2017 -- H 5417

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LC000744

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

RELATING TO PROPERTY - MORTGAGE AND FORECLOSURE SALE

     

     Introduced By: Representatives Edwards, Marshall, Coughlin, Maldonado, and
Blazejewski

     Date Introduced: February 08, 2017

     Referred To: House Judiciary

     (Attorney General)

It is enacted by the General Assembly as follows:

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

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

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     34-27-6. Payment of outstanding taxes.

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     (a) In connection with any sale by public auction made under and according to the

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provisions of any mortgage of real estate or any power of sale contained therein or annexed

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thereto, if the mortgagee or an affiliate of the mortgagee is the successful bidder for the real estate

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or property offered for sale, the foreclosure deed shall be recorded in the records of land evidence

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for the municipality where the real estate is located within forty-five (45) days after the date of

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the sale. The deed shall be captioned "foreclosure deed" and the date of the foreclosure shall be

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stated in the deed. This subsection (a) shall not apply to any such sale if, prior to the recording of

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

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entered in any involuntary proceeding against the mortgagor, under any federal or state

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

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sale.

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

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

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

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

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

 

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

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

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during the forty-five (45) day period ending on the day on which the foreclosure deed is recorded

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

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

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

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the application for the municipal lien certificate. Taxes due and owing for purposes of this section

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

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deed is recorded.

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

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

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

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

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the first such violation occurs and a new month commences on the same day (or if there is no

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such day, then on the last day) of each succeeding calendar month until all taxes due and owing

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

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

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

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any individual or legal entity that controls, is controlled by or is under common control with such

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mortgagee, and the term "foreclosure deed" shall mean the mortgagee's deed or other conveyance

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

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provisions of any mortgage of real estate or any power of sale contained therein or annexed

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thereto.

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     SECTION 2. Chapter 34-27 of the General Laws entitled "Mortgage Foreclosure and

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Sale" is hereby amended by adding thereto the following section:

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     34-27-9. Notice of intention to foreclose.

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     (a) A mortgagee that serves a notice of intention to foreclose on a mortgage on residential

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property in this state pursuant to this chapter, shall file in the land evidence records of the city or

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town in which the property is located a copy of the notice at the same time that the mortgagee

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serves the notice on the mortgagor of the property.

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     (b) A mortgagee who is not a resident of this state shall designate and continuously

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maintain an agent, who is a resident of this state, upon whom service may be made of any

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process, notice, or demand required or permitted by law to be served. The mortgagee's

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designation shall be in writing and it shall include the full name and address of the agent and the

 

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street address of each property designated to said agent. The mortgagee's designation shall be

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filed in the land evidence records of the city or town in which the property is located.

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     (c) A mortgagee in violation of this section shall be subject to a fine of up to one

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thousand dollars ($1,000) per month in violation payable to the municipality.

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     SECTION 3. This act shall take effect on September 1, 2017.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PROPERTY - MORTGAGE AND FORECLOSURE SALE

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     This act would increase the fines for failing to file a foreclosure deed. This act would also

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require mortgagees, upon filing notice of intent to foreclose against a mortgagor, to file a copy of

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that notice in the land evidence records of the city or town in which the property is located and

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designate an agent for service of process within the state.

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     This act would take effect on September 1, 2017.

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