(a)  The Rhode Island real estate commission shall approve a mandatory relationship disclosure that conforms to the requirements of this section.

Terms Used In Rhode Island General Laws 5-20.6-8

  • 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

  • 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
  • Lease: means an express written or oral contract between a landlord and tenant for the use or occupancy by the tenant of real estate that is owned by another person. See Rhode Island General Laws 5-20.6-2
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • 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
  • 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
  • Sales agreement: means an express written contract signed by the buyer and seller for the purchase and sale of the real estate. 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
  • Transaction facilitator: means a licensee who provides assistance to a buyer, seller, tenant, or landlord, or both, in a real estate transaction. See Rhode Island General Laws 5-20.6-2

(b)  A licensee shall provide a prospective buyer, seller, tenant, or landlord in a real estate transaction with a copy of the mandatory relationship disclosure and shall obtain a signed acknowledgement of receipt from the buyer, seller, tenant, or landlord prior to the disclosure of any confidential information. If a buyer, seller, tenant, or landlord refuses to sign an acknowledgement of receipt, the licensee shall set forth, sign, and date a written declaration of the facts of the refusal.

(c)  The mandatory relationship disclosure shall contain the following information:

(1)  A list of the types of representation or assistance available to a prospective buyer, seller, tenant, or landlord consistent with § 5-20.6-3;

(2)  A statement that a principal broker and his or her affiliated licensees must disclose their relationship as a designated client representative, transaction facilitator, or transaction coordinator to the buyer, seller, tenant, or landlord in any transaction;

(3)  The legal duties and obligations owed to the buyer, seller, tenant, or landlord in each type of relationship as set forth in this chapter and chapter 20.5 of this title;

(4)  A conspicuous notice that a licensee cannot act as a client representative for a prospective buyer, seller, tenant, or landlord unless the licensee obtains the informed, written consent of a prospective buyer, seller, tenant, or landlord with a signed, mandatory relationship disclosure;

(5)  A box for the client or customer to select the type of representation or assistance that he or she desires;

(6)  A box for the client or customer to acknowledge the type of representation or assistance that a real estate licensee is offering to the other party in the same transaction.

(7)  A statement that a principal broker may designate 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 the licensee obtains the consent from the client being represented;

(8)  A statement that, when the principal broker or his or her designee appoints designated client representatives to represent clients on different sides of a transaction, he or she shall: (i) Act in a neutral capacity as a transaction coordinator; (ii) Protect all parties’ confidential information; and (iii) Properly account for funds;

(9)  A statement that all affiliated licensees not appointed as a designated client representative for the client may represent another party in a transaction with conflicting interests;

(10)  An explanation of the potential conflicts of interest that exist if a licensee acts for more than one party in the same transaction;

(11)  A statement that a principal broker and his or her affiliated licensees must disclose their relationship as a designated client representative, transaction facilitator, or transaction coordinator to the buyer, seller, tenant, or landlord in any transaction;

(12)  A statement that the failure of a licensee to timely give a prospective buyer, seller, tenant, or landlord the mandatory relationship disclosure, or the failure of a licensee to obtain any other written consent required by this chapter, shall be a violation of Rhode Island real estate license law and may subject the licensee to disciplinary action;

(13)  A statement that if a consumer desires to change the nature of a relationship with a licensee from a customer relationship to a client relationship that a licensee’s relationship with a buyer, seller, tenant, or landlord as a designated client representative must be established no later than the preparation of a sales agreement, offer to purchase, or lease; and

(14)  Written confirmation from each party signing the mandatory relationship disclosure that he or she has received, read, and understood this mandatory relationship disclosure and has consented to the relationship confirmed above.

(d)  In all instances, a licensee’s relationship with a buyer, seller, tenant, or landlord as a designated client representative must be established, and the mandatory relationship disclosure executed, no later than the preparation of a sales agreement, offer to purchase, or lease.

History of Section.
P.L. 1993, ch. 397, § 3; 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.