition found or to begin eliminating the violation

found and has refused or failed to do so, the court shall cause notice of its findings to be served

upon the owner, each mortgagee or other lienholder of record, and any other interested party, and

shall order the parties to show cause why a receiver should not be appointed to perform any work

and to furnish any material that reasonably may be required to abate the public nuisance. The notice

shall be served in the same manner as described in § 34-44-3 of this chapter.

     (b) Before appointing a receiver to perform any work to abate a public nuisance under this

chapter, the court shall conduct a hearing at which any mortgagee of record or lienholder of record,

or other interested party in the order of his or her priority of interest in title shall be offered the

opportunity to undertake the work and to furnish the materials as are necessary to abate the public

nuisance.

     (c) The court shall require the party selected to demonstrate the ability promptly to

undertake the work required, to provide the judge with a viable financial and construction plan for

the rehabilitation of the building, and to post security for the performance of the work.

     (d) All amounts expended by the party toward abating the public nuisance shall be a lien

on the property if the expenditures were approved in advance by the court and if the party desires

such a lien. The lien shall bear the interest, and shall be payable upon the terms approved by the

court. The lien shall have the same priority as the mortgage of a receiver, as set forth in § 34-44-6,

if a certified copy of the court order that approved the expenses, the interest, and the terms of

payment of the lien, and a description of the property in question are filed for record, within thirty

(30) days of the date of issuance of the order, in the office of the recorder of deeds of the

municipality in which the property is located.

     (e) If the court determines at the hearing that no party can undertake the work and furnish

the materials required to abate the public nuisance, or if the court determines at any time after the

hearing that any party who is undertaking corrective work pursuant to this chapter cannot or will

not proceed, or has not proceeded with due diligence, the judge may appoint a receiver to take

possession and control of the property. The receiver shall be appointed in the manner provided in

subsection (c)(f).

     (c)(f) No person shall be appointed a receiver unless he or she first has provided the court

with a viable financial and construction plan for the rehabilitation of the property in question and

has demonstrated the capacity and expertise to perform the required work in a satisfactory manner.

     (g) Prior to the appointment of a receiver the court may grant access to the property in

question to any person who applies to be appointed the receiver of the property, for the limited

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purpose of developing a viable financial and construction plan for the rehabilitation of the property

which shall include the items set forth in § 34-44-4.1.

     (h) The appointed receiver may be a financial institution that possesses an interest of record

in the property, a nonprofit corporation that is duly organized and has as one of its goals the

improvement of housing conditions for low and moderate income persons in the municipality in

which the property in question is located, or any other qualified property manager who certifies

that any rehabilitation of the property in question will not result in the long term displacement of

low and moderate income persons.

     34-44-12. Sale of building and property by receiver.

     (a) If a receiver appointed pursuant to § 34-44-4 files with the judge in the civil action

described in § 34-44-4 a report indicating that the public nuisance has been abated, and if the judge

confirms that the receiver has abated the public nuisance, and if the receiver or any interested party

requests the judge to enter an order directing the receiver to sell the building and the property on

which it is located, then the judge may enter that order after holding a hearing as described in

subsection (b).(c); or

     (b) If the court approves the abatement plan presented by the receiver or any interested

party, the judge may enter an order, upon the receiver's recommendation, directing the receiver to

sell the building and property upon which it is located then the judge may enter that order after

holding a hearing as described in subsection (c) of this section and any sale order and sale deed

shall include a requirement that the transfer of the property include the possibility of a reverter if

the abatement plan is not completed in accordance with its terms and in the timeframe established

in the plan.

     (b)(c) The receiver or interested party requesting an order as described in subsection (a)

shall cause a notice of the date and time of a hearing on the request to be served on the owner of

the building involved and all other interested parties in accordance with § 34-44-3. The judge in

the civil action described in § 34-44-3 shall conduct the scheduled hearing. At the hearing, if the

owner or any interested party objects to the sale of the building and the property, the burden of

proof shall be upon the objecting person to establish, by a preponderance of the evidence, that the

benefits of not selling the building and the property outweigh the benefits of selling them. If the

judge determines that there is no objecting person, or if he or she determines that there is one or

more objecting persons but no objecting person has sustained the burden of proof specified herein,

the judge may enter an order directing the receiver to offer the building and the property for sale

upon terms and conditions that the judge shall specify, and may further order the removal of any

clouds on the title to the building and property by reason of any liens or encumbrances that are

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inferior to any claims of the receiver, as provided by § 34-44-6(9), or if the receivership action is

pending in a court other than the superior court, the judge may order the receiver to petition the

superior court to order the removal of any clouds on the title to the building or property. An order

by the superior court to remove any cloud on the title to the building and property shall be binding

upon all those claiming by, through, under, or by virtue of, any inferior liens or encumbrances.

     (d) Priority in a sale shall be given to any party willing to designate and deed restrict the

property for low- and moderate-income housing, as defined in § 45-53-3. The waiver of any portion

of the delinquent real estate taxes or zoning or minimum housing fines pursuant to subsection (e)

of this section may qualify as a municipal subsidy under § 45-53-3.

     (c)(e) If a sale of a building and the property on which it is located is ordered pursuant to

subsections (a) and (b) through (d) and if the sale occurs in accordance with the terms and

conditions specified by the judge in his or her order of sale, then the receiver shall distribute the

proceeds of the sale and the balance of any funds that the receiver may possess, after the payment

of the costs of the sale, in the following order of priority and in the described manner:

     (1) First, the amount due for delinquent taxes and assessments owed to this state or a

political subdivision of this state;

     (2) Second, in satisfaction of any mortgage liability incurred by the receiver pursuant to §

34-44-6 of this chapter, in their order of priority;

     (3) Third, any unreimbursed expenses and other amounts paid in accordance with § 34-44-

6 of this chapter by the receiver, and the fees of the receiver assessed pursuant to § 34-44-8 of this

chapter; and

     (4) Fourth, the amount of any pre-receivership mortgages, liens, or other encumbrances, in

their order of priority.

     (d)(f) Following a distribution in accordance with subsection (c)(e), the receiver shall

request the judge in the civil action described in § 34-44-3 to enter an order terminating the

receivership. If the judge determines that the sale of the building and the property on which it is

located occurred in accordance with the terms and conditions specified by the judge in his or her

order of sale under subsection (b)(c) and that the receiver distributed the proceeds of the sale and

the balance of any funds that the receiver possessed, after the payment of the costs of the sale, in

accordance with subsection (c)(e), and if the judge approves any final accounting required of the

receiver, the judge may terminate the receivership.

     (e)(g) If a judge in a civil action described in § 34-44-3 enters a declaration that a public

nuisance has been abated by a receiver, and if, within three (3) days after the entry of the

declaration, all costs, expenses, and approved fees of the receivership have not been paid in full,

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the judge may enter an order directing the receiver to sell the building involved and the property

on which it is located. The order shall be entered, and the sale shall occur, only in compliance with

subsections (b) — (d), as applicable.

     SECTION 3. This act shall take effect upon passage.

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LC005866

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PROPERTY -- ABANDONED PROPERTY

***

     This act would require towns and cities to publish a list of abandoned properties and makes

various other amendments relative to the sale of abandoned property by a receiver.

     This act would take effect upon passage.

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LC005866

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