Chapter 392

2012 -- H 7662

Enacted 06/21/12

 

A N A C T

RELATING TO COURTS AND CIVIL PROCEDURE--PROCEDURE GENERALLY -- LEVY AND SALE ON EXECUTION--PROPERTY SUBJECT TO TAXATION

 

     Introduced By: Representatives Jackson, O`Neill, Gallison, Lally, and Keable

     Date Introduced: February 16, 2012

 

It is enacted by the General Assembly as follows:

 

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

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

 

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

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

thousand dollars ($300,000) five hundred thousand dollars ($500,000) in the land and buildings

may be acquired pursuant to this section by an owner or owners of a home or one or all an

individual who rightfully possess possesses the premise by lease premises by lease, as life tenant,

as a beneficiary of a revocable or irrevocable trust or otherwise, and who occupy or intend

occupies or intends to occupy the home as a his or her principal residence. The estate of

homestead provided pursuant to this section shall be automatic by operation of law, and without

any requirement or necessity for the filing of a declaration, a statement in a deed, or any other

documentation. The estate shall be exempt from the laws of attachment, levy on execution and

sale for payment of debts or legacies except in the following cases:

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

assessments;

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

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

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

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

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

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

building or buildings are situated;

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

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

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

institution or a person regulated or licensed under title 19.

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

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

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

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

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

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

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

any debt owing to a financial institution, or private mortgages, regulated institution, a debt

secured by a mortgage or other voluntary lien on a home, or a mechanics' lien on the property

comprising the estate as provided for under chapter 28 of title 34. Notwithstanding any other

provisions of law, it shall not be necessary to record a declaration of homestead in order to take

advantage of the homestead estate exemption.

 

     SECTION 2. Section 44-3-38 of the General Laws in Chapter 44-3 entitled "Property

Subject to Taxation" is hereby amended to read as follows:

 

     44-3-38. Transfer of property to trust. -- Any exemption, freeze of tax rates and/or

valuation granted to any individual or individuals pursuant to this chapter is not affected if the

eligible individuals transfer the property to a revocable living trust pursuant to the provisions of

the general laws and/or pursuant to any public law or municipal ordinance shall not be affected if

the otherwise eligible individual: (1) Transfers an ownership interest in the property while

retaining a life estate in the property; or (2) Transfers an ownership interest while leasing the

property back, but only where the lessee was the owner of the property prior to the transfer to the

lessor; or (3) Transfers the property to a revocable or irrevocable living trust, if and so long as the

otherwise eligible individual resides in such property and the otherwise eligible individual or the

trustee is legally obligated to pay property tax on such property by contract, by agreement, by the

terms of the trust instrument, or otherwise by law. The provisions of this section shall be

applicable to any such transfer, regardless of when the transfer is made.

     

     SECTION 3. This act shall take effect upon passage.

     

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LC00900

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