Sen. Crowley and Rep. Craven bill to fix loophole in Madeline Walker tax lien program signed into law
STATE HOUSE – Legislation introduced by Sen. Elizabeth A. Crowley (D-Dist. 16, Central Falls, Pawtucket) and Rep. Robert E. Craven (D-Dist. 32, North Kingstown) to close a loophole in the Madeline Walker tax lien program, administrated by the Rhode Island Housing and Mortgage Finance Corporation, has been signed into law by the governor.
“This bill ensures that Rhode Island Housing can continue to help homeowners who are facing losing their homes during difficult times. The Madeline Walker Act is working, and this amendment ensures it continues to work,” said Senator Crowley. “The Madeline Walker Act is a protective law that helps many, especially senior citizens, in our state, and this amendment further strengthens this important law. Since the Act went into effect in 2007, Rhode Island Housing has purchased the tax liens on more than 4,000 homes, and about 3,100 of those liens have been redeemed,” she added.
“The Madeline Walker Act has been a godsend to many Rhode Island homeowners struggling to stay within their homes. This bill will strengthen the act and allow it to continue functioning well into the future so that others at risk of losing their homes can rest a bit easier and know that help is available,” said Representative Craven.
The legislation (2017-S 0843A / 2017-H 6336) would protect the Rhode Island Housing and Mortgage Finance Corporation from liability for any violations of environmental or minimum-housing standards, or any liability concerning the tax title property, for five years from the date of the tax sale. Most tax lien purchasers can foreclose after one year, during which time they are protected from liability because they have no authority to address property conditions. Rhode Island Housing, by contrast, is not able to foreclose on homes purchased through the Madeline Walker Act for a five year time period. Like other lien purchasers, they are protected from liability for the first year, but not for the remaining four years, even though they are powerless to address property conditions for the duration of the five year period.
The legislation corrects that liability gap, so that Rhode Island Housing is protected throughout the five year period.
The Madeline Walker Act of 2006 is named after an 81-year-old Providence woman who was evicted from her home in December 2005 because she had unknowingly failed pay a sewer bill of $496. Under the law, effective January 1, 2007, cities, towns, and other taxing authorities are required to notify Rhode Island Housing of delinquent liens well in advance of tax sales.
Rhode Island Housing will then investigate the factors that have led to the failure to pay the liens and take steps to keep the individuals in their homes. The legislation also authorizes cities and towns to sell all of their delinquent liens to Rhode Island Housing, which will then work to help the homeowners keep their homes.
For more information, contact:
Andrew Caruolo, Publicist
State House Room 20
Providence, RI 02903