(a)  If an affiliated licensee is appointed by the principal broker or his or her designee to represent a buyer, seller, tenant, or landlord in a real estate transaction and obtains the written consent of a buyer, seller, tenant, or landlord with an executed, mandatory relationship disclosure to represent that person as a designated client representative, the licensee owes the following legal duties and obligations to his or her client:

(1)  To perform the terms of the client representation contract, if any, with reasonable skill and care;

(2)  To promote the client’s best interest in good faith and honesty;

(3)  To protect the client’s confidential information during the relationship and after its termination;

(4)  To perform agreed-upon ministerial acts timely and competently;

(5)  To perform these acts with honesty, good faith, reasonable care, and skill; and

(6)  To properly account for money or property placed in the care and responsibility of the principal broker.

Terms Used In Rhode Island General Laws 5-20.6-5

  • Affiliated licensee: means a licensed real estate salesperson or real estate broker as defined in §?5-20. See Rhode Island General Laws 5-20.6-2
  • Buyer: means a person who acquires or seeks to acquire an ownership interest in real estate. See Rhode Island General Laws 5-20.6-2
  • Client: means a buyer, seller, tenant, or landlord who has agreed to representation by a licensee in a real estate transaction, evidenced by an executed, mandatory relationship disclosure, to whom a licensee owes the duties set forth in §?5-20. See Rhode Island General Laws 5-20.6-2
  • Confidential information: means the following information:

    (i)  A buyer's or tenant's willingness to pay more than the offered price;

    (ii)  A seller's or landlord's willingness to accept less than the asking price;

    (iii)  A buyer's or tenant's previous offers made to purchase or lease real estate;

    (iv)  A seller's or landlord's previous offers received to purchase or lease real estate;

    (v)  Any parties' motivating factors;

    (vi)  Any parties' willingness to agree to other financing terms;

    (vii)  Any facts or suspicions regarding circumstances, other than known, material defects of a property that a licensee must in all cases disclose, that may psychologically impact or stigmatize any real estate; or

    (viii)  Any information about a party's assets, liabilities, income, or expenses. See Rhode Island General Laws 5-20.6-2

  • Contract: A legal written agreement that becomes binding when signed.
  • Customer: means a buyer, seller, tenant, or landlord who has agreed to certain assistance by a licensee in a real estate transaction, evidenced by an executed, mandatory relationship disclosure, to whom a licensee owes the duties set forth in §?5-20. See Rhode Island General Laws 5-20.6-2
  • Designated client representative: means an affiliated licensee appointed by the principal broker or his or her designee to represent a buyer, seller, tenant, or landlord in a real estate transaction. See Rhode Island General Laws 5-20.6-2
  • Designee: means an associate broker as defined in §?5-20. See Rhode Island General Laws 5-20.6-2
  • Landlord: means a person who leases or attempts to lease his or her ownership interest in real estate to another person. See Rhode Island General Laws 5-20.6-2
  • Licensee: means an individual licensed by the director as a real estate broker or real estate salesperson pursuant to chapter 20. See Rhode Island General Laws 5-20.6-2
  • Mandatory relationship disclosure: means a form that describes the relationship between a consumer and a principal broker and his or her affiliated licensees that meets the requirements of §?5-20. See Rhode Island General Laws 5-20.6-2
  • Ministerial acts: means acts of an administrative nature that licensees perform for client or customers, including, but not limited to, showing property; preparing offers or agreements to sell, purchase, exchange, rent, or lease; conveying offers or agreements to the parties; and providing information and assistance. See Rhode Island General Laws 5-20.6-2
  • person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6
  • Principal broker: means a real estate broker licensed by the director who is designated by the brokerage to be responsible for the supervision and activities of his or her affiliated licensees in accordance with this chapter and chapter 20. See Rhode Island General Laws 5-20.6-2
  • Real estate: refers to vacant land on which a building is intended to be constructed for use as one or two (2) residential dwellings or land with physical improvements consisting of a house and/or structure comprised of four (4) or fewer residential units. See Rhode Island General Laws 5-20.6-2
  • Seller: means a person who sells or attempts to sell an ownership interest in real estate to another person. See Rhode Island General Laws 5-20.6-2
  • Tenant: means a person who acquired or seeks to acquire an interest in real estate that entitles him or her to occupy or use a property that is owned by another person. See Rhode Island General Laws 5-20.6-2
  • Transaction coordinator: means a principal broker or his or her designee who supervises a real estate transaction in a capacity in which one affiliated licensee represents a buyer or tenant as a designated client representative and another affiliated licensee represents a seller or landlord as a designated client representative in the same transaction. See Rhode Island General Laws 5-20.6-2

(b)  A principal broker or his or her designee may appoint one or more affiliated licensees to act as the designated client representative(s) of a seller or landlord and one or more affiliated licensees to act as the designated client representative(s) of a buyer or tenant in the same transaction; provided; that, all parties to the transaction receive written notice that an inherent conflict of interest may exist when designated client representatives are affiliated with the same principal broker.

(c)  A designated client representative of a seller client or landlord client shall have no duty to protect the confidential information of a buyer customer or tenant customer involved in a transaction with his or her client. Conversely, a designated client representative of a buyer client or tenant client shall have no duty to protect the confidential information of a seller customer or landlord customer involved in a transaction with his or her client.

(d)  In the event that one or more affiliated licensees represent a seller as a designated client representative and one or more affiliated licensees represent the buyer as a designated client representative in the same transaction, the principal broker or his or her designee shall act in a capacity as the transaction coordinator and shall protect the confidential information of all parties to the transaction and properly account for funds.

(e)  No affiliated licensees of the principal broker, other than those licensee(s) specifically designated to represent the client as a designated client representative, shall represent the client or owe any other duties except that affiliated licensees not appointed to represent a client in a transaction shall have the duty to protect the client’s confidential information.

(f)  All other affiliated licensees of the principal broker not appointed as a designated client representative for a party in a real estate transaction may represent another party with conflicting interests in the same transaction.

(g)  A designated client representative is exclusively responsible for the performance of any duties owed to the client.

(h)  An appointment of a designated client representative by a principal broker or his or her designee to represent a client shall not limit the principal broker’s liability or responsibility for any breach of duty owed to a client by the designated client representative.

History of Section.
P.L. 1989, ch. 141, § 2; P.L. 2007, ch. 344, § 1; P.L. 2007, ch. 403, § 1; P.L. 2013, ch. 27, § 2; P.L. 2013, ch. 38, § 2; P.L. 2014, ch. 528, § 2.