TITLE 5
Businesses and Professions

CHAPTER 5-20.6
Relationships in Residential Real Estate Transactions

SECTION 5-20.6-8


§ 5-20.6-8 Mandatory relationship disclosure.

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

(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 give a prospective buyer, seller, tenant, or landlord the mandatory relationship disclosure timely, 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.)