Key Takeaways
- Rhode Island requires a Mandatory Relationship Disclosure form approved by the Real Estate Commission
- The disclosure must be provided to prospective buyers, sellers, tenants, or landlords
- A signed acknowledgment of receipt must be obtained before disclosing any confidential information
- The relationship disclosure must be executed no later than preparation of a sales agreement, offer to purchase, or lease
- The disclosure explains the different types of agency relationships available in Rhode Island
Mandatory Relationship Disclosure
Rhode Island has specific requirements for agency disclosure that licensees must follow in all real estate transactions.
Purpose of the Disclosure
The Rhode Island Real Estate Commission approves a Mandatory Relationship Disclosure form that describes the types of brokerage relationships available to consumers in Rhode Island transactions.
Key Point: The Mandatory Relationship Disclosure is required for virtually all residential real estate transactions in Rhode Island.
When to Provide the Disclosure
The disclosure must be provided:
- Before disclosing any confidential information to any person
- No later than the preparation of a sales agreement, offer to purchase, or lease
Timing Guidelines
| Situation | When to Provide |
|---|---|
| Listing presentation | At first substantive contact |
| Buyer inquiry | Before discussing needs, finances, or motivation |
| Open house | Before substantive conversation |
| Rental transaction | Before confidential discussion with tenant or landlord |
Who Must Receive the Disclosure
The Mandatory Relationship Disclosure must be provided to:
- Prospective buyers
- Prospective sellers
- Prospective tenants
- Prospective landlords
Acknowledgment Requirement
| Requirement | Details |
|---|---|
| Signed acknowledgment required | Yes |
| When to obtain | Before disclosing confidential information |
| Purpose | Documents that consumer received and understood disclosure |
Important: A licensee must obtain a signed acknowledgment of receipt before proceeding with confidential discussions.
Types of Relationships Disclosed
The Mandatory Relationship Disclosure explains the following relationships:
Designated Client Representative
A licensee who represents only one party (buyer, seller, tenant, or landlord) as their designated client representative.
Dual Agency
When a licensee or brokerage represents both parties in the same transaction, with written consent from both parties.
Non-Agency Relationships
When a licensee assists a party without creating an agency relationship.
Establishing the Relationship
| Step | Timing |
|---|---|
| Provide disclosure | Before confidential information shared |
| Obtain signed acknowledgment | Before confidential information shared |
| Establish relationship | No later than preparation of agreement |
Confidential Information Protection
Once a relationship is established, the licensee must protect confidential information gained in that relationship, including:
- Motivation to buy, sell, or lease
- Financial information and ability to pay
- Terms the client will accept
- Any other information the client requests be kept confidential
Exam Tip: The key timing requirement is that the disclosure must be provided and acknowledged BEFORE any confidential information is disclosed.
Documentation Requirements
| Document | Purpose |
|---|---|
| Mandatory Relationship Disclosure | Explains available relationships |
| Signed Acknowledgment | Proves disclosure was made and received |
| Agency Agreement | Establishes specific relationship with client |
When must a Rhode Island licensee provide the Mandatory Relationship Disclosure?
What must a Rhode Island licensee obtain from a consumer before proceeding with confidential discussions?