Tax Lien Sales in Rhode Island

Going once, going twice… SOLD!

Buying real estate at municipal tax lien sales in the state of Rhode Island can be an exciting way to invest in Rhode Island real estate.  Like all investments, it of course does not come without risk.  The Law Offices of Richard Palumbo regularly represents the buyers of real estate at tax lien sales.  Before buying real estate at tax lien sales it is important to learn about the entire process.  The prudent investor will investigate the title of any property that the buyer is going to attempt to purchase.  It is also advisable to research the property prior to bidding.

What happens at a Rhode Island tax lien sale?

There are different types of tax lien sales in Rhode Island.  There are 39 municipalities (cities or towns) in the state of Rhode Island.  There are 8 incorporated cities (Providence, Cranston, Warwick, Central Falls, East Providence, Newport, Pawtucket and Woonsocket).  There are 31 Towns in the state of Rhode Island.  All of the 39 cities and towns in Rhode Island periodically (i.e. annually) hold tax lien sales for un-paid real estate property taxes.  When an owner of real estate becomes delinquent in the payment of their real estate taxes, the municipal government at some point will advertise and sell the tax lien at a tax lien sale.  There are also municipal water, sewer and fire district tax lien sales in the state of Rhode Island.  You should contact the individual cities and towns, water departments and sewer departments to obtain the dates of the next tax lien sales.  You should be able to obtain a list of properties that are being sold at the next tax lien sale.  All of the tax lien sales are also advertised in the Providence Journal or other newspapers.  Every bidder at a tax lien sale is given a form as required by Rhode Island general law.  The real estate is generally auctioned-off or sold in the order that the property appears on the tax sale list.  The tax sale bidder's registration form will require some information including whether or not you are a Rhode Island resident.  This form must be signed and notarized.  Proper identification may not be needed to excercise one's right to vote but proper identification will be required to buy property at a tax lien sale.

The minimum bid at the tax lien sale cannot be less than the total amount to redeem the property, plus costs associated with offering the parcel for sale.  Often, aggressive bidders will bid down (i.e. full price purchase for a 1% interest in the lien).  All payments must be either cash or cashier’s check.

How can I find properties that are on the tax sale list?

The properties that are going to be sold at a tax sale in Rhode Island are advertised prior to the tax sale.  Most municipalities also have property lists available to the general public.  The water departments and sewer departments should also have lists available.  Plat maps and field cards can be located in the Town Assessor’s Office.

Will I get a tax lien when I buy at a tax sale?

Yes, you will get a tax collector’s deed subject to the right of redemption.  The right of redemption is the owner’s right to redeem the property by paying the taxes, costs, expenses and interest.  After the right of redemption is foreclosed in Rhode Island Superior Court, all previous title rights are extinguished, and you own the property free and clear.  There are however, liens that may survive the foreclosure sale.  For example, liens filed by governmental agencies in relation to the environmental protection act will survive the foreclosure sale.  If the Internal Revenue Serv