2012 -- H 7658

=======

LC01495

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

____________

A N A C T

RELATING TO PROPERTY - MORTGAGE FORECLOSURE AND SALE

     

     

     Introduced By: Representatives Williams, Carnevale, Hull, Cimini, and Tarro

     Date Introduced: February 16, 2012

     Referred To: House Judiciary

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. Section 34-27-6 of the General Laws in Chapter 34-27 entitled "Mortgage

1-2

Foreclosure and Sale" is hereby amended to read as follows:

1-3

     34-27-6. Payment of outstanding taxes. -- (a) In connection with any sale by public

1-4

auction made under and according to the provisions of any mortgage of real estate or any power

1-5

of sale contained therein or annexed thereto, if the mortgagee or an affiliate of the mortgagee

1-6

(other than a municipality) is the successful bidder for the real estate or property offered for sale,

1-7

the foreclosure deed shall be recorded in the records of land evidence for the municipality where

1-8

the real estate is located within forty-five (45) thirty (30) days after the date of the sale. The deed

1-9

shall be captioned "foreclosure deed" and the date of the foreclosure shall be stated in the deed.

1-10

This subsection (a) shall not apply to any such sale if, prior to the recording of the foreclosure

1-11

deed: (1) the mortgagor files a voluntary proceeding, or an order for relief is entered in any

1-12

involuntary proceeding against the mortgagor, under any federal or state bankruptcy or

1-13

insolvency statute; or (2) the mortgagee abandons or otherwise terminates such sale.

1-14

      (b) Notwithstanding any other general law or local ordinance to the contrary, the grantee

1-15

of real estate named in the foreclosure deed shall pay to the municipality, on or before the date

1-16

the foreclosure deed is recorded, all taxes and other assessments, including water charges, interest

1-17

and penalties, if any, which constitute liens on the real estate described in the foreclosure deed

1-18

and which are due and owing on the recording date (collectively, "taxes due and owing");

1-19

provided, however, that a grantee shall not be deemed in violation of this subsection (b) if the

1-20

grantee shall apply for a municipal lien certificate from the tax collector for the municipality

2-1

during the forty-five (45) thirty (30) day period ending on the day on which the foreclosure deed

2-2

is recorded and shall pay the taxes due and owing within thirty (30) days after the date on which

2-3

the municipal lien certificate is mailed by the tax collector by the United States mail, postage

2-4

prepaid, certified, return receipt requested, and addressed to the grantee at the address therefor set

2-5

forth in the application for the municipal lien certificate. Taxes due and owing for purposes of

2-6

this section shall include only installments thereof required by law to be paid as of the date the

2-7

foreclosure deed is recorded.

2-8

      (c) Upon a violation of any one or more of the requirements of this section, a penalty

2-9

shall accrue at the rate of forty dollars ($40.00) per month one hundred dollars ($100) per day (in

2-10

the aggregate) for each month or part thereof day during which such violation or violations

2-11

continue. For purposes of determining the penalty due hereunder, a month commences on the day

2-12

on which the first such violation occurs and a new month commences on the same day (or if there

2-13

is no such day, then on the last day) of each succeeding calendar month until all taxes due and

2-14

owing are paid. In the event of a violation of subsection (a), taxes due and owing shall be

2-15

determined as of the date required thereunder for the recording of a foreclosure deed.

2-16

      (d) As used in this section, the term "affiliate" shall mean, with respect to any

2-17

mortgagee, any individual or legal entity that controls, is controlled by or is under common

2-18

control with such mortgagee, and the term "foreclosure deed" shall mean the mortgagee's deed or

2-19

other conveyance of title to the successful bidder at any sale by public auction made under and

2-20

according to the provisions of any mortgage of real estate or any power of sale contained therein

2-21

or annexed thereto.

2-22

     (e) Any penalties under this section shall be paid to the municipality where the real estate

2-23

is located and all outstanding penalties shall be paid at such time the foreclosure deed is recorded.

2-24

A municipality may, by resolution, waive all or part of said penalties if extenuating

2-25

circumstances, or mitigating factors, reasonably justify same.

2-26

     SECTION 2. This act shall take effect August 1, 2012.

     

=======

LC01495

========

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO PROPERTY - MORTGAGE FORECLOSURE AND SALE

***

3-1

     This act would require that foreclosure deeds be recorded within thirty (30) days of

3-2

foreclosure and would increase the penalties for violation of this requirement.

3-3

     This act would take effect August 1, 2012.

     

=======

LC01495

=======

H7658