If you don't pay your property taxes in Rhode Island, you might lose your home to a tax sale. Fortunately, you'll get some time—usually about a year—after the sale to pay the overdue amounts before permanently losing ownership of the property.
But if you don't pay the delinquent amounts, plus interest, penalties, and costs during the redemption period (see below), the purchaser can get ownership of your home.
If you fail to pay your property taxes, the past-due amount becomes a lien on your home. This type of lien almost always has priority over other liens, including mortgages.
Generally, when taxes remain unpaid, the taxing authority will eventually:
Though, in some places, a sale isn't held; instead, the taxing authority executes its lien by taking title to the home. State law then generally provides a procedure for the taxing authority to dispose of the property, usually by selling it.
In other jurisdictions, the taxing authority uses a foreclosure process before holding a sale.
Under Rhode Island law, if you get behind in paying your real property taxes, the tax collector can sell your home, or a portion of the property, at a public auction. (R.I. Gen. Laws § 44-9-8).
At the auction, the smallest undivided part of your property, but not less than 1%, or the whole parcel if no person offers to take an undivided part will be sold for the owed amount of overdue taxes, assessments, rates, liens, interest, and necessary intervening charges. (R.I. Gen. Laws § 44-9-8).
Following the auction, the winning bidder gets a deed to the home, or a portion of the parcel depending on the situation, subject to the redemption period. After the redemption period expires, the winning bidder then has to foreclose the right to redeem to get title to the property. (R.I. Gen. Laws § 44-9-12).
After a tax sale, in most cases, the winning bidder has to wait one year before filing a petition with the court to foreclose your right to redeem the property. (R.I. Gen. Laws § 44-9-21, § 44-9-25). A petition to foreclose redemption may not be filed for five years, though, after a sale of certain owner-occupied property that the Rhode Island Housing and Mortgage Corporation acquires. (R.I. Gen. Laws § 44-9-25.)
Under Rhode Island law, you get the right to redeem the property at any time up until the winning bidder files the foreclosure petition. (R.I. Gen. Laws § 44-9-21). So, the redemption period usually lasts at least one year after the sale.
Again, Rhode Island law gives you the right to redeem up until the purchaser files the petition for foreclosure. (R.I. Gen. Laws § 44-9-21). And you might still be able to redeem after the foreclosure begins, but you'll need to file an answer to the foreclosure petition or file a motion with the court prior to the fixed return day. The court then has the option of allowing you to redeem. (R.I. Gen. Laws § 44-9-29, § 44-9-30).
Once the foreclosure is final, however, the winning bidder gets a deed to your property (or a portion of it), and you can't redeem. (R.I. Gen. Laws § 44-9-24). If you want to redeem your home during the foreclosure, talk to an attorney as soon as possible. A lawyer can ensure that you take proper steps to complete the redemption.
You might, under rare circumstances, be able to vacate the decree foreclosing the right of redemption. The only allowed reasons are if notice of the petition was inadequate or the taxes for which the property was sold had been paid or were not due and owing because the property was exempt from the payment of such taxes. But you must file a separate action within six months after the court entered the decree. (R.I. Gen. Laws § 44-9-24). If you want to try to vacate the decree, talk to a lawyer.
If a third party, like an investor, is the winning bidder at the tax sale, you generally must pay:
If the city or town is the winning bidder at the tax sale, you'll have to pay similar charges. (R.I. Gen. Laws § 44-9-19).
While Rhode Island law provides a redemption period after a tax sale, it's better to take steps to make your taxes affordable before you get behind. For instance, you could:
If you want more information about property tax and redemption laws in Rhode Island, consider talking to a foreclosure lawyer, tax lawyer, or real estate lawyer who has experience with property tax issues.
To learn more about property taxes and other aspects of homeownership in general, get Nolo's Essential Guide to Buying Your First Home by Ilona Bray, J.D., Attorney Ann O'Connell, and Marcia Stewart.