When a Rhode Island property owner fails to pay property taxes on their real estate, a tax sale may be triggered, where the property is sold at a public auction to the highest bidder. Whoever is the highest bidder may then take possession of the property after paying off the delinquent taxes. After a tax sale occurs, and if certain conditions are met, the delinquent property owner may still have a right of redemption and be able to reclaim their property by paying the past-due taxes.
The Rhode Island Supreme Court recently decided an appeal by a delinquent property owner who was attempting to reclaim his property after it was sold to another party in a tax sale. Under Rhode Island tax law, the purchaser of a property at a tax sale may commence an action to foreclose the right of redemption of the previous owner by filing a petition with the court and giving notice and an opportunity to redeem to the previous owner and other lienholders on the property at issue.
The plaintiff in the recently decided case purchased a property, formerly owned by the defendant, in a tax sale conducted by the city of North Providence. Under state law, the plaintiff filed a petition in state court to foreclose the previous owner’s right of redemption and gave notice to the defendant that they had 20 days from receipt of the notice to redeem the property or answer the petition, or the right of redemption would be forfeited permanently. The defendant did not answer the petition, nor did they pay the redemption amount within 20 days, however, they did later contact the plaintiff and discussed possibly redeeming the property after the 20 days had expired. The defendant eventually delivered a check to the plaintiff for the redemption amount; however, it was not rendered until two days after the agreed-upon deadline, and the plaintiff rejected the check.
The plaintiff proceeded with their foreclosure action, and the superior court later enjoined the defendant’s right of redemption, and the defendant appealed the ruling to the Rhode Island Supreme Court. The defendant admitted that the 20-day deadline was not met, but argued that the post-deadline offer and the defendant’s subsequent tender of the check after the deadline bound the plaintiff to an implied contract with the defendant. The court disagreed and affirmed the superior court judgment, noting that the tax law governing tax sales and allowing for a limited right of redemption was clear, and that the defendant admittedly missed the deadline to answer, and then failed to abide by the plaintiff’s subsequent offer for redemption. As a result of the Supreme Court ruling, the defendant will be unable to pay off the taxes and reclaim his property, as it now belongs to the plaintiff.
Are You Dealing with a Rhode Island Property Tax Issue?
The intersection of tax law and property law is a complex, and tax sales are no exception. Whether you have purchased a property at a tax sale and seek to retain a property, or if your property was sold at a tax sale and you want to exercise your right of redemption, a qualified Rhode Island real estate attorney can help you follow guidelines and meet deadlines to prevent an unexpected and unfortunate result. The Providence real estate attorneys at Bilodeau Capalbo, LLC are experienced in property law and tax issues and can help you protect your interests before and after a tax sale. Contact a Rhode Island property attorney today. To schedule a no-obligation consultation to discuss your case with an attorney at Bilodeau Capalbo, contact our office at 401-300-4055.