2016 -- H 7540

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LC004676

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO PROPERTY - CONDOMINIUM LAW

     Introduced By: Representatives Shekarchi, and Solomon

     Date Introduced: February 10, 2016

     Referred To: House Judiciary

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 34-36.1-3.21 of the General Laws in Chapter 34-36.1 entitled

"Condominium Law" is hereby amended to read as follows:

     34-36.1-3.21. Foreclosure of condominium lien. -- (a) (1) If a condominium unit owner

shall default in the payment of any assessment, fine, or any other charge which is a lien on the

unit in favor of the association or its assigns, then it shall be lawful for the association or its

assigns, through its executive board, to sell the unit of any defaulting unit owner and the benefit

and equity of redemption of the defaulting unit owner and his or her heirs, executors,

administrators, and assigns therein, at public auction upon the premises or at such other place, if

any, as may be designated for that purpose by the association or its assigns.

      (2) The association must first mail written notice of the time and place of sale to the

defaulting unit owner, at his or her last known address and the holder of the first mortgage or

deed of trust of record at the address for service required by subdivision 34-36.1-3.16(b)(4), both

by certified mail, return receipt requested, at least twenty (20) days prior to publishing said

notice; second, the association must publish the same at least once each week for two (2)

successive weeks in a public newspaper. The time of sale shall be at least fifteen (15) days after

the publication of the first notice in a public newspaper. Publication shall be as follows:

      (i) If the condominium is situated in the city of Central Falls, in a public newspaper

published daily in the city of Pawtucket;

      (ii) If the condominium is situated in the town of North Providence, in a public

newspaper published daily in the city of Providence;

      (iii) If the condominium is situated in any of the towns of Cumberland, Lincoln,

Smithfield or North Smithfield, in a public newspaper published daily in either the city of

Pawtucket, Woonsocket, or Providence;

      (iv) If the condominium is situated in the county of Providence elsewhere than in the

above last named cities and towns, in a public newspaper published daily in the city of

Providence;

      (v) If the condominium is situated in the county of Newport, in a public newspaper

published daily in the city of Newport; but if there be no such newspaper so published, then in

some public newspaper published anywhere in the county of Newport;

      (vi) If the condominium is situated in any of the counties of Bristol, Kent, or

Washington, in a public newspaper published daily in the city or town in which the condominium

is situated; or in some public newspaper published daily in the county in which the condominium

is situated or in a public newspaper published daily in the city of Providence.

      (3) The sale may be adjourned from time to time, provided that publishing of the notice

shall be continued, together with a notice of the adjournment or adjournments, at least once each

week in the same newspaper; and third, the association must mail written notice of the same to

any person or entity having an interest of record in the unit, recorded not later than thirty (30)

days prior to the date originally scheduled for the sale, including without limitation, the holder of

any mortgage or deed of trust with respect to the unit, to the address of the person or entity may

have provided for that purpose in the land evidence records or at any other address the person or

entity may have provided the association in writing, such notice to be given by regular or certified

mail, return receipt requested, at least ten (10) days prior to the date originally scheduled for such

sale; and in his or her or their own name or names, or as the attorney or attorneys of the

defaulting unit owner (for that purpose by these presents duly authorized and appointed with full

power of substitution and revocation) to make, execute, and deliver to the purchaser or purchasers

at the sale a good and sufficient deed or deeds of the defaulted condominium unit, in fee simple,

and to receive the proceeds of the sale or sales, and from the proceeds to retain all sums secured

by the lien in favor of the association as of the date of such sale together with all expenses

incident to such sale or sales, or for making deeds hereunder, and for fees of counsel and

attorneys, and all costs or expenses incurred in the exercise of such powers, and all taxes,

assessments, and premiums for insurance, if any, either theretofore paid by the association, or its

assigns, or then remaining unpaid upon the defaulted condominium unit, rendering and paying the

surplus of the proceeds of sale, if any there be, over and above the amounts to be retained, and

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paid to other encumbrances of record, together with a true and particular account of such sale or

sales, expenses, and charges, to the defaulting unit owner, or his or her heirs, executors,

administrators or assigns. The sale or sales shall forever be a perpetual bar against the defaulting

unit owner and his or her heirs, executors, administrators and assigns, and all persons claiming

the defaulted condominium unit, so sold, by, through or under him, her, them or any of them

subject to rights of redemption referenced herein.

      (4) Within seven (7) days after the foreclosure sale, the association shall send an

additional written notice to the defaulting unit owner, at their last known address and the holder

of the first mortgage or deed of trust of record on the day of the foreclosure sale, as appears in the

land evidence records, as provided in subdivision 34-36.1-3.16(b)(4) by certified mail, return

receipt requested, and first class mail, identifying the name of the highest bidder and the amount

of the bid.

      (b) Any foreclosure sale held by the association pursuant to subsection (a) above, and the

title conveyed to any purchaser or purchasers pursuant to such sale, shall be subject to any lien or

encumbrance entitled to a priority over the lien of the association pursuant to § 34-36.1-3.16(b).

      (c) Any foreclosure sale held by the association pursuant to subsection (a) above, shall

be subject to a thirty (30) day right of redemption running in favor of the defaulting unit owner

and the holder of the first mortgage or deed of trust of record. The right of redemption shall be

exercised by tendering payment to the association in full of all assessments due on the unit

together with all attorney's fees and costs incurred by the association in connection with the

collection and foreclosure process within thirty (30) days of the date of the post-foreclosure sale

notice sent by the association pursuant to subdivision (a)(4) above. Otherwise, the right of

redemption shall terminate thirty (30) days from the date of the post-foreclosure sale notice sent

by the association pursuant to subdivision (a)(4) above.

      (d) Upon request the association shall provide to any person or entity having an interest

of record in the unit: (1) an itemized statement of the amounts owed the association by the

defaulting unit owner, separating common expense assessments referred to in § 34-36.1-

3.16(b)(2) from interest, attorney's fees, fines and other charges secured by the lien of the

association; and (2) a copy of the most recent periodic budget adopted by the association pursuant

to § 34-36.1-3.15(a).

     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 PROPERTY - CONDOMINIUM LAW

***

     This act would amend the rules for the mailing of notices of condominium lien

foreclosure by adding a post-sale notice to the unit owner, and would grant the unit owner a right

of redemption.

     This act would take effect upon passage.

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LC004676

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