2014 -- S 2659 | |
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LC004336 | |
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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 PROPERTY - LANDLORD AND TENANT ACT | |
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Introduced By: Senators Metts, Pichardo, Crowley, Jabour, and Doyle | |
Date Introduced: March 04, 2014 | |
Referred To: Senate Judiciary | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Section 34-18-20 and 34-18-23 of the General Laws in Chapter 34-18 |
2 | entitled "Residential Landlord and Tenant Act" are hereby amended to read as follows: |
3 | 34-18-20. Disclosure. -- (a) A landlord or any person authorized to enter into a rental |
4 | agreement on his or her behalf shall disclose to the tenant in writing, at or before the |
5 | commencement of the tenancy, the name, address and number of: |
6 | (1) The person authorized to manage the premises; and |
7 | (2) An owner of the premises or a person authorized to act for and on behalf of the |
8 | owner for the purpose of service of process and receiving and receipting for notices and demands. |
9 | (b) The information required to be furnished by this section shall be kept current. This |
10 | section extends to and is enforceable against any successor landlord, owner, or manager. |
11 | (c) A person who fails to comply with subsection (a) of this section becomes an agent of |
12 | each person who is a landlord for: |
13 | (1) Service of process and receiving and receipting for notices and demands; and |
14 | (2) Performing the obligations of the landlord under this chapter and under the rental |
15 | agreement and expending or making available for the purpose of all rent collected from the |
16 | premises. |
17 | (d) A landlord who becomes delinquent on a mortgage securing real estate upon which |
18 | the dwelling unit is located for a period of one hundred twenty (120) days shall notify the tenant |
19 | that the property may be subject to foreclosure; and until the foreclosure occurs the tenant must |
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1 | continue to pay rent to the landlord as provided under the rental agreement. |
2 | 34-18-23. Limitation of liability upon sale or change of management. -- (a) (1) A |
3 | landlord who conveys premises that include a dwelling unit subject to a rental agreement in a |
4 | good faith sale to a bona fide purchaser is relieved of liability under the rental agreement and this |
5 | chapter as to events occurring after written notice to the tenant of the conveyance. In no event |
6 | may the relief from liability predate the conveyance itself. |
7 | (2) Written notice, for purposes of this section, must include the name(s), address, and |
8 | telephone number of the person or persons purchasing the property and assuming liability. To be |
9 | effective, the written notice must also certify compliance with section 45-24.3-17 which prohibits |
10 | sale or lease of property until any outstanding housing code violations have been corrected or the |
11 | seller or lessor has provided to the buyer or lessee, as well as to the enforcing officer, all notices |
12 | regarding violations, as required by the statute. |
13 | (b) A manager of premises that include a dwelling unit is relieved of liability under the |
14 | rental agreement and this chapter as to events occurring after written notice to the tenant of the |
15 | termination of his or her management. The written notice must include the name(s), address, and |
16 | telephone number of the person or persons assuming management and/or the person or persons |
17 | within the state exercising ownership or responsibility over the property. |
18 | (c) Nothing in this section shall be construed to affect the tenant's rights and duties under |
19 | an existing rental agreement, and the purchaser of property or any immediate successor in interest |
20 | to a mortgagor, other than a third-party bona fide purchaser, of a premises containing four (4) or |
21 | fewer dwelling units takes title subject to the same rights and responsibilities toward the tenant |
22 | which the seller or mortgagor had. |
23 | SECTION 2. Chapter 34-18 of the General Laws entitled "Residential Landlord and |
24 | Tenant Act" is hereby amended by adding thereto the following sections: |
25 | 34-18-38.1. Definitions for purpose of the eviction of tenants in residential foreclosed |
26 | properties. -- (a) As used in this section, the following words shall, unless the context clearly |
27 | requires otherwise, have the following meanings: |
28 | (1) "Bona fide lease" or “bona fide tenancy” means a lease or tenancy shall not be |
29 | considered bona fide unless: |
30 | (i) The mortgagor, or the child, spouse or parent of the mortgagor under the contract, is |
31 | not the tenant; and |
32 | (ii) The lease or tenancy was the result of an arms-length transaction; and |
33 | (iii) The lease or tenancy requires the receipt of rent that is not substantially less than fair |
34 | market rent for the property, or the dwelling unit's rent is reduced or subsidized due to a federal, |
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1 | state or local subsidy. |
2 | (2) "Entity" means a business organization, or any other kind of organization including, |
3 | without limitation, a corporation, partnership, trust, limited liability corporation, limited liability |
4 | partnership, joint venture, sole proprietorship or any other category of organization and any |
5 | employee, agent, servant or other representative of such entity. |
6 | (3) "Eviction" means an action, without limitation, by a foreclosing owner of a housing |
7 | accommodation which is intended to actually or constructively evict a tenant or otherwise compel |
8 | a tenant to vacate such housing accommodation. |
9 | (4) "Foreclosing owner" means an entity that holds title in any capacity, directly or |
10 | indirectly, without limitation, whether in its own name, as trustee or as beneficiary, to a housing |
11 | accommodation that has been foreclosed upon and either: |
12 | (i) Held or owned a mortgage or other security interest in the housing accommodation at |
13 | any point prior to the foreclosure of the housing accommodation or is the subsidiary, parent, |
14 | trustee, or agent thereof; or |
15 | (ii) Is an institutional mortgagee that acquires or holds title to the housing |
16 | accommodation within three (3) years of the filing of a foreclosure deed on the housing |
17 | accommodation; or |
18 | (iii) Is the federal national mortgage association or the federal home loan mortgage |
19 | corporation. |
20 | (5) "Foreclosure" means an action to terminate a mortgagor’s interest in property by sale |
21 | of property pursuant to a power of sale in a mortgage, as described in § 34-11-22 or conveyance |
22 | of the property by the mortgagor in lieu of foreclosure or an action filed in court pursuant to § 34- |
23 | 27-1. |
24 | (6) "Housing accommodation" means a building or structure containing four (4) or fewer |
25 | dwelling units, or part thereof of land appurtenant thereto, and any other real or personal property |
26 | used, rented or offered for rent for living or dwelling purposes, together with all services |
27 | connected with the use or occupancy of such property. |
28 | (7) "HUD" means the United States Department of Housing and Urban Development and |
29 | any successor to such department. |
30 | (8) 'Institutional mortgagee" means an entity or an entity which is the subsidiary, parent, |
31 | trustee to such entity, that holds or owns mortgages or other security interests in three (3) or more |
32 | housing accommodations or that acts as a mortgage servicer of three (3) or more mortgages of |
33 | housing accommodations. |
34 | (9) "Just cause" means one of the following: |
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1 | (i) The tenant has failed to pay rent in effect prior to the foreclosure, as long as the |
2 | foreclosing owner notified the tenant in writing of the amount of rent that was to be paid and to |
3 | whom it was to be paid; |
4 | (ii) The tenant has materially violated either an express or legally required obligation or |
5 | covenant of the tenancy or occupancy, other than the obligation to surrender possession upon |
6 | proper notice, and has failed to cure such violation within thirty (30) days after having received |
7 | written notice thereof from the foreclosing owner; |
8 | (iii) The tenant is committing a nuisance in the unit; is permitting a nuisance to exist in |
9 | the unit; is causing substantial damage to the unit or is creating a substantial interference with the |
10 | quiet enjoyment of other occupants; |
11 | (iv) The tenant is using or permitting the unit to be used for any illegal purpose; |
12 | (v) The tenant who had a written bona fide lease or other rental agreement which |
13 | terminated, on or after July 1, 2014, has refused, after written request or demand by the |
14 | foreclosing owner, to execute a written extension or renewal thereof for a further term of like |
15 | duration and in such terms that are not inconsistent with this chapter; |
16 | (iv) The tenant has refused the foreclosing owner reasonable access to the unit for the |
17 | purpose of making necessary repairs or improvement required by the laws of the United States, |
18 | the state of Rhode Island or any subdivision thereof, or for the purpose of inspection as permitted |
19 | or required by agreement or by law or for the purpose of showing the unit to a prospective |
20 | purchaser or mortgagee; |
21 | (vii) The foreclosing owner: (A) Seeks to permanently board up or demolish the premises |
22 | because the premises has been cited by a state or local minimum housing code enforcement |
23 | agency for substantial violations affecting the health and safety of tenants and it is economically |
24 | not feasible for the foreclosing owner to eliminate the violations; or (B) Seeks to comply with a |
25 | state or local minimum housing code enforcement agency that has cited the premises for |
26 | substantial violations affecting the health and safety of tenants and it is not feasible to so comply |
27 | without removing the tenant; or (C) Seeks to correct an illegal occupancy because the premises |
28 | has been cited by a state or local minimum housing code enforcement agency or zoning official |
29 | and it is not feasible to correct such illegal occupancy without removing the tenant; and provided |
30 | further that nothing in this section shall limit the rights of a third-party owner to evict a tenant at |
31 | the expiration of an existing lease. |
32 | (10) "Mortgagee" means an entity to whom property is mortgaged, the mortgage creditor |
33 | or lender including, but not limited to, mortgage services, lenders in a mortgage agreement and |
34 | any agent, servant or employee of the mortgagee or any successor in interest or assignee of the |
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1 | mortgagee's rights, interests or obligations under the mortgage agreement. |
2 | (11) "Mortgage servicer" means an entity which administers or at any point administered |
3 | the mortgage; provided, however, that such administration shall include, but not be limited to, |
4 | calculating principal and interest, collecting payments from the mortgager, acting as escrow agent |
5 | or foreclosing in the event of a default. |
6 | (12) "Tenant" means a person or group of persons, who at the time of foreclosure, is |
7 | entitled to occupy a housing accommodation pursuant to a bona fide lease or tenancy. A person |
8 | who moves into the housing accommodation owned by the foreclosing owner, subsequent to the |
9 | foreclosure sale, without the express written permission of the foreclosing owner shall not be |
10 | considered a tenant under this section. |
11 | (13) "Unit" or "residential unit" means the room or group of rooms within a housing |
12 | accommodation which is used or intended for use as a residence by one household. |
13 | 34-18-38.2. Just cause needed for eviction of foreclosed residential property tenants. |
14 | -- (a) Notwithstanding any provision of the general or public laws to the contrary, a foreclosing |
15 | owner shall not evict a tenant except for just cause, or unless a binding purchase and sale |
16 | agreement has been executed for a bona fide third party to purchase the housing accommodation |
17 | from a foreclosing owner, and the foreclosing owner has disclosed to the third-party purchaser |
18 | that said purchaser may be responsible for evicting the current occupants of the housing |
19 | accommodation after the sale occurs; or with respect to a housing accommodation in a housing |
20 | accommodation insured by the Federal Housing Administration, unless HUD denies a request by |
21 | any tenant for an occupied conveyance or if a tenant does not submit to HUD a request for |
22 | continued occupancy before the deadline set forth in a notice to occupants of pending acquisition |
23 | delivered to the tenant by the foreclosing owner. |
24 | (b) Within thirty (30) days of the foreclosure, the foreclosing owner shall post in a |
25 | prominent location in the building in which the rental housing unit is located, a written notice |
26 | stating: |
27 | (1) The names, addresses, telephone numbers and telephone contact information of the |
28 | foreclosing owner, the building manager or other representative of the foreclosing owner |
29 | responsible for the management of such building; |
30 | (2) The address to which rent charges shall be sent; |
31 | (3) That in order to remain on the premises as a tenant of the foreclosing owner, the |
32 | household must submit within thirty (30) days a completed form to be provided with said written |
33 | notice to the same address where rent charges shall be sent, said form to be substantially similar |
34 | to the request for continued occupancy form used by HUD and shall contain an authorization to |
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1 | conduct a credit check of the person or persons submitting the form. This requirement shall be |
2 | satisfied if the foreclosing owner or someone acting on his/her behalf has: |
3 | (i) Posted the notice in a prominent location in the building; |
4 | (ii) Mailed the notice by first class mail to each unit; and |
5 | (iii) Slid the notice under the door of each unit in the building a document stating the |
6 | names, addresses, and telephone contact information of the foreclosing owner, the building |
7 | manager or other representative of the foreclosing owner responsible for the management of such |
8 | building and stating the address to which rent and use and occupancy charges shall be sent. |
9 | (c) A foreclosing owner shall not evict a tenant for actions that constitute just cause, and: |
10 | (1) A foreclosing owner shall not evict a tenant for the following actions that constitute |
11 | just cause until thirty (30) days after the notice required by subsection (b) of this section is posted, |
12 | mailed and delivered: |
13 | (i) The tenant has failed to pay the rent in effect prior to the foreclosure as long as the |
14 | foreclosing owner notified the tenant in writing of the amount of rent that was to be paid and to |
15 | whom it was to be paid and to whom it was to be paid; |
16 | (ii) The tenant has materially violated an obligation or covenant of the tenancy or |
17 | occupancy, other than the obligation to surrender possession upon proper notice; |
18 | (iii) The tenant who had a written bona fide lease or other rental agreement which |
19 | terminated, on or after July 1, 2014, has refused, after written request or demand by the |
20 | foreclosing owner, to execute a written extension or renewal thereof for a further term of like |
21 | duration and in such terms that are not inconsistent with this section; and |
22 | (iv) The foreclosing owner: (A) Seeks to permanently board up or demolish the premises |
23 | because the premises has been cited by a state or local minimum housing code enforcement |
24 | agency for substantial violations affecting the health and safety of tenants and it is not |
25 | economically feasible for the foreclosing owner to eliminate the violations; or (B) Seeks to |
26 | comply with a state or local minimum housing code enforcement agency that has cited the |
27 | premises for substantial violations affecting the health and safety of tenants and it is not feasible |
28 | to so comply without removing the tenant; or (C) Seeks to correct an illegal occupancy because |
29 | the premises has been cited by a state or local minimum housing code enforcement agency or |
30 | zoning officials and it is not feasible to correct such illegal occupancy without evicting the tenant. |
31 | (2) A foreclosing owner shall not evict a tenant for the following actions that constitute |
32 | just cause until the notice required by subsection (b) is posted and delivered: |
33 | (i) The tenant is committing a nuisance in the unit; is permitting a nuisance to exist in the |
34 | unit; is causing substantial damage to the unit or is creating a substantial interference with the |
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1 | quiet enjoyment of other occupants; |
2 | (ii) The tenant is using or permitting the unit to be used for any illegal purpose; and |
3 | (iii) The tenant has refused the foreclosing owner reasonable access to the unit for the |
4 | purpose of making necessary repairs or improvements required by the laws of the United States, |
5 | the state of Rhode Island or any subdivision thereof, or for the purpose of showing the unit to a |
6 | prospective purchaser or mortgagee. |
7 | (d) The following procedures shall be followed for the eviction of a tenant pursuant to |
8 | subsection (c) of this section: |
9 | (1) For evictions brought pursuant to subsection (c)(1)(i), the foreclosing owner shall |
10 | follow § 34-18-35; |
11 | (2) For evictions brought pursuant to subsection (c)(1)(ii) or subsection (d)(2), the |
12 | foreclosing owner shall follow § 34-18-36; |
13 | (3) For evictions brought pursuant to subsection (c)(1)(iii) or (c)(1)(iv) or for evictions |
14 | brought where a binding purchase and sale agreement has been executed for a bona fide third |
15 | party to purchase the housing accommodation from a foreclosing owner or for evictions brought |
16 | with respect to housing accommodations located in a premises insured by the federal housing |
17 | administration as provided in subsection (b), for eviction brought against a tenant who fails to |
18 | return the form requesting continued occupancy pursuant to subsection (b), the foreclosing owner |
19 | shall follow the procedures for terminating a month to month tenancy set forth in § 34-18-37, |
20 | provided that any obligations of the foreclosing owner arising under the federal protecting tenants |
21 | at foreclosure act of 2009, as such act is amended and extended from time to time, shall first have |
22 | been satisfied; and provided further that in any eviction brought against a tenant pursuant to |
23 | subsection (c) the tenant may raise an affirmative defense that the form was not posted or served |
24 | upon the tenant as required by subsection (b). |
25 | (e) A foreclosing owner may evict any person other than a tenant by following the |
26 | procedures for terminating a month to month tenancy set forth in § 34-18-37. |
27 | (f) If a foreclosing owner disagrees with the amount of rent paid by the tenant to the |
28 | foreclosing owner, the foreclosing owner may bring a claim in district court to claim that the |
29 | rental charge is unreasonable and set a new rental rate. A bona fide lease or bona fide tenancy |
30 | between the foreclosed upon owner and the lessee or proof of rental payment to the foreclosed |
31 | upon owner shall be presumed to be a reasonable rental rate. |
32 | (g) Nothing herein shall be deemed to limit the right of any tenant to knowingly waive |
33 | the provisions of this section for consideration acceptable to such tenant. |
34 | (h) Notwithstanding any other provisions of this section, a foreclosing owner shall be |
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1 | exempt from the requirement of this section if: |
2 | (1) The foreclosing owner is headquartered in Rhode Island and maintains a physical |
3 | office or offices exclusively in Rhode Island from which office or offices it carries out full- |
4 | service mortgage operations, including the acceptance and processing of mortgage payments and |
5 | the provision of local customer service and loss mitigation and where Rhode Island staff have the |
6 | authority to approve loan restructuring and other loss mitigation strategies; or |
7 | (2) The foreclosing owner conducted fewer than five (5) foreclosures in Rhode Island |
8 | during the prior calendar year, excluding any conveyances of property by a deed in lieu of |
9 | foreclosure. |
10 | SECTION 3. Chapter 34-27 of the General Laws entitled "Mortgage Foreclosure and |
11 | Sale" is hereby amended by adding thereto the following section: |
12 | 34-27-7. Notice of tenants of foreclosure sale. -- (a) The mortgagee shall provide to |
13 | each bona fide tenant a written notice: (1) Stating that the real estate is scheduled to be sold at |
14 | foreclosure; (2) Stating the date, time and place initially scheduled for the sale; (3) Informing of |
15 | the availability and advisability of counseling and information services; (4) Providing the address |
16 | and telephone number of the Rhode Island housing help center and the United Way 2-1-1 center; |
17 | (5) Reminding the recipient to continue paying rent to the landlord until the foreclosure sale |
18 | occurs; and (6) Stating that this notice is not an eviction notice. The notice shall be mailed by first |
19 | class mail at least one business day prior to the first publication of the notice required by § 34-27- |
20 | 7. A form of written notice meeting the requirements of this section shall be promulgated by the |
21 | department of business regulation for use by mortgagees no later than sixty (60) days after the |
22 | effective date of this section. The notice may be addressed to "Occupant" and mailed to each |
23 | dwelling unit of the real estate identified in the application for the loan secured by the mortgage |
24 | being foreclosed. Failure of the mortgagee to provide notice as provided herein shall not affect |
25 | the validity of the foreclosure. |
26 | (b) For purposes of this section, a lease or tenancy shall be considered bona fide only if: |
27 | (1) The mortgagor or the child, spouse, or parent of the mortgagor under the contract is |
28 | not the tenant; |
29 | (2) The lease or tenancy was the result of an arms-length transaction; and |
30 | (3) The lease or tenancy requires the receipt of rent that is not substantially less than fair |
31 | market rent for the property or the unit's rent is reduced or subsidized due to a federal, state, or |
32 | local subsidy. |
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1 | SECTION 4. This act shall take effect upon passage. |
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LC004336 | |
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EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO PROPERTY - LANDLORD AND TENANT ACT | |
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1 | This act would create a new process for the eviction of residential tenants in mortgage |
2 | foreclosed property which requires the existence of just cause. |
3 | This act would take effect upon passage. |
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LC004336 | |
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