2024 -- S 2185 SUBSTITUTE A

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LC004283/SUB A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

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A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- REAL ESTATE SALES

DISCLOSURES

     Introduced By: Senators Gu, Euer, McKenney, Sosnowski, DiMario, LaMountain, Gallo,
Burke, and Bissaillon

     Date Introduced: January 24, 2024

     Referred To: Senate Judiciary

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 5-20.8-1 and 5-20.8-2 of the General Laws in Chapter 5-20.8 entitled

"Real Estate Sales Disclosures" are hereby amended to read as follows:

     5-20.8-1. Definitions.

     When used in this chapter, unless the context indicates otherwise:

     (1) “Agent” means any individual or entity acting on behalf of a seller or buyer to effect

the transfer of real estate. It includes listing agent, selling agent, buyer’s agent, and their respective

brokers.

     (2) “Agreement to transfer” means a purchase and sale agreement, installment-sales

contract, option to purchase agreement, or other agreement intended to effect the transfer of real

estate from a seller to a buyer.

     (3) “Buyer” means any individual or entity seeking to obtain title to real estate from a seller

for consideration.

     (4) “Closing” means the time at which real estate is transferred from seller to buyer and

consideration is delivered to the seller or to a settlement agent with the intention of imminent

delivery upon the recording of pertinent documents and other ministerial acts associated with

settlement.

     (5) “Deficient conditions” means any land restrictions, defect, malfunction, breakage, or

unsound condition existing on, in, across, or under the real estate of which the seller has knowledge.

     (6) “Lead exposure hazard” means a condition that presents a clear and significant health

risk to occupants of the dwelling, dwelling unit, or premises, particularly where there are children

under the age of six (6) years.

     (7) “Real estate” means vacant land or real property and improvements consisting of a

house or building containing one to four (4) dwelling units.

     (8) “Seller” means any individual or entity seeking to transfer title to real estate to a buyer

for consideration.

     (9) "Shoreline property" means any real estate that abuts the shore as governed by § 46-23-

26.

     (9)(10) “Transfer” means the sale or conveyance, exchange of, or option to purchase any

real estate.

     5-20.8-2. Disclosure requirements.

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

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

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

estate. The written disclosure shall comply with the requirements set forth in subsection (b) and

shall state all deficient conditions of which the seller has actual knowledge. The agent shall not

communicate the offer of the buyer until the buyer has received a copy of the written disclosure

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

section, the seller or agent shall immediately sign and date a written account of the refusal. The

agent is not liable for the accuracy or thoroughness of representations made by the seller in the

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

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

for vacant land and a form of written disclosure for the sale of real property and improvements

consisting of a house or building containing one to four (4) dwelling units as required under this

chapter or the seller may use a disclosure form substantially conforming to the requirements of this

section. The following provisions shall appear conspicuously at the top of any written disclosure

form: “Prior to the signing of an agreement to transfer real estate (vacant land or real property and

improvements consisting of a house or building containing one to four (4) dwelling units), the seller

is providing the buyer with this written disclosure of all deficient conditions of which the seller has

knowledge. This is not a warranty by the seller that no other defective conditions exist, which there

may or may not be. The buyer should estimate the cost of repair or replacement of deficient

conditions prior to submitting an offer on this real estate. The buyer is advised not to rely solely

upon the representation of the seller made in this disclosure, but to conduct any inspections or

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investigations the buyer deems to be necessary to protect his or her best interest.” Nothing

contained in this section shall be construed to impose an affirmative duty on the seller to conduct

inspections as to the condition of this real estate.

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

     (i) Sewage System — (Assessment, Annual Fees, Type, Cesspool/Septic Location, Last

Pumped, Maintenance History, Defects)

     “Potential purchasers of real estate in the State of Rhode Island are hereby notified that

many properties in the state are still serviced by cesspools as defined in chapter 19.15 of title 23

(the “Rhode Island Cesspool Act of 2007”). Cesspools are a substandard and inadequate means of

sewage treatment and disposal, and cesspools often contribute to groundwater and surface water

contamination. Requirements for abandonment and replacement of high-risk cesspools as

established in chapter 19.15 of title 23 are primarily based upon a cesspool’s nontreatment of

wastewater and the inherent risks to public health and the environment due to a cesspool’s distance

from a tidal water area, or a public drinking water resource. Purchasers should consult chapter

19.15 of title 23 for specific cesspool abandonment or replacement requirements. An inspection of

property served by an on-site sewage system by a qualified professional is recommended prior to

purchase. Pursuant to § 5-20.8-13, potential purchasers shall be permitted a ten-day (10) period to

conduct an inspection of a property’s sewage system to determine if a cesspool exists, and if so,

whether it will be subject to the phase-out requirements as established in chapter 19.15 of title 23.”

     (ii) Water System — (Imp. & Repairs, Type, Defects) Private water supply (well). “The

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

be susceptible to contamination and potentially harmful to health. If a public water supply is not

available, the private water supply must be tested in accordance with regulations established by the

Rhode Island department of health pursuant to § 23-1-5.3. The seller of that property is required to

provide the buyer with a copy of any previous private water supply (well) testing results in the

seller’s possession and notify the buyer of any known problems with the private water supply

(well).”

     (iii) Property Tax

     (iv) Easements and Encroachments — The seller of the real estate is required to provide

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

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

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

conservation or preservation restriction as defined in § 34-39-2, the seller is required to disclose

that information and provide the buyer with a copy of any documentation in the seller’s possession

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regarding the conservation and preservation restrictions. A buyer may wish to have a boundary or

other survey independently performed at the buyer’s own expense.

     (v) Deed — (Type, Number of Parcels)

     (vi) Zoning — (Permitted use, Classification). “Buyers of real estate in the State of Rhode

Island are legally obligated to comply with all local real estate ordinances; including, but not limited

to, ordinances on the number of unrelated persons who may legally reside in a dwelling, as well as

ordinances on the number of dwelling units permitted under the local zoning ordinances.” If the

subject property is located in a historic district, that fact must be disclosed to the buyer, together

with the notification that “property located in a historic district may be subject to construction,

expansion, or renovation limitations. Contact the local building inspection official for details.”

     (vii) Restrictions — (Plat or Other)

     (viii) Building Permits

     (ix) Flood Plain — (Flood Insurance)

     (x) Wetlands — The location of coastal wetlands, bay, freshwater wetlands, pond, marsh,

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

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

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

     (xi) Hazardous Waste — (Asbestos and Other Contaminants)

     (xii) Miscellaneous

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

municipality are protected by the right to farm law.

     (3) The disclosure form for the sale of real property and improvements consisting of a

house or building containing one to four (4) dwelling units shall include the following information:

     (i) Seller Occupancy — (Length of Occupancy)

     (ii) Year Built

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

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

     (v) Roof (Layers, Age, and Defects)

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

     (vii) Chimney — (Maintenance History, Defects)

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

     (ix) Structural Conditions — (Defects)

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

     (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 Rhode

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

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

Modifications)

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

Heating, Defects, Modifications)

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

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

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

Pumped, Maintenance History, Defects)

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

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

chapter 19.15 of title 23 (the Rhode Island Cesspool Act of 2007). Cesspools are a substandard and

inadequate means of sewage treatment and disposal, and cesspools often contribute to groundwater

and surface water contamination. Requirements for abandonment and replacement of high-risk

cesspools as established in chapter 19.15 of title 23 are primarily based upon a cesspool’s

nontreatment of wastewater and the inherent risks to public health and the environment due to a

cesspool’s distance from a tidal water area, or a public drinking water resource. Purchasers should

consult chapter 19.15 of title 23 for specific cesspool abandonment or replacement requirements.

An inspection of property served by an on-site sewage system by a qualified professional is

recommended prior to purchase. Pursuant to § 5-20.8-13, potential purchasers shall be permitted a

ten-day (10) period to conduct an inspection of a property’s sewage system to determine if a

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

chapter 19.15 of title 23.”

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

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

be susceptible to contamination and potentially harmful to health. If a public water supply is not

available, the private water supply must be tested in accordance with regulations established by the

Rhode Island department of health pursuant to § 23-1-5.3. The seller of that property is required to

provide the buyer with a copy of any previous private water supply (well) testing results in the

seller’s possession and notify the buyer of any known problems with the private water supply

(well).”

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

     (xx) Property Tax

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     (xxi) Easements and Encroachments — The seller of the real estate is required to provide

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

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

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

conservation or preservation restriction as defined in § 34-39-1, the seller is required to disclose

that information and provide the buyer with a copy of any documentation in the seller’s possession

regarding the conservation and preservation restrictions. A buyer may wish to have a boundary or

other survey independently performed at his or her own expense.

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

     (xxiii) Zoning — (Permitted use, Classification). “Buyers of real estate in the state of

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

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

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

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

together with the notification that “property located in a historic district may be subject to

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

details.”

     (xxiv) Restrictions — (Plat or Other)

     (xxv) Building Permits

     (xxvi) Minimum Housing — (Violations)

     (xxvii) Flood Plain — (Flood Insurance)

     (xxviii) Wetlands — The location of coastal wetlands, bay, freshwater wetlands, pond,

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

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

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

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

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

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

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

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

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

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

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

problem. Environmental lead inspection is recommended prior to purchase.

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     (xxxii) Fire

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

     (xxxiv) Miscellaneous

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

municipality are protected by the right to farm law.

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

     (xxxvii) Ventilation system modifications.

     (xxxviii) Moisture penetration and damage.

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

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

with the provisions of this section.

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

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

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

administrative procedures act, chapter 35 of title 42. The power of the commission to amend the

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

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

required by this chapter.

     (e) The disclosure form for the sale of vacant land or real property and improvements in §

5-20.8-2(b)(2) and § 5-20.8-2(b)(3) shall also include the following information:

     "Shoreline Access - Members of the public shall have the right to access shoreline property

as defined in § 5-20.8-1. The public's rights and privileges of the shore may be exercised, where

shore exists, on wet sand or dry sand or rocky beach, up to ten feet (10') landward of the

"recognizable high tide line" subject to the restrictions governed by § 46-23-26 and any general

laws to the contrary.

     The seller of the real estate is required to notify the buyer of any public rights of way on

the real estate that are known to the seller. The seller shall provide the buyer with a copy of any

documentation evidencing such rights of way or conditions of public access that is in the seller's

possession.

     The buyer is advised to contact the Coastal Management Resources Council, the

municipality or applicable nonprofit organizations to determine whether any public rights of way

exist.

     The seller shall provide the buyer with a copy of any permits relating to the real estate that

were issued by the Coastal Management Resources Council and that are in the seller's possession."

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- REAL ESTATE SALES

DISCLOSURES

***

     This act would require information on the public's rights and privileges of the shore to be

included in disclosure forms for the sale of vacant land or real property.

     This act would take effect upon passage.

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