AN ACT RELATING TO TAXATION -- PROPERTY EQUITY PROTECTION ACT (Establishes the Property Equity Protection Act to protect property owners from losing their equity when their property is seized to pay a debt to the government by allowing ample time to pay off the debt and adequate notice of due process.)

S2713

2026 -- S 2713
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LC005510
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO TAXATION -- PROPERTY EQUITY PROTECTION ACT

Introduced By:
Senators de la Cruz, and Rogers

Date Introduced:
February 27, 2026

Referred To:
Senate Judiciary
It is enacted by the General Assembly as follows:
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SECTION 1. Title 44 of the General Laws entitled "TAXATION" is hereby amended by
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adding thereto the following chapter:
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CHAPTER 9.1
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PROPERTY EQUITY PROTECTION ACT
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44-9.1-1. Short title.

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This chapter shall be known and may be cited as the “Property Equity Protection Act."
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44-9.1-2. Purpose.

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The purpose of this chapter is to protect property owners from losing their equity when
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their property is seized to pay a debt to the government by allowing ample time to payoff the debt
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and adequate notice of due process.
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44-9.1-3. Redemption.

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(a) Any person may redeem a tax debt on behalf of the property owner of record within
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five (5) years after the tax debt becomes delinquent or after five (5) years but before the delivery
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of a treasurer’s deed to the purchaser or the purchaser’s heirs or assigns for property qualifying
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pursuant to the provisions of subsection (b) of this section.
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(b) No tax lien or deed may be foreclosed unless the amount of the outstanding tax debt
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against the parcel, plus reasonable penalties, interest, and appropriate fees, exceeds five percent
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(5%) of the fair market value of the parcel as shown by the tax assessor’s then-current valuation of
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the parcel, or fifty thousand dollars ($50,000), whichever is lower. If the amount of the amount of

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the outstanding tax debt against the parcel, plus reasonable penalties, interest, and appropriate fees,
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exceeds fifty thousand dollars ($50,000), then the tax lien or deed may be foreclosed pursuant to
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the provisions of chapter 9 of title 44.
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44-9.1-4. Competitive auctions.

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(a) After the expiration of the statutory redemption period, the holder of a tax lien may file
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a foreclosure action in state court forcing the sale of the property pursuant to chapter 9 of title 44.
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Statutory provisions governing tax sales are in addition to any other statutory provisions.
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(b) The sale shall include an online bidding process in which bids are received
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electronically over the internet in a real-time, competitive-bidding event.
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(c) The sale shall be advertised in a multiple listing service for at least thirty (30) days prior
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to the auction.
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(d) When a taxing jurisdiction sells the right to collect a tax debt, the winning bidder shall
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be the person who pays the whole amount of delinquent taxes, interest, penalties, and charges due
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on the property, and who in addition offers to accept the lowest rate of interest on the amount so
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paid to redeem the property.
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(e) When a taxing jurisdiction sells a property to satisfy a tax debt, the property shall be
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sold to the highest bidder.
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(f) A private party may be contracted to operate and advertise the auction and to advertise
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the property. The contract may provide that if the property sells for more than the amount of the
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taxes, penalties, interest, and costs charged against the property, the private party operating and
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advertising the auction and advertising the property may receive up to three percent (3%) of the
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amount of the sale price of a property that is more than the amount of the taxes, penalties, interest,
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and costs charged against the property.
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44-9.1-5. Notice requirements.

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(a) The tax collector shall certify that the following notices have been made at least sixty
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(60) days, but not more than one hundred twenty (120) days, prior to a tax sale.
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(b) The following persons shall be notified by certified mail with return receipt requested,
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or by registered mail if the notice is to be sent outside the continental United States, at least sixty
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(60) days prior to a tax sale, again at least thirty (30) days prior to sale, and again thirty (30) days
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before issuance of a treasurer’s deed following the sale:
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(1) Any property owner of record according to the records of the recorder in the
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municipality in which the property is located. If notice to any property owner is returned
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undeliverable, a diligent search must be undertaken to locate and provide notice to property owners
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of record.

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(2) Any lienholder of record who has recorded a lien against the property if an address
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appears on the recorded lien.
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(3) Any mortgagee of record if an address appears on the recorded mortgage.
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(4) Any vendee of a recorded contract for deed if an address appears on the recorded
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contract.
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(5) Any other lienholder who has applied to the tax collector to receive notice if an address
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is supplied to the collector.
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(6) Any person to whom the property was assessed on the tax roll for the year in which the
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property was last assessed.
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(7) Any lienholder of record who has recorded a lien against a mobile home located on the
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property if an address appears on the recorded lien.
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(8) Any legal titleholder of record of property that is contiguous to the property described
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in the tax certificate, if the property described is submerged land or common elements of a
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subdivision and if the address of the titleholder of contiguous property appears on the record of
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conveyance of the property to the legal titleholder. As used in this chapter, the term “contiguous”
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means touching, meeting, or joining at the surface or border, other than at a corner or a single point,
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and not separated by submerged lands. Submerged lands lying below the ordinary high-water mark
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which are sovereignty lands are not part of the upland contiguous property for purposes of
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notification.
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(9) Any person who has requested to receive notices of delinquent taxes.
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(c) For purposes of determining who shall be noticed, the tax collector shall contract with
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a title company or an abstract company to provide a property information report. The tax collector
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may select any title or abstract company, regardless of its location, as long as the fee is reasonable,
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the required information is submitted, and the title or abstract company is authorized to do business
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in this state. The tax collector may advertise and accept bids for the title or abstract company if the
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tax collector considers it appropriate to do so.
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(d) The tax collector shall enclose with every notice required by this section, and with each
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delinquent tax notice, a statement as follows, in the five (5) most common languages in the state:
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"WARNING: There are unpaid taxes on property at (address) which you may own, may
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have a legal interest in, or may be contiguous to your property. The property will be (or was) sold
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at public auction on (date) unless the back taxes are paid. To make payment, or to receive further
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information, contact (tax collector) immediately at (address), (telephone number). You may be
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eligible for free legal assistance if you reach out to (name of free legal services organization) at
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(address), (telephone number), for legal advice about how to respond to this notice."

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(e) The tax collector shall cause a printed copy of the notices to be published in a newspaper
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of general circulation in the county where the property is located, including the warning statement.
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(f) The tax collector shall cause a copy of the notices to be posted in a conspicuous place
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on the property by a constable certified pursuant to the provision of § 9-5-10.1, including the
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warning statement.
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(g) The tax collector shall post a copy of the notices in a conspicuous location on its website
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and at its physical offices.
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(h) The tax collector shall cause a copy of the notice to be recorded, including the warning
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statement. A person acquiring an interest in the property after the notice has been recorded is
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deemed to be on notice of the pending sale, and no additional notice is required. The sale of the
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property automatically releases any recorded notice of tax sale for that property. If the property is
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redeemed, the tax collector shall record a release of the notice upon payment of the recording fee.
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(i) Fees and costs incurred by the tax collector related to the notifications required in this
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section shall be paid from the proceeds of the tax sale or added to the opening bid for a tax lien.
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44-9.1-6. Surplus proceeds.

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(a) When any property is sold at a tax sale, proceeds shall be distributed in the following
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order of priority:
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(1) For payment of delinquent taxes and satisfaction of existing tax liens, plus reasonable
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penalties, interest, and fees;
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(2) To governmental units holding a lien of record against the payment, including any tax
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debts not giving rise to the tax sale;
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(3) Any surplus belongs to the owner of the property prior to the tax sale and shall be
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promptly returned to the owner, or the owner’s heirs or assigns. The tax collector shall notify the
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owner of the surplus. The owner of the surplus may claim it by contacting the tax collector and
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providing proof of ownership of the parcel.
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(4) If the owner or the owner’s heirs or assigns fail to claim the surplus or there are multiple
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claims for the surplus, within one hundred twenty (120) days after the sale, the tax collector shall
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file an interpleader action in superior court or pay the surplus funds according to the tax collector’s
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determination of the priority of claims. Fees and costs incurred by the tax collector related to the
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disbursement of the surplus, including fees and costs related to an interpleader action, shall be paid
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from the surplus funds. If the tax collector files an interpleader action, the court shall determine the
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distribution of funds based upon the priority of liens filed. The court shall award reasonable fees
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and costs from the interpleaded funds. An action to require payment of surplus funds is not ripe
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until the claim and review periods expire.

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(5) The failure of any person, other than the owner or the owner’s heirs or assigns, to file
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a claim for surplus funds within the one hundred twenty (120) days after the sale or the filing of an
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interpleader action, whichever is later, constitutes a waiver of interest in the surplus funds, and all
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claims thereto are forever barred.
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(6) Any surplus that remains unclaimed after one hundred twenty (120) days shall be
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administered by the state as pursuant to the provisions of chapter 9 of title 44.
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44-9.1-7. Limits on interest rates and penalties.

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(a) Except as otherwise expressly provided by law, taxes owed the state or any local taxing
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jurisdiction shall bear interest at an annual rate equal to the bank prime loan rate as posted by the
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board of governors of the federal reserve system in statistical release H. 15 or any publication that
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may supersede it, plus three percent (3%), to accrue monthly. Such annual interest rate shall be
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determined for each calendar year based on the first weekly posting of statistical release H. 15 on
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or after January 1 of each calendar year. Interest shall begin to accrue from the date the tax is past
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due until the date the tax is paid.
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(b) No other penalty shall apply to tax debts, except the reasonable costs of collection may
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be added to any tax debt.
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SECTION 2. Section 44-9-25 of the General Laws in Chapter 44-9 entitled "Tax Sales" is
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hereby amended to read as follows:
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44-9-25. Petition for foreclosure of redemption.
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(a) After one year from a sale of land for taxes, except as provided in §§ 44-9-19 — 44-9-
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22, whoever then holds the acquired title may bring a petition in the superior court for the
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foreclosure of all rights of redemption under the title. The petition shall set forth a description of
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the land to which it applies, with its assessed valuation, the petitioner’s source of title, giving a
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reference to the place, book, and page of record, and other facts as may be necessary for the
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information of the court. Two (2) or more parcels of land may be included in any petition brought
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by any purchaser of a title or titles, if the parcels are in the same record ownership at the time of
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bringing the petition (Form 5).
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(b) No more than one foreclosure petition may be filed for each tax deed regardless of the
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number of tax title holders having an interest under such deed. If more than one petition is filed,
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the petitions shall be consolidated for hearing by the court. The court shall not award more than
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one attorneys’ fee to the petitioners.
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(c) Notwithstanding the provisions of subsection (a) of this section, no petition for
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foreclosure of redemption shall be filed or entertained by any court with respect to any property or
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title acquired by the Rhode Island Housing and Mortgage Corporation pursuant to § 44-9-8.3 of the

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general laws until after five (5) years from the sale of said property or title for taxes.
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(d) Notwithstanding the provisions of subsection (a) of this section, no petition for
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foreclosure of redemption shall be filed or entertained by any court with respect to any property
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unless the amount of the outstanding tax debt against the parcel, plus reasonable penalties, interest,
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and appropriate fees, exceeds five percent (5%) of the fair market value of the parcel as shown by
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the tax assessor’s then-current valuation of the parcel, or fifty thousand dollars ($50,000),
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whichever is lower, pursuant to § 44-9.1-3.
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SECTION 3. This act shall take effect upon passage.
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO TAXATION -- PROPERTY EQUITY PROTECTION ACT
***
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This act would establish the property equity protection act to protect property owners from
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losing their equity when their property is seized to pay a debt to the government by allowing ample
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time to payoff the debt and adequate notice of due process.
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This act would take effect upon passage.
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LC005510
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