2005 -- H 6020

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LC01943

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2005

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A N A C T

RELATING TO TAX SALES

     Introduced By: Representatives Almeida, Williams, and Slater

     Date Introduced: March 01, 2005

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Chapter 44-9 of the General Laws entitled "Tax Sales" is hereby amended

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by adding thereto the following section:

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     44-9-8.3. Sale of residential property to housing agency. -- Where the property subject

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to tax sale is residential and contains four (4) or less units, the Rhode Island Housing and

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Mortgage Finance Corporation shall have a right of first refusal to acquire the tax lien, and may

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assist the owner to discharge the lien or take title and acquire the property in its own name

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pursuant to regulations to be developed by the corporation, consistent with its purposes.

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     SECTION 2. Sections 44-9-10, 44-9-11 and 44-9-12 of the General Laws in Chapter 44-9

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entitled "Tax Sales" are hereby amended to read as follows:

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     44-9-10. Notice of sale to taxpayer. -- (a) Whether or not the person or general

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partnership to whom the estate is taxed as of December 31st prior to the tax sale is a resident of

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this state, the collector shall, in addition to the foregoing, notify the taxpayer of the time and place

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of sale first by registered mail not less than sixty (60) days before the date of sale or any

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adjournment of the sale, and again by certified mail not less than forty (40) days before the date

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of sale or any adjournment of the sale, either by registered or certified mail sent postpaid to the

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street address of the real estate liable for payment of taxes, and, if different, to the taxpayer's

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address listed with the tax assessor's office of the city or town where the real estate is located or

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to any other address which the taxpayer designates by written notice to the tax assessor, or to the

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address of the taxpayer stated on the deed recorded in the land evidence records of the city or

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town where the real estate is located or to the last known address of the taxpayer not less than

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twenty (20) days before the date of sale or any adjournment of the sale, or be left at the taxpayer's

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last known address or personally served on the taxpayer not less than twenty (20) days before the

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date of sale or any adjournment of the sale, but no notice of adjournments shall be necessary other

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than the announcement made at the sale. Copies of such notices are also to be delivered to the

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Rhode Island Housing and Mortgage Finance Corporation (RIHMFC).

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      (b) Persons aged sixty-five (65) years and over or persons suffering from a disability

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may designate a third party to whom notice may be sent as required pursuant to this section by

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advising the tax assessor of the name and address of the person.

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      (c) If the estate taxed is a corporation, the notice may be sent either by registered or

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certified mail to its place of business or left at the business office of the corporation with some

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person employed there.

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      (d) In the event the person to whom the estate is taxed is listed in the records of the

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assessor and/or collector as having applied for and been granted a property tax abatement based

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wholly or partially on the age of the taxpayer, then the collector shall also notify the department

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of elderly affairs by registered or and certified mail postage prepaid not less than twenty (20) days

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before the date of the sale. as described herein. Failure to notify the department of elderly affairs

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shall not affect the validity of a tax sale. nullify any tax sale.

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     44-9-11. Notice to mortgagees and other parties in interest. -- (a) In case the collector

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shall advertise for sale any property, real, personal, or mixed, in which any person other than the

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person to whom the tax is assessed has an interest, it shall not be necessary for the collector to

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notify the interested party, except for the following interested parties, provided that their interest

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was of record at least ninety (90) days prior to the date set for the sale: the present owner of

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record, mortgagees of record and mortgage assignees of record, former fee holders whose right to

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redeem has not been foreclosed, holders of tax title, federal agencies having a recorded lien on the

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subject property, holders of life estates of record, and vested remainder whose identity can be

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ascertained from an examination of the land or probate records of the municipality conducting the

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sale, and/or their assignees of record who shall be notified by the collector either by registered or

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certified mail sent postpaid not less than twenty (20) days before the date of sale or any

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adjournment of the sale, to an agent authorized by appointment or by law to receive service of

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process, or to the address of the party in interest set forth in the recorded mortgage document or

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the recorded assignment, or to the last known address of the party in interest, but no notice of

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adjournments shall be necessary other than the announcement made at the sale. The posting and

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publication of the notice of the time and place of sale in the manner provided by section 44-9-9

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shall be deemed sufficient notice to all other interested parties. This provision shall apply to all

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taxes levied prior to and subsequent to 1896. This provision is subject to the notice requirements

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of section 44-9-10.

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      (b) Only a person or entity failing to receive notice in accordance with the provisions of

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this section and sections 44-9-9 and 44-9-10 shall be entitled to raise the issue of lack of notice or

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defective notice to void the tax sale. The right to notice shall be personal to each party entitled to

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it and shall not be asserted on behalf of another party in interest. If there is a defect in notice, the

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tax sale shall be void only as to the party deprived of adequate notice, but shall be valid as to all

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other parties in interest who received proper notice of the tax sale.

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      (c) Once a petition is filed under section 44-9-25, and any party in interest entitled to

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notice of the tax sale receives actual notice of the pendency of the petition to foreclose, the party

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must raise the notice defense in accordance with the provisions of section 44-9-31 or be estopped

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from alleging lack of notice in any action to vacate a final decree entered in accordance with

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section 44-9-30.

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     44-9-12. Collector's deed -- Rights conveyed to purchaser -- Recording. -- (a) The

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collector shall execute and deliver to the purchaser a deed of the land, stating the cause of sale,

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the price for which the land was sold, the places where the notices were posted, the name of the

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newspaper in which the advertisement of the sale was published, and the residence of the grantee.

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The deed shall convey the land to the purchaser, subject to the right of redemption. The conveyed

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title shall, until redemption or until the right of redemption is foreclosed, be held as security for

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the repayment of the purchase price, with all intervening costs, terms imposed for redemption,

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and charges, with interest, and the premises conveyed, both before and after either redemption or

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foreclosure, shall also be subject to and have the benefit of all easements and restrictions lawfully

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existing in, upon, or over the land or appurtenant to the land. The deed is not valid against

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intervening interests unless recorded within sixty (60) days after the sale. If the deed is recorded it

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is prima facie evidence of all facts essential to the validity of the title conveyed by the deed. It

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shall be the duty of the collector to record the deed within sixty (60) days of the sale and to

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forward said deed promptly to the tax sale purchaser. The applicable recording fee shall be paid

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by theredeeming party. Except as provided, no sale shall give to the purchaser any right to either

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the possession, or the rents, or profits of the land until the expiration of one year after the date of

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the sale, nor shall any sale obviate or transfer any responsibility of an owner of property to

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comply with any statute of this state or ordinance of any municipality governing the use,

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occupancy, or maintenance or conveyance of property until the right of redemption is foreclosed.

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      (b) This tax title purchaser shall not be liable for any enforcement or penalties arising

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from violations of environmental or minimum housing standards prior to the expiration of one

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year from the date of the tax sale, except for violations which are the result of intentional acts by

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the tax sale purchaser or his or her agents.

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      (c) Upon the expiration of one year after the date of the sale, the tax title holder shall be

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jointly and severally liable with the owner for all responsibility and liability for the property and

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shall be responsible to comply with any statute of this state or ordinance of any municipality

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governing the use, occupancy, or maintenance or conveyance of the property even prior to the

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right of redemption being foreclosed. Nothing in this section shall be construed to confer any

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liability upon a city or town, which receives tax title as a result of any bids being made for the

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land offered for sale at an amount equal to the tax and charges.

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     (d) In the event that the tax lien is acquired by the Rhode Island Housing and Mortgage

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Finance Corporation, and said corporation has paid the taxes due, title shall remain with the

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owner of the property, subject to the right of the corporation to take the property in its own name,

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pursuant to regulations to be developed by the corporation. Upon such notice by the corporation,

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the collector shall execute and deliver a deed to the corporation as herein provided.

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     SECTION 3. Section 42-55-7 of the General Laws in Chapter 42-55 entitled "Rhode

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Island Housing and Mortgage Finance Corporation" is hereby amended to read as follows:

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     42-55-7. Powers relative to purchase of and sale to mortgage lenders of loans --

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Loans to mortgage lender. -- The corporation shall have all the powers necessary or convenient

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to carry out and effectuate the purposes and provisions of this chapter, including the following

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powers in addition to others granted in this chapter:

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      (1) To invest in, purchase or to make commitments to purchase, and take assignments

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from mortgage lenders, of notes and mortgages evidencing loans for the construction,

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rehabilitation, installation of energy saving improvements to, purchase, leasing, or refinancing of

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housing for persons and families of low and moderate income or health care facilities in this state

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upon the terms set forth in section 42-55-10;

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      (2) To make loans to mortgage lenders under terms and conditions requiring the

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proceeds to be used by those mortgage lenders for the making of new residential mortgages or

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health care facilities upon the terms set forth in section 42-55-10;

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      (3) To make commitments to purchase, and to purchase, service and sell federally

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insured mortgages, and to make loans directly upon the security of a mortgage, provided the

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underlying mortgage loans shall have been made and shall be continued to be used solely to

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finance or refinance the construction, rehabilitation, purchase, or leasing of residential housing

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for persons and families of low and moderate income or health care facilities in this state;

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      (4) To sell, at public or private sale, with or without public bidding, any mortgage or

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other obligation held by the corporation;

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      (5) Subject to any agreement with bondholders or noteholders, to collect, enforce the

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collection of, and foreclose on any collateral securing its loans to mortgage lenders and acquire or

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take possession of the collateral and sell it at public or private sale, with or without public

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bidding, and otherwise deal with such collateral as may be necessary to protect the interest of the

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corporation therein.

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     (6) To acquire at tax sale liens on one to four (4) family residential properties, to hold the

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lien while endeavoring to assist the property owner with retaining ownership, to hold and sell the

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property where consistent with the purpose of the corporation to encourage home ownership,

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particularly by low-income persons, productive and beneficial use of property, and other purposes

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of the corporation, and to adopt rules and regulations necessary to carry this program into effect.

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     SECTION 4. This act shall take effect upon passage.

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LC01943

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TAX SALES

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     This act would provide that where a property is residential and contains less than four

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units and is subject to a tax sale the RIHMFC would have the right of first refusal to acquire the

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tax lien.

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     This act would take effect upon passage.

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LC01943

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