2025 -- S 0489

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LC001380

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2025

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A N   A C T

RELATING TO PROPERTY -- CAPACITY TO HOLD REAL ESTATE

     Introduced By: Senators Kallman, Britto, Mack, Bell, and Gu

     Date Introduced: February 26, 2025

     Referred To: Senate Housing & Municipal Government

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 34-2 of the General Laws entitled "Capacity to Hold Real Estate" is

hereby amended by adding thereto the following section:

     34-2-2. Ownership of single-family dwelling, and certain multi-family dwellings by

entities that are not individuals.

     (a) As used in this section, the following terms shall have the following meanings:

     (1) “Multi-family dwelling” means a residential property containing two (2) to four (4)

dwelling units.

     (2) “Single-family dwelling” means a residential property containing no more than a single

dwelling unit.

     (b) If a legal entity that is not an individual possesses, controls, or otherwise claims legal

title to assets in real property whose aggregate value exceeds twenty-five million dollars

($25,000,000), then such an entity shall be prohibited from owning single-family dwellings, or

multi-family dwellings. For the purposes of this section, legal entities owned by the same

individual, or group of individuals shall be considered a single entity for the purposes of calculating

the aggregate value of real property.

     (c) Legal entities that possess, control, or otherwise claim legal title to assets in real

property whose aggregate value exceeds twenty-five million dollars ($25,000,000) prior to the

effective date of this section, shall divest from assets consisting of single-family dwellings, and/or

multi-family dwellings over a period of ten (10) years, until the total aggregate value held by such

an entity is less than or equal to twenty-five million dollars ($25,000,000).

     (d) Applicable entities affected by this section shall divest from single-family dwellings,

and/or multi-family dwellings according to the following schedule:

     (1) In the first full taxable year beginning after the effective date of this section, entities

that possess, control, or otherwise claim legal title to single-family dwellings, or multi-family

dwellings shall divest from their holdings in these dwellings by ten percent (10%) of the aggregate

total over twenty-five million dollars ($25,000,000) as of the effective date of this section.

     (2) In the second full taxable year beginning after the effective date of this section, entities

that possess, control, or otherwise claim legal title to single-family dwellings, or multi-family

dwellings shall divest from their holdings in these dwellings by twenty percent (20%) of the

aggregate total over twenty-five million dollars ($25,000,000) as of the effective date of this

section.

     (3) In the third full taxable year beginning after the effective date of this section, entities

that possess, control, or otherwise claim legal title to single-family dwellings, or multi-family

dwellings shall divest from their holdings in these dwellings by thirty percent (30%) of the

aggregate total over twenty-five million dollars ($25,000,000) as of the effective date of this

section.

     (4) In the fourth full taxable year beginning after the effective date of this section, entities

that possess, control, or otherwise claim legal title to single-family dwellings, or multi-family

dwellings shall divest from their holdings in these dwellings by forty percent (40%) of the aggregate

total over twenty-five million dollars ($25,000,000) as of the effective date of this section.

     (5) In the fifth full taxable year beginning after the effective date of this section, entities

that possess, control, or otherwise claim legal title to single-family dwellings, or multi-family

dwellings shall divest from their holdings in these dwellings by fifty percent (50%) of the aggregate

total over twenty-five million dollars ($25,000,000) as of the effective date of this section.

     (6) In the sixth full taxable year beginning after the effective date of this section, entities

that possess, control, or otherwise claim legal title to single-family dwellings, or multi-family

dwellings shall divest from their holdings in these dwellings by sixty percent (60%) of the aggregate

total over twenty-five million dollars ($25,000,000) as of the effective date of this section.

     (7) In the seventh full taxable year beginning after the effective date of this section, entities

that possess, control, or otherwise claim legal title to single-family dwellings, or multi-family

dwellings shall divest from their holdings in these dwellings by seventy percent (70%) of the

aggregate total over twenty-five million dollars ($25,000,000) as of the effective date of this

section.

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     (8) In the eighth full taxable year beginning after the effective date of this section, entities

that possess, control, or otherwise claim legal title to single-family dwellings, or multi-family

dwellings shall divest from their holdings in these dwellings by eighty percent (80%) of the

aggregate total over twenty-five million dollars ($25,000,000) as of the effective date of this

section.

     (9) In the ninth full taxable year beginning after the effective date of this section, entities

that possess, control, or otherwise claim legal title to single-family dwellings, or multi-family

dwellings shall divest from their holdings in these dwellings by ninety percent (90%) of the

aggregate total over twenty-five million dollars ($25,000,000) as of the effective date of this

section.

     (10) In the tenth full taxable year beginning after the effective date of this section, entities

that possess, control, or otherwise claim legal title to single-family dwellings, or multi-family

dwellings shall divest from their holdings in these dwellings by one hundred percent (100%) of the

aggregate total over twenty-five million dollars ($25,000,000) as of the effective date of this

section.

     (e) The value of single-family homes and multi-family homes for the purposes of

calculating an entity’s aggregate total value shall be equal to the assessed value of the property used

for the purposes of determining municipal real estate tax, as published by the entity pursuant to §

34-18-58(a)(7).

     (f) Beginning January 1, 2027 and each year thereafter, the maximum allowable aggregate

total of real property as established in subsection (b) of this section, shall be adjusted for inflation

using the most recent Consumer Price Index (CPI) report as published by the United States Bureau

of Labor and Statistics.

     (g) Should the aggregate total value of real property held by an entity exceed twenty-five

million dollars ($25,000,000) due to increased valuation of said property, then the entity shall have

one year from the date of reevaluation to divest such real property that causes the aggregate total

valuation to exceed twenty-five million dollars ($25,000,000).

     (g) Entities found in violation of this section after a hearing pursuant to chapter 35 of title

42 (“administrative procedures”) shall be subjected to fines up to, but not exceeding, ten thousand

dollars ($10,000) for each violation. The secretary of the department of housing shall be responsible

for enforcing the provisions of this section by promulgating rules and regulations necessary to

implement the provisions of this section.

     SECTION 2. Section 34-18-58 of the General Laws in Chapter 34-18 entitled "Residential

Landlord and Tenant Act" is hereby amended to read as follows:

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     34-18-58. Statewide mandatory rental registry.

     (a) All landlords shall register the following information with the department of health:

     (1) Names of individual landlords or any business entity responsible for leasing to a tenant

under this chapter;

     (2) An active business address, PO box, or home address;

     (3) An active email address;

     (4) An active telephone number that would reasonably facilitate communications with the

tenant of each dwelling unit;

     (5) Any property manager, management company, or agent for service of the property,

along with the business address, PO box, or home address of the property manager, management

company, or agent and including:

     (i) An active email address; and

     (ii) An active telephone number, for each such person or legal entity, if applicable, for each

dwelling unit; and

     (6) Information necessary to identify each dwelling unit; and

     (7) The assessed value of each property as used for the purposes of calculating municipal

property taxes as well as the aggregate value of all properties owned by the individual landlords or

any business entity.

     (b) All landlords who lease a residential property constructed prior to 1978 and that is not

exempt from the requirements of chapter 128.1 of title 42 (“lead hazard mitigation”) shall, in

addition to the requirements of subsection (a) of this section, for each dwelling unit, provide the

department of health with a valid certificate of conformance in accordance with chapter 128.1 of

title 42 (“lead hazard mitigation”) and regulations derived therefrom, or evidence sufficient to

demonstrate that they are exempt from the requirement to obtain a certificate of conformance.

     (c) Contingent upon available funding, the department of health, or designee, shall create

a publicly accessible online database containing the information obtained in accordance with

subsections (a) and (b) of this section, no later than nine (9) months following the effective date of

this section [June 20, 2023].

     (d) All landlords subject to the requirements of subsections (a) and (b) of this section as of

September 1, 2024, shall register the information required by those subsections no later than

October 1, 2024.

     A landlord who acquires a rental property, or begins leasing a rental property to a new

tenant, after September 1, 2024, shall register the information required by subsections (a) and (b)

of this section within thirty (30) days after the acquisition or lease to a tenant, whichever date is

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earlier. All landlords subject to the requirements of subsections (a) and (b) of this section shall,

following initial registration, re-register by October 1 of each year in order to update any

information required to comply with subsections (a) and (b) of this section, or to confirm that the

information already supplied remains accurate.

     (e) Any person or entity subject to subsections (a) and (b) of this section who fails to

comply with the registration provision in subsection (d) of this section, shall be subject to a civil

fine of at least fifty dollars ($50.00) per month for failure to register the information required by

subsection (a) of this section, or at least one hundred and twenty-five dollars ($125) per month, for

failure to register the information required by subsection (b) of this section.

     (f) All civil penalties imposed pursuant to subsection (e) of this section shall be payable to

the department of health. There is to be established a restricted receipt account to be known as the

“rental registry account” which shall be a separate account within the department of health.

Penalties received by the department pursuant to the terms of this section shall be deposited into

the account. Monies deposited into the account shall be transferred to the department of health and

shall be expended for the purpose of administering the provisions of this section or lead hazard

mitigation, abatement, enforcement, or poisoning prevention. No penalties shall be levied under

this section prior to October 1, 2024.

     (g) Notwithstanding the provisions of § 34-18-35, a landlord or any agent of a landlord

may not commence an action to evict for nonpayment of rent in any court of competent jurisdiction,

unless, at the time the action is commenced, the landlord is in compliance with the requirements of

subsections (a), (b), and (d) of this section. A landlord must present the court with evidence of

compliance with subsections (a), (b), and (d) of this section at the time of filing an action to evict

for nonpayment of rent in order to proceed with the civil action.

     (h) The department of health may commence an action for injunctive relief and additional

civil penalties of up to fifty dollars ($50.00) per violation against any landlord who repeatedly fails

to comply with subsection (a) of this section. The attorney general may commence an action for

injunctive relief and additional civil penalties of up to one thousand dollars ($1,000) per violation

against any landlord who repeatedly fails to comply with subsection (b) of this section. Any

penalties obtained pursuant to this subsection shall be used for the purposes of lead hazard

mitigation, abatement, enforcement, or poisoning prevention, or for the purpose of administering

the provisions of this section. No penalties shall be levied under this section prior to October 1,

2024.

     SECTION 3. This act shall take effect on January 1, 2026.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PROPERTY -- CAPACITY TO HOLD REAL ESTATE

***

     This act would preclude any legal entity from possessing, controlling or otherwise claiming

legal title to real property exceeding an aggregate value of twenty-five million dollars

($25,000,000) in single-family dwellings or multi-family dwellings. Any legal entity that

possesses, controls or otherwise claims legal title to real property exceeding an aggregate value of

twenty-five million dollars ($25,000,000) in single-family dwellings or multi-family dwellings,

would be forced to divest a graduated yearly amount from assets consisting of single-family

dwellings or multi-family dwellings over the next ten (10) years, until the total aggregate value

held by that legal entity is less than or equal to twenty-five million dollars ($25,000,000).

     This act would take effect on January 1, 2026.

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