2014 -- H 7690

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LC004066

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO COURTS AND CIVIL PROCEDURE - PROCEDURE GENERALLY - LEVY

AND SALE ON EXECUTION

     

     Introduced By: Representative Robert B.Jacquard

     Date Introduced: February 27, 2014

     Referred To: House Judiciary

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 9-26-4.1 of the General Laws in Chapter 9-26 entitled "Levy and

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Sale on Execution" is hereby amended to read as follows:

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     9-26-4.1. Homestead estate exemption. -- (a) In addition to the property exempt from

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attachment as set forth in section 9-26-4, an estate of homestead to the extent of five hundred

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thousand dollars ($500,000) in the land and buildings, or personal property that the owner uses as

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a residence, may be acquired pursuant to this section by an owner of a home or an individual who

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rightfully possesses the premises by lease, as a life tenant, as a beneficiary of a revocable or

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irrevocable trust or otherwise, and who occupies or intends to occupy the home as his or her

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principal residence. The estate of homestead provided pursuant to this section shall be automatic

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by operation of law, and without any requirement or necessity for the filing of a declaration, a

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statement in a deed, or any other documentation. The estate shall be exempt from the laws of

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attachment, levy on execution and sale for payment of debts or legacies except in the following

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cases:

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      (1) Sale for taxes, sewer liens, water liens, lighting district assessments and fire district

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assessments;

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      (2) For a debt contracted prior to the acquisition of the estate of homestead;

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      (3) For a debt contracted for the purchase of the home;

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      (4) Upon an order issued by the family court to enforce its judgment that a spouse pay a

 

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certain amount weekly or otherwise for the support of a spouse or minor children;

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      (5) Where a building or buildings are situated on land not owned by the owner of a

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homestead estate are attached, levied upon or sold for the ground rent of the lot upon which the

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building or buildings are situated;

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      (6) for a debt due to, or a lien in favor of, the department of human services and/or the

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state of Rhode Island for reimbursement of medical assistance, as provided for in section 40-8-15;

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      (7) For a debt heretofore or hereafter owing to a federally insured deposit taking

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institution or a person regulated or licensed under title 19.

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      (b) For the purposes of this section, "owner of a home" includes a sole owner, lessee (but

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only a lessee that was the owner of a home prior to a transfer to the lessor) joint tenant, tenant by

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the entirety or tenant in common; provided, that only one individual may acquire an estate of

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homestead in the home for the benefit of his or her family; and provided further, that an estate of

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homestead may be acquired on only one principal residence for the benefit of a family. For the

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purposes of this section, "family" includes either a parent and child or children, a husband and

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wife and their children, if any, or a sole owner. The provisions of this section shall not apply to

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any debt owing to a regulated institution, a debt secured by a mortgage or other voluntary lien on

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a home, or a mechanics' lien on the property comprising the estate as provided for under chapter

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28 of title 34. Notwithstanding any other provisions of law, it shall not be necessary to record a

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declaration of homestead in order to take advantage of the homestead estate exemption.

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     (c) An estate of homestead shall be subordinate to a mortgage encumbering the home

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executed by all the owners of the home. For purposes of this chapter, a mortgage shall include an

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instrument granting a security interest in a manufactured home or cooperative housing unit. The

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subordination shall not require the signature of a spouse who is not an owner. A mortgage

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executed by fewer than all of the owners of a home that is subject to an estate of homestead shall

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be superior only to the homestead estate of the owners who are parties to the mortgage and their

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non-titled spouses and minor children, if any.

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     No statement that a homestead estate shall be subordinate to the mortgage shall be

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required in the mortgage instrument and nothing contained in a mortgage or any document

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executed in connection with the mortgage shall affect or be construed to create, modify or

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terminate a homestead estate, other than to subordinate it to the mortgage as aforesaid. A

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mortgage lender shall not require or record a release of homestead in connection with the making

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and recording of a mortgage.

 

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO COURTS AND CIVIL PROCEDURE - PROCEDURE GENERALLY - LEVY

AND SALE ON EXECUTION

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     This act would provide that an estate of homestead shall be subordinate to a mortgage.

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This act would further provide that nothing contained in a mortgage shall create, modify or

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terminate a homestead estate other than to subordinate it to the mortgage. This act would also

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prohibit a mortgage lender from requiring or recording a release of homestead in connection with

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a mortgage.

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     This act would take effect upon passage.

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