Tax-Lien Reform Reintroduced in the House

The bill making it more difficult for the government to sell a house out from under its owner without the owner knowing it was re-introduced to the RI House yesterday. Representatives Joseph Almeida (D-Providence), Grace Diaz (D-Providence) and Thomas Slater (D-Providence) introduced House Bill 6704 which, if passed, would make 3 major changes to the process of tax-lien sales.

1. The bill would give the Rhode Island Housing and Mortgage Finance Corporation the right of first refusal in tax-lien sales involving residential properties of up to 4 units and asks RIHMFC to develop regulations that give delinquent owners an opportunity to buy back their homes...

Where the property subject to tax sale is residential and contains four (4) or less units, the Rhode Island Housing and Mortgage Finance Corporation shall have a right of first refusal to acquire the tax lien, and may assist the owner to discharge the lien or take title and acquire the property in its own name pursuant to regulations to be developed by the corporation, consistent with its purposes.

2. The bill would require at least two rounds of notification of the owner, one by registered mail and one by certified mail, before a tax lien sale...

Whether or not the person or general partnership to whom the estate is taxed as of December 31st prior to the tax sale is a resident of this state, the collector shall, in addition to the foregoing, notify the taxpayer of the time and place of sale first by registered mail not less than sixty (60) days before the date of sale or any adjournment of the sale, and again by certified mail not less than forty (40) days before the date of sale or any adjournment of the sale...

3. The bill would require notification of the Department of Elderly Affairs in cases involving owners who had received tax abatements due to their age. Failure to notify Elderly Affairs in these cases would nullify a tax-sale...

In the event the person to whom the estate is taxed is listed in the records of the assessor and/or collector as having applied for and been granted a property tax abatement based wholly or partially on the age of the taxpayer, then the collector shall also notify the department of elderly affairs by registered and certified mail as described herein. Failure to notify the department of elderly affairs shall nullify any tax sale.

The bill has been referred to the House Finance Committee. All of these provisions were included in a similar version of the bill last year, but were removed sometime in the committee process. We'll see if they survive this year's session.