November 17, 2018
The City of Providence, Rhode Island, announced a new Real Estate Non-Utilization Tax on vacant and abandoned property within the City. The Tax was approved by Providence City Council and signed into law by Mayor Elorza On October 9, 2018.
Pursuant to the new law, the Providence Department of Inspection and Standards will inspect a property and, upon designating it as vacant and abandoned, will notify owners in writing of the date of designation and the date upon which the non-utilization tax will be imposed. The additional tax is set at 10 percent of the assessed value of the real estate and will be imposed on structures that have been determined to be continuously unoccupied, under continuous citation, not maintained as evidenced by the exterior condition, or a lot with no existing structure that is littered with trash and obviously abandoned. It is important to note that under the Providence Ordinance, a mortgagee is considered an “owner.”
Among several other unrelated exceptions, the non-utilization tax will not be imposed or apply to properties which possess a first mortgage insured under any federally sponsored mortgage program. This includes those insured by the Federal Housing Administration (FHA), the Federal Home Loan Mortgage Corporation (Freddie Mac), or the Federal National Mortgage Association (Fannie Mae).
These changes currently do not impact any foreclosure proceedings brought as judicial or non-judicial foreclosure actions and will only impact them once a lawsuit is filed by the City of Providence or a lien is recorded with the respective town or city’s Land Evidence Records.
Please contact the undersigned for more information.
Justin M. Pierce
Associate Attorney, Litigation & Eviction
RI Licensed Attorney, Orlans PC
Direct: 781 790 7842 | Main: 781 790 7800
Regina M. Slowey
Managing Litigation Attorney
Direct: 248 502 3070 | Main: 248 502 1400