Selling a House in Rhode Island

Selling a house is one of the most significant legal transactions you'll ever participate in. It's important to know your legal rights and understand the process.

Working With a Real Estate Agent

In Rhode Island, real estate agents in Rhode Island are presumed to be neutral facilitators in a real estate transaction, which means that they can assist both the seller and the buyer in a sale, and that they are required to be neutral where there are conflicting interests between the parties. Real estate agents can also act as "a designated client representative" for a seller or a buyer, as long as requirements are met that the representation contract must be in writing and contain terms concerning compensation, services to be provided and limitations on services.

Mandatory disclosures and consent forms regarding the role of real estate agents are also required under state law, which ensures that both the seller and buyer are informed as to the roles and responsibilities of the real estate agents who they will be dealing with during the sales process. If you enter into a client representation contract, which might be called a listing agreement with a real estate agent, the agent has a "fiduciary duty" to you, which means that the agent owes certain duties to you under the law including:

• Performing the terms of the contract with reasonable skill and care
• Promoting your best interest in good faith and honesty
• Confidentiality
• Performing tasks related to the sale in a timely manner
• Accounting for money and property received during the sales process

If a real estate agent is assisting you in a sale as neutral transaction facilitator, he will not be able to fulfill all the fiduciary duties owed to a client under a client representation contract, but he does have the following duties:

• Performing tasks related to the sale in a timely and competent manner
• Acting with honesty, good faith and reasonable skill and care
• Accounting for money and property received in the course of the sale

To protect confidential information of both parties to a sale, in Rhode Island, you must complete a property disclosure form and give it to the buyer before the offer to purchase is made, an the buyer will sign a receipt for the disclosure. You should disclose the following potential house defects and information:

• Plumbing and sewage problems
• Water leakage of any type, including in basements
• Termites or other infestations
• Roof age, layers and defects
• Heating or air conditioning system and electrical system problems
• Property drainage problems
• Structural problems
• Problems with title to the property or zoning issues
• Substantial additions or alterations made without a building permit
• Hazardous materials
• Asbestos or radon
• Mold problems
• Lead paint (required under the federal Residential Lead-Based Paint Hazard Reduction Act of 1992 for homes built prior to 1978)
• Any other problems

Purchase Agreements

When you've got a serious buyer, you'll receive a written offer to purchase your home, sometimes called a "real estate sales and purchase agreement," or "purchase agreement," which states the finalized terms and conditions for the sale.

You won't have very long to decide whether or not to take the offer or propose a counteroffer so it's important to be informed ahead of time.

Common counter-proposal items include:

• A higher purchase price
• A higher deposit
• Giving buyer less time to remove contingencies
• Excluding certain items from the sale
• Providing you move in time to vacate the house after the sale is closed
• A clause making it a contingency that your attorney approve the contract
• A "liquidated damages clause" that details how much money the buyer will owe you if the buyer backs out of the deal for reasons other than the contingencies listed in the contract

Legal Title Issues

Your Rhode Island real estate lawyer or title company will investigate the legal title of the property you want to sell, and may find issues you'll need to understand.

In Rhode Island, for example, an implied easement may be present where a person grants lands to which there is no accessible right-of-way except over her or his land or retains land that is inaccessible except over the land which the person conveys. In such instances a right-of-way is presumed to have been granted or reserved. Such an implied grant or easement in lands or estates exists where there is no other reasonable and practicable way of accessing the property, and it is reasonably necessary for the beneficial use or enjoyment of the part granted or reserved.

Your property may also be subject to a "lien," which is a charge on the property to satisfy a debt or other obligation owed by the current owner of the property. A lien encumbers property as long as it exists and has been recorded in the public records.

In Rhode Island, liens on a piece of property may include:

• Mortgages
• Land sale contracts
• Involuntary liens (includes workmen's liens, liens for unpaid taxes and liens filed by creditors holding judgments against the owner)

Closing Costs

In Rhode Island, you can expect to pay for some or all of the following charges - called "closing costs"-at the time you sell your home:

• Broker's commission
• Survey
• Title insurance
• Recorded release of mortgage
• Transfer taxes
• Attorney's fee
• Home inspections

Specific Performance

In Rhode Island, a seller who agrees to sell a particular property must do so unless the buyer fails to meet all the terms of the purchase agreement. This is called "specific performance," which is a legal action to compel performance of a contract. For this contract remedy, a court can order the parties to complete the contract. The buyer must then deliver the purchase price and the seller must then deliver the deed. If you have second thoughts on a particular sale, you'll want to immediately contact an attorney.