2019 -- H 6214

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LC002796

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- REAL ESTATE SALES

DISCLOSURES

     

     Introduced By: Representatives Noret, Solomon, Jackson, Serodio, and Amore

     Date Introduced: June 13, 2019

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 5-20.8-2 of the General Laws in Chapter 5-20.8 entitled "Real

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Estate Sales Disclosures" is hereby amended to read as follows:

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     5-20.8-2. Disclosure requirements.

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     (a) As soon as practicable, but in any event no later than prior to signing any agreement

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to transfer real estate, the seller of the real estate shall deliver a written disclosure to the buyer

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and to each agent with whom the seller knows he or she or the buyer has dealt in connection with

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the real estate. The written disclosure shall comply with the requirements set forth in subsection

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(b) of this section and shall state all deficient conditions of which the seller has actual knowledge.

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The agent shall not communicate the offer of the buyer until the buyer has received a copy of the

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written disclosure and signed a written receipt of the disclosure. If the buyer refuses to sign a

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receipt pursuant to this section, the seller or agent shall immediately sign and date a written

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account of the refusal. The agent is not liable for the accuracy or thoroughness of representations

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made by the seller in the written disclosure or for deficient conditions not disclosed to the agent

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by the seller.

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     (b)(1) The Rhode Island real estate commission may approve a form of written disclosure

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as required under this chapter or the seller may use a disclosure form substantially conforming to

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the requirements of this section. The following provisions shall appear conspicuously at the top of

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any written disclosure form: "Prior to the signing of an agreement to transfer real estate (vacant

 

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land or real property and improvements consisting of a house or building containing one to four

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(4) dwelling units), the seller is providing the buyer with this written disclosure of all deficient

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conditions of which the seller has knowledge. This is not a warranty by the seller that no other

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defective conditions exist, which there may or may not be. The buyer should estimate the cost of

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repair or replacement of deficient conditions prior to submitting an offer on this real estate. The

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buyer is advised not to rely solely upon the representation of the seller made in this disclosure,

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but to conduct any inspections or investigations which the buyer deems to be necessary to protect

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his or her best interest." Nothing contained in this section shall be construed to impose an

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affirmative duty on the seller to conduct inspections as to the condition of this real estate.

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     (2) The disclosure form shall include the following information:

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     (i) Seller Occupancy -- (Length of Occupancy)

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     (ii) Year Built

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     (iii) Basement -- (Seepage, Leaks, Cracks, etc. Defects)

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     (iv) Sump Pump -- (Operational, Location, and Defects)

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     (v) Roof (Layers, Age and Defects)

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     (vi) Fireplaces -- (Number, Working and Maintenance, Defects)

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     (vii) Chimney -- (Maintenance History, Defects)

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     (viii) Woodburning Stove -- (Installation Date, Permit Received, Defects)

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     (ix) Structural Conditions -- (Defects)

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     (x) Insulation -- (Wall, Ceiling, Floor, UFFI)

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     (xi) Termites or other Pests -- (Treatment Company)

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     (xii) Radon -- (Test, Company) "Radon has been determined to exist in the State of

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Rhode Island. Testing for the presence of radon in residential real estate prior to purchase is

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advisable."

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     (xiii) Electrical Service -- (Imp. & Repairs, Electrical Service, Amps, Defects,

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Modifications)

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     (xiv) Heating System -- (Type, Imp. & Repairs, Underground Tanks, Zones,

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Supplemental Heating, Defects, Modifications)

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     (xv) Air Conditioning -- (Imp. & Repairs, Type, Defects)

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     (xvi) Plumbing -- (Imp. & Repairs, Defects, Modifications)

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     (xvii) Sewage System -- (Assessment, Annual Fees, Type, Cesspool/Septic Location,

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Last Pumped, Maintenance History, Defects)

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     "Potential purchasers of real estate in the state of Rhode Island are hereby notified that

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many properties in the state are still serviced by cesspools as defined in Rhode Island general law

 

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chapter 23-19.15 (The Rhode Island Cesspool Phase-Out Act of 2007). Cesspools are a

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substandard and inadequate means of sewage treatment and disposal, and cesspools often

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contribute to groundwater and surface water contamination. Requirements for abandonment and

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replacement of high-risk cesspools as established in Rhode Island general law Chapter 23-19.15

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are primarily based upon a cesspool's non-treatment of wastewater and the inherent risks to public

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health and the environment due to a cesspool's distance from a tidal water area, or a public

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drinking water resource. Purchasers should consult Rhode Island general law chapter 23-19.15 for

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specific cesspool abandonment or replacement requirements. An inspection of property served by

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an on-site sewage system by a qualified professional is recommended prior to purchase. Pursuant

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to Rhode Island general law § 5-20.8-13, potential purchasers shall be permitted a ten (10) day

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period to conduct an inspection of a property's sewage system to determine if a cesspool exists,

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and if so, whether it will be subject to the phase-out requirements as established in Rhode Island

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general law chapter 23-19.15.

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     (xviii) Water System -- (Imp. & Repairs, Type, Defects) Private water supply (well).

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"The buyer understands that this property is, or will be served, by a private water supply (well)

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which may be susceptible to contamination and potentially harmful to health. If a public water

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supply is not available, the private water supply must be tested in accordance with regulations

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established by the Rhode Island department of health pursuant to § 23-1-5.3. The seller of that

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property is required to provide the buyer with a copy of any previous private water supply (well)

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testing results in the seller's possession and notify the buyer of any known problems with the

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private water supply (well)."

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     (xix) Domestic Hot Water -- (Imp. & Repairs, Type, Defects, Capacity of Tank)

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     (xx) Property Tax

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     (xxi) Easements and Encroachments -- The seller of that real estate is required to provide

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the buyer with a copy of any previous surveys of the real estate that are in the seller's possession

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and notify the buyer of any known easements, encroachments, covenants or restrictions of the

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seller's real estate. If the seller knows that the real estate has a conservation easement or other

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conservation or preservation restriction as defined in § 34-39-1 of the general laws, the seller is

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required to disclose said information and provide the buyer with a copy of any documentation in

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the seller's possession regarding the conservation and preservation restrictions. A buyer may

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wish to have a boundary or other survey independently performed at his or her own expense.

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     (xxii) Deed -- (Type, Number of Parcels)

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     (xxiii) Zoning -- (Permitted use, Classification) "Buyers of real estate in the state of

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Rhode Island are legally obligated to comply with all local real estate ordinances; including, but

 

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not limited to, ordinances on the number of unrelated persons who may legally reside in a

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dwelling, as well as ordinances on the number of dwelling units permitted under the local zoning

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ordinances." If the subject property is located in a historic district, that fact must be disclosed to

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the buyer, together with the notification that "property located in a historic district may be subject

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to construction, expansion or renovation limitations. Contact the local building inspection official

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for details."

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     (xxiv) Restrictions -- (Plat or Other)

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     (xxv) Building Permits

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     (xxvi) Minimum Housing -- (Violations)

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     (xxvii) Flood Plain -- (Flood Insurance)

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     (xxviii) Wetlands -- The location of coastal wetlands, bay, fresh water wetlands, pond,

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marsh, river bank or swamp, as those terms are defined in chapter 1 of title 2 and the associated

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buffer areas may impact future property development. The seller must disclose to the buyer any

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such determination on all or part of the land made by the department of environmental

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management.

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     (xxix) Multi-family or other Rental Property -- (Rental Income)

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     (xxx) Pools & Equipment -- (Type, Defects)

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     (xxxi) Lead Paint -- (Inspection) Every buyer of residential real estate built prior to 1978

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is hereby notified that those properties may have lead exposures that may place young children at

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risk of developing lead poisoning. Lead poisoning in young children may produce permanent

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neurological damage, including learning disabilities, reduced IQ behavioral problems, and

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impaired memory. The seller of that property is required to provide the buyer with a copy of any

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lead inspection report in the seller's possession and notify the buyer of any known lead poisoning

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problem. Environmental lead inspection is recommended prior to purchase.

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     (xxxii) Fire

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     (xxxiii) Hazardous Waste -- (Asbestos and Other Contaminants)

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     (xxxiv) Miscellaneous

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     (xxxv) Farms -- The disclosure shall inform the buyer that any farm(s) that may be in the

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municipality are protected by the right to farm law.

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     (xxxvi) Mold -- (Type, repairs, alterations, modifications).

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     (xxxvii) Ventilation system modifications.

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     (xxxviii) Moisture penetration and damage.

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     (c) Any agreement to transfer real estate shall contain an acknowledgement that a

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completed real estate disclosure form has been provided to the buyer by the seller in accordance

 

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with the provisions of this section.

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     (d) The Rhode Island real estate commission has the right to amend the seller disclosure

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requirements by adding or deleting requirements when there is a determination that health, safety,

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or legal needs require a change. Any change to requirements shall be a rule change, subject to the

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Administrative Procedures Act, chapter 35 of title 42. The power of the commission to amend the

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written disclosure requirements shall be liberally construed so as to allow additional information

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to be provided as to the structural components, housing systems, and other property information

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as required by this chapter.

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     SECTION 2. This act shall take effect on January 1, 2020.

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LC002796

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- REAL ESTATE SALES

DISCLOSURES

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     This act would add to the disclosure requirements to be made by the sellers of one to four

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(4) units of residential real estate, any modifications made to the electrical, heating, plumbing,

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and ventilation systems. It would also require disclosures concerning the type, repairs, alterations,

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modifications of any mold, plus any moisture penetration or damage.

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     This act would take effect on January 1, 2020.

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