Rhode Island Real Estate Law Addendum: Comprehensive Study Notes (2025)
Rhode Island Real Estate Law Addendum: Comprehensive Study Notes (2025)
This document provides an exhaustive guide to the key real estate laws in Rhode Island, designed for pre-licensing examination preparation. It compiles and elaborates on various chapters of the Rhode Island General Laws and the Department of Business Regulation's Commercial Licensing regulations.
Information Disclaimer and Copyright Notice
Information Presented: The manual's content is solely for educational purposes and is not intended as legal advice. All individuals with legal concerns are strongly advised to seek counsel from a licensed attorney.
Copyright Warning: This guide is exclusively for students enrolled in Rhode Island Association of REALTORS® (RIAR) Sales or Broker Pre-License courses. While individual laws are public information, this specific compilation is protected by federal and state copyright law. Unauthorized modification, copying, distribution, transmission, display, reproduction, publication, licensing, or sale of this guide is prohibited.
Table of Contents Overview
The guide covers various chapters of the Rhode Island General Laws and relevant regulations, including:
RI General Laws Chapter 5-20.5: Real Estate Brokers and Salespersons (Pages 5-27)
Title 230 - Commercial Licensing: Real Estate Brokers and Salespersons (Pages 28-53)
Escrow Deposit Transmittal, Claim for Return, Release: Forms (Pages 54-58)
RI General Laws Chapter 5-20.6: Relationships in Residential Real Estate Transactions (Pages 59-69)
Mandatory RI Relationship Disclosure, Team Addendum & Dual Facilitator Form: *Sample Forms (Pages 70-74)
RI General Laws Chapter 5-20.8: Real Estate Sales Disclosures (Pages 75-86)
RI General Laws Chapter 34-18: Residential Landlord and Tenant Act (Pages 87-142)
Landlord & Tenant Charts: A-D (Pages 143-146)
RI General Laws Chapter 34-37: Rhode Island Fair Housing Practices Act (Pages 147-167)
Lead Hazard Mitigation Chapter 128.1 and Sellers Lead Disclosure: *Sample Forms (Pages 168-187)
Fire Safety Code (Pages 188-192)
RI General Laws Chapter 2-1: Agricultural Function of Dept. of Environmental Management (Pages 193-208)
RI Cesspool Act (Pages 209-215)
Non-Resident Withholding Tax (Pages 216-217)
Condominium Law Index Chapter 34-36.1: (Pages 218-226)
*Note: Sample forms included in this Law Addendum can also be found on Sharefile for easier readability.
Chapter 5-20.5: Real Estate Brokers and Salespersons
Index of Sections
§ 5-20.5-1: Definitions.
§ 5-20.5-2: Persons exempt.
§ 5-20.5-3: Contents of application — Application fee — Recommendations required.
§ 5-20.5-4: Examination of applicants — Examination fee — Licensing without examination.
§ 5-20.5-5: Real estate recovery account.
§ 5-20.5-6: Duration and renewal of licenses — Continuing education rules and regulations — Suspension or revocation of licenses.
§ 5-20.5-7: Fixed office required — Display of license — Notice of change of address and employment.
§ 5-20.5-8: Corporations, partnerships, or associations engaging in business.
§ 5-20.5-9: Temporary license issued to representative of deceased broker.
§ 5-20.5-10: Nonresident brokers — Employment of unlicensed brokers restricted — Nonresident salespersons — Service of process.
§ 5-20.5-11: Fees and license renewals.
§ 5-20.5-12: Commission — Creation — Composition — Appointment, terms, and compensation of members — Officers — Deputy directors — Seal.
§ 5-20.5-14: Revocation, suspension of license — Probationary period — Penalties.
§ 5-20.5-15: Hearings before revocation or suspension of license.
§ 5-20.5-16: Appeals.
§ 5-20.5-17: Penalties for violations.
§ 5-20.5-18: Department assistance in educational programs.
§ 5-20.5-19: Real estate courses and schools — Regulation — Issue and revocation of permits — Exceptions.
§ 5-20.5-20: Real estate school permit — Fees — Penalty for operation without permit prohibited.
§ 5-20.5-21: Actions for recovery of fee or commission.
§ 5-20.5-22: Severability.
§ 5-20.5-25: Errors and omissions insurance required of real estate licensees.
§ 5-20.5-26: Escrows.
§ 5-20.5-27: License required for ownership.
§ 5-20.5-28: Order to cease unsafe practices — Appeal.
SECTION 5-20.5-1: Definitions
Unless the context dictates otherwise, the following definitions apply within this chapter:
Associate broker: Any licensed real estate broker who is employed by or engaged as an independent contractor by or on behalf of a licensed real estate broker to perform activities defined as those of a real estate broker, for compensation or otherwise.
Director: The director of business regulation for the state.
Opinion of value: An analysis, opinion, or conclusion prepared by a person licensed under Chapter 20.5 of Title 5. This relates to the price of specified interests or aspects of identified real estate or property, or by comparison to other recently sold real property, for the purpose of listing, purchase, or sale. This explicitly excludes appraisals prepared by persons licensed under Chapter 20.7 of Title 5 that conform to Uniform Standards of Professional Appraisal Practice (USPAP).
Real estate: As used in this chapter, it includes leaseholds and any interest or estate in land, whether corporeal or incorporeal, freehold or non-freehold, and whether the property is located in Rhode Island or elsewhere.
Real estate broker:
Includes all persons, partnerships, associations, and corporations (foreign and domestic) who:
For a fee, commission, or other valuable consideration (or with the intention/expectation of receiving such), lists, sells, purchases, exchanges, rents, leases, prepares an opinion of value, or auctions any real estate or its improvements (including options), or negotiates/attempts to negotiate such activities.
Advertises or holds themselves out as engaged in these activities.
Directs or assists in procuring a purchaser or prospect intended to result in a real estate transaction.
Also includes any person, partnership, association, or corporation employed by or on behalf of owners of lots or other parcels of real estate, at a stated salary, fee, commission, or otherwise, to sell or offer to sell, exchange, or lease such real estate in lots or parcels.
Real estate salesperson: Any person employed by or engaged as an independent contractor by or on behalf of a licensed real estate broker to perform any activity defined as that of a real estate broker, for compensation or otherwise.
SECTION 5-20.5-2: Persons Exempt
The terms "real estate broker" and "real estate salesperson" do not include:
(a) Certain Property Owners and Employees:
Any person, partnership, association, or corporation who, as a bona fide owner, lessee, or lessor, performs acts related to property they own or lease, or their regular employees performing such acts in the regular course of or as an incident to property management and investment.
Any person, partnership, association, or corporation, or their employees, who seek to acquire, lease, rent, sell, or deal in real estate that has been or will be used or held for investment by that entity.
(b) Legal and Public Officers:
Any attorney at law licensed by the Rhode Island Supreme Court.
Any person holding, in good faith, an executed power of attorney from the owner, authorizing final consummation and execution for the sale, purchase, leasing, or exchange of real estate.
Acts of any person while acting as a receiver, trustee, administrator, executor, guardian, or under court order, or under authority of a deed of trust or will.
Acts of any person, partnership, association, or corporation who appraises real or personal property for the purpose of conducting mass appraisal, municipal revaluation for tax purposes, or other forms of ad valorem appraisal.
Public officers while performing their duties as public officers.
SECTION 5-20.5-3: Contents of Application – Application Fee – Recommendations Required
(a) Initial Application Requirements:
Applicants for a new real estate broker or salesperson license must file an application (printed or electronic) with the director.
The application, along with any other required information, must include a sworn statement by the applicant detailing their age, residence, place of business, current occupation, and whether they have ever been refused a real estate license, or had one suspended or revoked, in Rhode Island or any other state.
(b) Application Fee:
All applicants must submit a fee of with their application to cover processing costs.
(c) Broker and Salesperson Specific Requirements:
Broker's License Application: Must include the names of at least three Rhode Island residents who:
Have known the applicant for three years.
Are not related to the applicant.
Will attest to the applicant's good reputation for honesty and trustworthiness.
Will recommend that a license be granted.
The applicant must be a U.S. citizen or legal resident and at least the legal age of majority (for a broker license) or at least years of age (for a salesperson license).
Salesperson's License Application: Must include a sworn statement from the broker employing the applicant, stating their opinion that the applicant is competent and trustworthy and suitable for a salesperson's license.
SECTION 5-20.5-4: Examination of Applicants – Examination Fee – Licensing Without Examination
(a) Examination Requirements:
The director requires all applicants for a real estate broker's or salesperson's license to pass a written examination.
The examination assesses knowledge of state statutes and rules/regulations related to real property, deeds, mortgages, leases, contracts, real estate relationships, and federal/state fair housing laws (specifically Chapter 37 of Title 34 regarding protected classes).
Waiver of Uniform Portion: An applicant is not required to take the uniform portion of the Rhode Island real estate licensing examination if they provide sufficient evidence of possessing an existing valid real estate license from a state that offers reciprocal waiver of the uniform portion for valid Rhode Island licensees.
Examination Fee: An examination fee, limited to the charge designated by the testing service's contract with the Department of Business Regulation, must be paid before taking the examination.
(b) Educational and Experience Requirements:
Real Estate Salesperson's License: Applicants must submit satisfactory evidence of completing a minimum of classroom hours in a real estate course from an approved school (as defined in § 5-20.5-19).
Real Estate Broker's License: Applicants must submit satisfactory proof that they:
Have been engaged full-time as a real estate salesperson for at least years immediately preceding the application date.
Have successfully completed at least hours of approved classroom study from an approved school (as defined in § 5-20.5-19), or an equivalent correspondence course from an accredited college or university extension department.
The director has sole discretion to require additional evidence or proof regarding an applicant's honesty, trustworthiness, integrity, good reputation, and competency.
(c) License Fee Remittance:
A successful applicant who fails to pay the original license fee (as per § 5-20.5-11) within year of the examination date may be required to re-take and pass the written examination.
(d) Attorneys-at-Law:
An attorney-at-law licensed by the Rhode Island Supreme Court may be granted a real estate broker's or salesperson's license without examination upon application and payment of the applicable fee (as per § 5-20.5-11).
(e) Certificate of Licensure:
A certificate of licensure will be issued by the real estate division of the Department of Business Regulation within days of request, at a cost not exceeding for each certificate.
SECTION 5-20.5-5: Real Estate Recovery Account
(a) Account Establishment and Claim Limits:
The Department of Business Regulation must establish and maintain a real estate recovery account.
Purpose: This account allows any person aggrieved by fraud, misrepresentation, or deceit by a licensed real estate broker or salesperson (acting in their professional capacity within a real estate transaction) to recover up to (fifty thousand dollars) for sustained damages, by order of the superior court of the county where the violation occurred.
Exclusions: This account cannot be used to reimburse any real estate broker or salesperson for commissions, fees, or other valuable consideration owed by another real estate broker or salesperson.
Claim Limit per Licensee: The maximum amount available for payments of claims is for any one licensee.
Payment Order: Claims are paid in the order their judgments are awarded, with the earliest judgment paid first.
Initial License Fee Contribution: When applying for an original license, real estate brokers and salespersons must pay an additional fee (determined by the department) for deposit into the real estate recovery account. This fee is returned if the license is not issued.
(b) Account Replenishment:
If the balance in the real estate recovery account is less than (two hundred thousand dollars) on December 31 of any year, all renewing real estate brokers and salespersons must pay an additional (twenty-five dollars) fee for deposit into the account during the following calendar year.
(c) Claim Procedures:
Statute of Limitations: An action for a judgment that may lead to collection from the real estate recovery account must be started no later than years from the accrual of the cause of action.
Notification to Department: When an aggrieved person begins such an action, they must notify the Department of Business Regulation in writing at the time of commencement.
Filing Verified Claim After Judgment: If an aggrieved person recovers a valid judgment in court against a licensee based on fraud, misrepresentation, or deceit (occurring on or after May 11, 1978), they may, after the termination of all proceedings (including reviews and appeals), file a verified claim in the court where the judgment was entered.
Application for Payment: Upon days' written notice to the department, the aggrieved person may apply to the court for an order directing payment from the real estate recovery account, subject to the section's limitations.
Court Hearing Requirements: The court will proceed summarily. At the hearing, the aggrieved person must show:
They are not the spouse of the debtor or the personal representative of the spouse.
They have complied with all section requirements.
They have obtained a judgment as described in subdivision (2), stating the judgment amount and the outstanding balance.
They have made all reasonable searches and inquiries for the judgment debtor's real or personal property or other assets liable for judgment satisfaction.
Based on these searches, they found no such assets, or they found some assets (which they describe), took all necessary actions for their realization, and the amount realized was insufficient to satisfy the judgment (stating the amount realized and the remaining balance).
Court Order for Payment: If the court is satisfied of the truth of all matters shown and that the aggrieved person has exhausted all remedies, it will order the Department of Business Regulation to pay from the account the sum due, within the section's limitations.
(c continued) License Revocation and Repayment:
Automatic License Revocation: If the Department pays any amount from the account in settlement of a claim or judgment against a licensee, the licensee's license is automatically revoked upon the issuance of the court order authorizing payment.
Ineligibility for New License: This broker or salesperson is ineligible for a new license until they have fully repaid the amount paid from the account on their behalf, plus interest at (twelve percent) per year.
Bankruptcy No Relief: A discharge in bankruptcy does not relieve a person from the penalties and disabilities in this subdivision.
Insufficient Funds: If the account has insufficient funds to satisfy a claim, the department will satisfy unpaid claims (or portions thereof) when sufficient money is available, in the order they were originally filed, plus accumulated interest at per year.
(d) False Filings:
It is a misdemeanor for any person or their agent to file any false or untrue notice, statement, or document required under this chapter, or one that contains any material misstatement of fact.
(e) Department Intervention:
Upon receiving notice of an action (per subdivision (c)(1)), the department may enter an appearance, file an answer, appear at the hearing, defend the action, or take any other action deemed appropriate on behalf and in the name of the defendant, and pursue any appropriate review on behalf of the defendant.
(f) Subrogation:
If the Department pays any sum from the account to a judgment creditor, the department is subrogated to all rights of the judgment creditor. The judgment creditor assigns all rights, title, and interest in the judgment to the department, and any amounts and interest recovered by the department will be deposited into the account.
(g) Waiver of Rights:
Failure of an aggrieved person to comply with the chapter's provisions concerning the real estate recovery account constitutes a waiver of any rights under this chapter.
(h) Liability Limit:
Notwithstanding any other provision, the liability of the real estate recovery account related to a single licensee shall not exceed (fifty thousand dollars).
(i) Disciplinary Action Unaffected:
Nothing in this section limits the department's authority to take disciplinary action against any licensee for violations of this chapter or department rules. Repaying obligations to the account does not nullify or modify other disciplinary proceedings.
SECTION 5-20.5-6: Duration and Renewal of Licenses – Continuing Education Rules and Regulations – Suspension or Revocation of Licenses
(a) License Issuance and Term:
If the director finds an applicant competent, trustworthy, and reasonably familiar with real estate statutes and law, a license to act as a real estate broker or salesperson will be issued.
The director will promulgate rules and regulations for the term of each license category, with no license exceeding years.
The fee for initial issuance or renewal is the current annual fee multiplied by the term of years, payable in full before issuance.
License renewal requires payment of the renewal fee and proof of continuing education completion as per department rules.
Any issued or renewed license can be suspended or revoked for cause before its expiration date.
The director, with the consent of the majority of the Rhode Island real estate commission, will issue reasonable rules and regulations governing licensed real estate brokers and salespersons to implement state laws/policies and protect public interests.
(b) Continuing Education Requirements (General):
Except as noted in subsection (d), all applicants for renewal (brokers and salespersons) must submit proof of completing a minimum of classroom hours of director-approved, real estate-oriented educational sessions or courses during the preceding -year period.
A minimum of classroom hours must cover instruction on federal, Rhode Island, or local fair housing laws and the treatment of protected classes (as designated in Chapter 37 of Title 34).
(c) License Renewal Process and Suspension/Revocation:
License renewal occurs upon payment of the renewal fee and proof of continuing education completion.
Any issued or renewed license may be suspended or revoked by the director for cause prior to the expiration date.
The director, with the consent of the Rhode Island real estate commission, shall issue reasonable rules and regulations for licensee conduct, designed to implement state laws and protect public interests.
(d) Continuing Education Exemptions and Disciplinary Actions:
Applicants whose initial broker's or salesperson's license is approved within days of its expiration date are exempt from the continuing education requirement for their first renewal.
Attorneys-at-law licensed by the state supreme court and granted a license under § 5-20.5-4(d) are exempt from continuing education requirements.
The director, after due hearing, may suspend, revoke, or refuse to renew a license upon proof that it was obtained by fraud/misrepresentation, or that the holder committed fraud/misrepresentation or criminal acts in performing their functions, or violated this statute or its rules/regulations.
(e) Lead-Based Paint Education:
For licenses issued or renewed after July 1, 2004, the director must require proof of reasonable familiarity with and knowledge of duties and responsibilities established by the Lead Poisoning Prevention Act (Chapter 24.6 of Title 23) and the Lead Hazard Mitigation Act (Chapter 128.1 of Title 42).
Notwithstanding subsection (b), this requirement applies to first renewals of licenses initially issued before July 1, 2004.
This subsection will be implemented by the director as set forth in Chapter 128.1 of Title 42 and with the advice of the Rhode Island real estate commission.
SECTION 5-20.5-7: Fixed Office Required – Display of License – Notice of Change of Address and Employment
Fixed Office Requirement: Each resident licensed real estate broker must maintain a fixed office within Rhode Island.
Records: All business records related to real estate transactions and office management must be kept at this fixed office location.
License Display: The original real estate broker's license and the original license of each employed or contracted real estate salesperson must be prominently displayed in the office.
Change Notification:
A real estate broker must communicate any change of fixed office location to the director immediately upon or prior to such change.
A real estate salesperson must communicate any change of employment or broker affiliation to the director immediately upon or prior to such change.
SECTION 5-20.5-8: Corporations, Partnerships, or Associations Engaging in Business
A real estate broker's license issued to any corporation, partnership, or association must designate the name of one principal active officer of that entity for whom the license is valid.
Every other active broker or salesperson within that corporation, partnership, or association is required to obtain an individual real estate broker or salesperson license.
SECTION 5-20.5-9: Temporary License Issued to Representative of Deceased Broker
In the event of the death of a licensed real estate broker who was a sole proprietor of a real estate business:
The director shall, upon application by the broker's legal representative, issue a temporary license without examination.
This temporary license can be issued to the legal representative or an individual they designate and who is approved by the director.
It requires the filing of a required bond and payment of the prescribed fee.
The temporary license authorizes the temporary licensee to continue transacting business for a period not exceeding year from the date of death.
SECTION 5-20.5-10: Nonresident Brokers – Employment of Unlicensed Brokers Restricted – Nonresident Salespersons – Service of Process
(a) Nonresident Brokers:
A nonresident can become a Rhode Island real estate broker by adhering to all chapter provisions.
An exception exists for nonresident real estate brokers regularly engaged in the real estate business as a vocation, who maintain a definite place of business and are licensed in another state that offers reciprocity to Rhode Island licensed brokers.
Such brokers are not required to maintain a place of business within Rhode Island.
The director will recognize an out-of-state license as qualifying if:
The other state permits licenses to be issued to Rhode Island licensed brokers without examination.
The licensing requirements of § 5-20.5-4 have been met.
(b) Employment of Unlicensed Persons:
It is unlawful for any licensed real estate broker to employ or compensate (directly or indirectly) any person for performing regulated acts who is not a licensed real estate broker or salesperson.
Exception: A licensed real estate broker may pay a commission to a licensed real estate broker of another state, provided the nonresident broker does not conduct any negotiations for which the fee, compensation, or commission is paid, within Rhode Island.
(c) Nonresident Salespersons:
A nonresident can become a Rhode Island real estate salesperson by conforming to all chapter provisions, including those in § 5-20.5-4.
This is contingent on the nonresident salesperson being regularly employed by a real estate broker licensed to do business within Rhode Island.
The director will recognize an out-of-state salesperson's license as qualifying if the other state permits licenses to be issued to Rhode Island licensed salespersons without examination.
(d) Service of Process for Nonresidents:
No license will be issued to a nonresident until they have filed a power of attorney with the director.
This power of attorney appoints the director (and successor) as their true and lawful attorney for service of process in any action or legal proceeding against them.
The nonresident agrees that service on this attorney has the same force and validity as if served on the nonresident, and this authority remains irrevocably in force as long as any liability of the nonresident in Rhode Island is outstanding.
Service is made by leaving duplicate copies with the director's office.
The director must immediately send one copy by mail (postage prepaid) to the defendant's last address on commission records.
One duplicate copy, certified by the director as having been served, is sufficient evidence of service.
Service upon the attorney is deemed service upon the principal.
SECTION 5-20.5-11: Fees and License Renewals
(a) Fee Schedule:
Application Fee: for each application.
Examination Fee: Cost is limited to the charge designated by the testing service's contract with the department.
Original Broker's License/Annual Renewal: per annum for the license term. The total fees for the term of initial licensure and renewal must be paid at the time of application.
Original Salesperson's License/Annual Renewal: per annum for the license term. The total fees for the term of initial licensure and renewal must be paid at the time of application.
(Deleted by P.L. 2024, ch 117, art 6, § 2.)
Broker's License Reinstatement (after expiration): Late fee of in addition to the required renewal fee.
Salesperson's License Reinstatement (after expiration): Late fee of in addition to the required renewal fee.
(b) License Renewal Process:
Every licensed real estate broker and salesperson wishing to renew their license for the succeeding year term must apply on a form provided by the director, containing all required information.
Any license renewal is subject to the same provisions governing issuance, suspension, and revocation of original licenses.
No license will be renewed without examination if it has expired beyond a period of year.
SECTION 5-20.5-12: Commission – Creation – Composition – Appointment, Terms, and Compensation of Members – Officers – Deputy Directors – Seal
(a) Rhode Island Real Estate Commission Creation and Composition:
Establishment: The Rhode Island real estate commission (referred to as "commission") is created within the department of business regulation.
Membership: Consists of persons, appointed by the governor, with at least one from each county.
Qualifications for Appointees: Each member must have been a citizen of Rhode Island for at least years prior to appointment.
Specific Member Types:
current licensed brokers, each engaged as a licensed broker in Rhode Island for at least years prior to appointment.
members of the general public, at least one with substantial academic experience in real estate and at least one active in citizen groups concerned with real estate practices.
Initial Terms (Starting December 31, 1973): members for one year, members for two years, member for three years, member for four years, and member for five years.
Successor Terms: Successors are appointed for -year terms and serve until their successors are appointed and qualify (by subscribing to the constitutional oath of office, filed with the secretary of state).
Vacancies: Members to fill vacancies are appointed for the unexpired term.
Term Limits: No member can be appointed to succeed themselves for more than one full term.
Ex-Officio Members: The attorney general (or designee) and the director of the department (or designee) serve as ex-officio members. They have full voting powers and serve without compensation.
Organization: Upon qualification, the commission organizes by selecting a chairperson from its members.
Rules and Regulations: The commission will adopt reasonable rules and regulations to fulfill its purposes. The Department of Business Regulation, with commission assistance, will establish rules and regulations to ensure education and practice requirements of license holders meet public interest.
(b) Staffing:
The director will employ a deputy director and other necessary employees to discharge duties imposed by this chapter.
The director will determine and prescribe their duties and fix their compensation, subject to state general laws.
(c) Member Compensation:
Commission members do not receive compensation for official duties but are reimbursed for actual and necessary expenses incurred.
(d) Seal and Records:
The commission will adopt a seal of its prescribed design.
Certified and authenticated copies of all commission records and papers (with its seal) are admissible in court with the same effect as originals.
All commission records are open to public inspection under reasonable rules it prescribes.
(e) Policy-Making and Advisory Role:
The commission has a policy-making role in preparing and composing examinations administered by the real estate division within the Department of Business Regulation.
After administration, the commission reviews examinations to evaluate effectiveness.
The commission supervises the real estate division's operations in an advisory capacity for promulgating policies to improve operations in their areas of expertise.
The promulgation of such policy is subject to the director's approval.
SECTION 5-20.5-14: Revocation, Suspension of License – Probationary Period – Penalties
(a) Grounds for Disciplinary Action:
The director may, on his or her own motion, or must, upon receipt of a written verified complaint, ascertain facts and, if warranted, hold a hearing for license suspension or revocation.
The director can refuse a license or suspend/revoke a license or place a licensee on probation (up to year) if it was obtained by false representation, fraudulent act/conduct, or if a licensee performing acts mentioned in this chapter committed any of the following acts/practices:
Making any substantial misrepresentation.
Making false promises likely to influence/persuade/induce entry into a contract/agreement when the licensee could not or did not intend to keep the promise.
Persuing a continued and flagrant course of misrepresentation or false promises through salespersons, others, or advertising.
Any misleading or untruthful advertising.
Failing to deposit money or other customer funds into a compliant escrow account (as per § 5-20.5-26) upon execution of a purchase and sale agreement.
Failing to preserve records related to any real estate transaction for years following consummation, as described in department regulations.
Acting for more than one party in a transaction without the written knowledge and consent of all parties.
Placing a "for sale" or "for rent" sign on property without the written consent of the owner or authorized agent.
Failing to furnish copies of any listing, sale, lease, or other relevant contract to all signatories at the time of execution.
Failing to specify a definite termination date (not subject to prior notice) in any listing contract.
Inducing a party to a contract, sale, or lease to break it for the purpose of substituting a new contract, motivated by the licensee's personal gain.
Accepting a commission or valuable consideration for professional acts from any person other than the licensed real estate broker with whom they are affiliated.
Failing to disclose to an owner their intention or true position if they, directly or indirectly through a third party, purchase or acquire (or intend to acquire) any interest in or option to purchase property listed with their office.
Being convicted of any criminal felony in state or federal court involving dishonesty, breach of trust, forgery, embezzlement, obtaining money under false pretenses, bribery, larceny, extortion, conspiracy to defraud, fraud, false dealing, or similar offenses; or pleading guilty or nolo contendere to such offenses.
Violating any department rule or regulation promulgated in the public interest and consistent with this chapter.
(For broker licensees) Failing to exercise adequate supervision over the activities of their licensed salespersons within the scope of this chapter.
Failing or refusing to provide information requested by the commission or director due to a formal or informal complaint indicating a violation of this chapter.
Soliciting, selling, or offering for sale real property by offering free lots, conducting lotteries/contests, or offering prizes to influence a purchaser.
Paying or accepting, giving, or charging any undisclosed commission, rebate, compensation, or profit/expenditures for a principal or in violation of this chapter.
Any conduct in a real estate transaction demonstrating bad faith, dishonesty, untrustworthiness, or incompetence.
Failing to have all listing agreements in writing, properly identifying the property, containing all sale terms/conditions (including commission), signatures of all parties, and a definite expiration date that does not require owner notification for termination. Exclusive agency or exclusive right to sell listings must be clearly indicated.
Accepting a listing based on "net price." If an owner insists on this, the agreed-upon commission must be added, and listings made as usual.
Negotiating or attempting to negotiate directly with an owner/lessor knowing they have an outstanding exclusive listing contract with another licensee, unless:
The licensee is contacted by the other broker's client regarding a real estate service and has not directly or indirectly initiated discussions.
The licensee may then discuss terms for a future agency agreement or enter an agreement effective upon termination of existing exclusive agreement, or enter an agreement for other real estate service not covered by an existing agency relationship.
Accepting an exclusive right to sell/lease or exclusive agency and subsequently failing to make a diligent effort to sell or lease the property.
Advising against the use of an attorney in any real estate transaction.
Representing to any lender or party in interest (verbally or via false sales contract) an amount other than the true and actual sales price.
Submitting a written offer to purchase/lease to an owner unless it contains essential terms/conditions of the offer (including payment method) and clearly states any contingencies, or unless conditioned upon later execution of a complete agreement.
Paying escrow funds to any person or converting them for personal use in a failed transaction without complying with department rules on transferring disputed deposit funds to the general treasurer's office.
Advertising property for sale/rent/exchange/lease in a manner indicating the offer is from a private party not in real estate, or using advertisements with only a post office/box number, telephone number, or street address. Salespersons cannot advertise property under their own name.
(As a licensed salesperson) Failing, upon termination of employment/affiliation and demand by the broker, to immediately turn over all information, records, or materials obtained during employment (whether provided by broker, copied from records, or acquired by salesperson).
Offering, promising, giving, or paying (directly or indirectly) any part of commission/compensation from a real estate transaction to any person not licensed as a real estate broker (who should be licensed) or not a salesperson employed by that licensee.
Violating Chapter 37 of Title 34 (Fair Housing) in their capacity as a licensee, including but not limited to, soliciting sale/lease or listing of residential property based on loss of value due to entry (present or prospective) of persons of another race, religion, or ethnic origin, or distributing materials/making statements designed to induce sale/lease due to these factors.
(Employing broker's failure) To notify the director in writing within days of salesperson's employment/contractual relationship termination. (Salesperson's failure) To notify the director in writing within days of any change in broker affiliation.
Failure to report all written offers to the owner prior to the owner signing a purchase and sale agreement.
Failure of agents to provide buyers and sellers with mandated real estate agency relationship disclosures as specified in Chapter 20.6 of this title.
Failure of an associate broker to inform the public of associate broker status by not listing it on business cards/correspondence or by stating their status in the firm is that of broker.
Failure to pay escrow funds (per § 5-20.5-26) within days of receiving a written release signed by all parties to a failed real estate transaction.
(b) Administrative Penalties:
The director is authorized to levy an administrative penalty not exceeding (two thousand dollars) for any violation under this section or the department's rules and regulations.
SECTION 5-20.5-15: Hearings Before Revocation or Suspension of License
(a) Notice and Hearing Procedure:
Department-Initiated Action: Before refusing to issue or suspending/revoking a license on its own motion, the division of professional regulation must notify the applicant/licensee of its intended action and grounds. The applicant/licensee may, within days, file a hearing request with the division, stating their answer. The division will then set a hearing date, notifying the applicant/licensee at least days prior.
Complaint-Initiated Action: Before refusing to issue or suspending/revoking a license based on a verified written complaint (under § 5-20.5-17), the department must notify the accused applicant/licensee in writing of the complaint and enclose a copy. The accused must file their answer with the department within days.
Scheduling Hearing: The division will transmit a copy of the answer to the complainant(s) and set a time and place for a hearing, which must be at least days prior to the hearing date.
Service of Notices/Answers: All required/authorized notices and answers can be served or filed personally, or by certified mail to the addressee's last known business address. Time runs from the date of service (if personal) or the postmarked date (if by registered mail).
Hearing Conduct: Hearings are open to the public and conducted according to Title 42, Chapter 35 (Administrative Procedures) and the department's rules of procedure for administrative hearings. The applicant/licensee has the opportunity to be heard in person or by counsel.
A hearing officer (appointed by the director) will render a decision on any application/complaint within days after the final hearing and immediately notify parties in writing of the ruling.
If the complaint involves a pending court case, the division may withhold its decision until court action concludes.
Hearings must follow rules promulgated by the division in conformity with law.
(b) Broker Responsibility for Salesperson's Violations:
An unlawful act or violation by any salesperson is not cause for suspension or revocation of the affiliated broker's license, unless the division of professional regulation is satisfied that the broker had knowledge of the unlawful act or violation.
(c) Subpoena Power:
The division of professional regulation can issue subpoenas for witness attendance and production of records/documents. Process can extend statewide and be served by a division designee, who receives compensation (not to exceed statutory fees).
Witnesses subpoenaed receive the same fees and mileage allowances as in superior court civil cases, taxed as costs.
(d) Enforcement of Subpoenas:
If a witness fails to attend, refuses to testify, or refuses to produce documents under subpoena, the attendance, testimony, and production will be enforced by any competent state court in the same manner as civil cases.
SECTION 5-20.5-16: Appeals
(a) Applicability of Administrative Procedures Act:
The provisions of the Administrative Procedures Act (Chapter 35 of Title 42) and its amendments/modifications, along with rules adopted under it, apply to and govern all proceedings for judicial review of final administrative decisions by the Department of Business Regulation.
Any aggrieved party may seek review of a final administrative decision in the superior court of their county of residence.
(b) Right of Appeal:
Any aggrieved person has the right to appeal from any adverse ruling, order, or decision of the Department of Business Regulation to a competent court in the county where the hearing was held, within days from the service of notice of the department's action.
(c) Appeal Procedure:
Notice of appeal must be filed with the clerk of the court.
The court will then issue a writ of certiorari directed to the Department of Business Regulation, commanding it to certify its entire record in the matter to the court within days after service of the writ.
The appeal will be heard in due course by the court, which will review the record and make its determination after a hearing.
(d) Effectiveness of Decision During Appeal:
A final administrative decision of the Department of Business Regulation does not become effective until the time for appeal has expired.
If an appeal is taken, it does not act as a supersedeas unless the court so directs.
(e) Bond Requirement:
Any person taking an appeal must post a bond in the amount of (one thousand dollars) for payment of any assessed costs.
SECTION 5-20.5-17: Penalties for Violations
(a) Operating Without a License:
Any person acting as a broker or salesperson without a license is guilty of a misdemeanor.
First Offense: Punishable by a fine of not less than (one hundred dollars) nor more than (five hundred dollars), or imprisonment up to year, or both.
If a corporation, punishable by a fine of not less than (one thousand dollars) nor more than (two thousand dollars).
Second or Subsequent Offense: Punishable by a fine of not less than (five hundred dollars) nor more than (one thousand dollars), or imprisonment up to years, or both.
If a corporation, punishable by a fine of not less than (two thousand dollars) nor more than (five thousand dollars).
(b) Unlawful Receipt of Money:
If any person received money or its equivalent (fee, commission, compensation, profit) due to a violation of this chapter, they are additionally liable for a penalty.
This penalty is not less than the amount received and not more than times the amount received, as determined by the court.
This penalty can be recovered in any competent court by any aggrieved person.
SECTION 5-20.5-18: Department Assistance in Educational Programs
(a) Conducting/Assisting Educational Programs:
The Department of Business Regulation is authorized to conduct, hold, or assist in conducting/holding real estate clinics, meetings, courses, or institutes.
It can incur necessary expenses related to these activities, which are open to all licensees.
(b) Assisting Educational Institutions:
The department is authorized to assist educational institutions within Rhode Island in sponsoring studies, research, and programs.
The purpose is to raise the standards of professional practice in real estate and the competence of licensees in the public interest.
SECTION 5-20.5-19: Real Estate Courses and Schools – Regulation – Issue and Revocation of Permits – Exceptions
(a) Regulation Formulation:
The division of professional regulation is authorized to formulate rules and regulations regarding the establishment and operation of real estate schools, courses of study, instruction, grades, grading systems, and related matters.
The division and the board of governors for higher education have the power to review the curriculum of these courses at any time.
(b) Permit Requirement:
Any school, individual, or organization offering or conducting real estate courses, or courses designed to help non-licensees/applicants pass division examinations, must first obtain a permit from the division.
They must also subsequently abide by the division's rules and regulations for such schools.
(c) Permit Suspension/Revocation and Exceptions:
The division has the authority to suspend or revoke the permit of any school, individual, or organization for violating this chapter's provisions or its promulgated rules and regulations.
Exceptions: This section does not apply to any college or university accredited by an accrediting body approved by the board of governors for higher education.
SECTION 5-20.5-20: Real Estate School Permit – Fees – Penalty for Operation Without Permit Prohibited
(a) Unlawful Practices for Schools:
It is unlawful for any school to:
Offer courses or conduct classes in real estate subjects without first procuring a permit.
Having obtained a permit, represent that its students are assured of passing division examinations.
Represent that the issuance of a permit is a recommendation or endorsement of the school or any course it offers.
(b) Permit Fees:
The application for each school must be accompanied by:
A first-year license fee of (two hundred fifty dollars).
A further fee of (one hundred dollars) multiplied by the remaining term of licensure.
If issued, the license is renewable upon payment of a renewal fee assessed at (one hundred fifty dollars) per annum.
The total fee for the entire term of initial licensure and renewal must be paid at the time of application.
(c) Penalties for Violations:
Any person found guilty of violating this section (operating a school, or rules/regulations, or operating after permit revocation/suspension) is guilty of a misdemeanor.
(d) License Term and Renewal:
The Department of Business Regulation will promulgate rules and regulations mandating the term of license and renewal for each permit issued.
No license will remain in force for a period exceeding years.
SECTION 5-20.5-21: Actions for Recovery of Fee or Commission
Except as provided in this chapter, no person can maintain an action in any Rhode Island court for the recovery of a commission, fee, or compensation for any act the doing of which is prohibited to unlicensed brokers under this chapter.
This is conditional on that person being licensed under this chapter as a broker at the time the act was performed.
SECTION 5-20.5-22: Severability
If any provision of this chapter is held invalid, that provision is deemed excised from the chapter, and its invalidity does not affect any other provisions.
If the application of any provision to any person or circumstance is held invalid, it does not affect the application of that provision to other persons or circumstances.
SECTION 5-20.5-25: Errors and Omissions Insurance Required of Real Estate Licensees
(a) Requirement:
All holders of real estate brokers' and salespersons' licenses issued by the state Department of Business Regulation must, as a condition of retaining their license, carry and maintain errors and omissions insurance covering all contemplated business activities.
(b) Independent Coverage:
Licensees must obtain errors and omissions insurance independently.
The policy's coverage must comply with the minimum requirements established by the Department of Business Regulation.
(c) Terms and Conditions of Coverage:
The Department of Business Regulation will determine the terms and conditions of mandated coverage, including:
Minimum limits of coverage.
Permissible deductible.
Permissible exemptions.
The department will seek assistance from the real estate commission regarding coverage terms and conditions.
(d) Certificate of Coverage Filing:
A certificate of coverage must be filed with the Department of Business Regulation by the annual license renewal date by each licensee.
SECTION 5-20.5-26: Escrows
(a) Escrow Account Rules:
Escrow accounts:
Each real estate firm must maintain an escrow account under the supervision of the broker qualified to do business in the firm's name.
Funds paid to a salesperson or directly to a broker must be segregated on the broker's books and deposited in a separate account in a recognized federally insured financial institution in Rhode Island, distinct from any account containing broker-owned funds.
Brokers or salespersons must not commingle deposit money or other customer funds with their own funds, use customer funds as their own, or fail to maintain escrow/trustee account records for years, showing ownership, deposit/withdrawal dates, recipient, and other pertinent information required by the commission. These records must be available on demand or written notice.
Each broker/office supervisor must maintain a monthly report on the escrow account status and is responsible for its accuracy.
A multi-office firm can have an escrow account for each office or one central account for the firm.
Earned commission may be applied from funds held in escrow by the listing company.
Disputed Deposits: If ownership of deposit monies received by a broker/salesperson is disputed, the monies must be deposited with the General Treasurer within days of the original deposit date. These funds are held in trust until mediated, arbitrated, litigated, or otherwise resolved by the parties. Parties can agree in writing to extend this period per department regulations.
The Department of Business Regulation has the authority to promulgate rules and regulations regarding escrow accounts and depositing monies with the General Treasurer.
Escrow agents: Funds or deposits in escrow may be held by any legally authorized person or entity (e.g., real estate broker or attorney).
(b) Dual Activities:
In real estate transactions where a broker holds multiple titles (e.g., builder, contractor, insurance agent), all deposit monies received must be placed in the broker's real estate escrow account, unless there is a contractual agreement between the principals to the contrary.
(c) Unlawful Appropriation:
Pursuant to § 11-41-11.1, any licensee entrusted with escrow funds who intentionally appropriates them for their own use, or transfers funds from an escrow account to a company or personal account prior to closing, is guilty of unlawful appropriation.
(d) Release of Funds:
An escrow agent shall pay sums held in an escrow account as instructed by parties to a failed real estate transaction within days of receiving a written release signed by all parties.
SECTION 5-20.5-27: License Required for Ownership
No person, firm, or corporation shall have an ownership interest in a real estate brokerage firm nor participate in its operation unless they hold a valid real estate broker's license issued under this chapter.
SECTION 5-20.5-28: Order to Cease Unsafe Practices – Appeal
If the Department of Business Regulation believes any person, firm, corporation, or association is conducting activities requiring licensure without a license, or after denial/suspension/revocation of a license, the department may issue an order to them.
This order commands them to appear at a hearing ( to days after issuance) to show cause why a cease and desist order should not be issued.
The show cause order can be served like a civil summons, or by certified mail (return receipt requested) to the person's business or residential address.
If, after the hearing, the department is satisfied a violation exists, it may issue a written cease and desist order.
All hearings are governed by the Administrative Procedures Act (Chapter 35 of Title 42).
If the person fails to comply with a department order after a hearing, the superior court in the county where the land is located has jurisdiction, upon the department's complaint, to restrain and enjoin the person from violating this chapter.
Title 230 – Commercial Licensing: Real Estate Brokers and Salespersons
Part 2 – Real Estate Brokers and Salespersons
SECTION 2.1: Authority and Purpose
A. Authority: This regulation is promulgated pursuant to R.I. Gen. Laws §§ 5-20.5-6, 5-20.5-12, 5-20.5-19, 5-20.5-20, 5-20.5-26(a)(1)(v), and 5-20.6-12.
B. Purpose: To promote the general welfare of Rhode Island citizens by implementing R.I. Gen. Laws § 5-20.5 and § 5-20.6, ensuring their effective realization and optimal public service.
SECTION 2.2: Definitions
In addition to R.I. Gen. Laws §§ 5-20.5-1 and 5-20.6-2, the following terms have these meanings in this Part:
Appraisal or real estate appraisal: An analysis, opinion, or conclusion regarding the nature, quality, value, or utility of specified interests in, or aspects of, identified real estate. Prepared by a person licensed under R.I. Gen. Laws § 5-20.7-1 et seq. and Part 1 of this Subchapter, conforming to USPAP standards (R.I. Gen. Laws § 5-20.7-19).
Brokerage: A business entity, sole proprietorship, or partnership operating as a real estate broker, as defined in R.I. Laws § 5-20.5-1.
Broker price opinion or BPO: An analysis, opinion, or conclusion prepared by a person licensed under R.I. Gen. Laws Chapter 5-20.5, in the ordinary course of business, relating to the price of specified interests in or aspects of identified real estate or property for listing, purchase, or sale purposes.
Classroom: Either a physical classroom with an in-person instructor or a live-virtual classroom with interactive instruction between instructor and students.
Clock hour: A period of at least minutes of classroom instruction.
Comparative market analysis or CMA: An analysis, opinion, or conclusion prepared by a person licensed under R.I. Gen. Laws Chapter 5-20.5, in the ordinary course of business, relating to the price of specified interests in or aspects of identified real estate or property by comparison to other currently or recently sold real property for listing, purchase, or sale purposes.
Department: The Department of Business Regulation.
License: A real estate salesperson or broker license issued by the Department.
Net Listing: An agreement where a prospective seller lists real estate for sale with authorization for a broker to sell at a specified net dollar return to the seller, and the broker may retain the difference between the specified net return and the actual sales price as commission.
Promptly: Not more than calendar days.
Real Estate Commission: The Commission created pursuant to R.I. Gen. Laws § 5-20.5-12.
Social Media: Any digital tool for users to create and share public content (e.g., Twitter, LinkedIn, Facebook, Instagram, YouTube, TikTok).
Teams: Two or more licensees who:
Work under the supervision of the same principal broker to perform licensed activities.
Represent themselves to the public as being part of a team or group.
Are designated by a team name approved by the principal broker and different from the brokerage name.
SECTION 2.3: Licensee’s Name and Address
Upon initial licensure and at all times thereafter, every licensee must ensure the Department has their current personal name, firm affiliation, trade name, residence address, and firm address on record.
Licensees must notify the Department in writing of any change to the above information within days of the change.
All addresses must be sufficiently descriptive to enable communication with and location of the licensee.
SECTION 2.4: Principal Brokers and Brokerages
A. Supervisory Capacity: The principal broker must act in a supervisory capacity for every real estate transaction in which an affiliated licensee participates.
B. Compliance Responsibility (Licensees): The principal broker is responsible for the compliance of his or her affiliated licensees with Rhode Island General Laws pertaining to real estate licensure and this Regulation.
C. Compliance Responsibility (Non-licensed Employees): The principal broker is responsible for the compliance of his or her non-licensed employees with Rhode Island General Laws pertaining to real estate licensure and this Regulation.
D. Escrow Account Management: The principal broker must maintain an escrow account for client funds and ensure no client funds are disbursed or utilized without his or her express authorization and knowledge.
E. Responsibilities of Principal Broker: The principal broker is responsible for:
Adequate supervision of each affiliated licensee and each brokerage office conducting licensed real estate activities.
Filing any change of business address or trade name of the brokerage and registering any assumed business name used by the brokerage with the Department.
Notifying the Department in writing of any change of his or her status as principal broker within days following the change.
Proper display of all licenses.
Verifying that each affiliated licensee has a license in good standing with the Department at the start of each renewal term.
Proper retention and maintenance of records related to transactions conducted by or on behalf of the brokerage at such office.
Preserving and safekeeping transaction and escrow account records upon termination of his or her status as principal broker until a new principal broker is designated.
All real estate activities of teams under his or her supervision, including: maintaining the brokerage escrow account, approving team management agreements, approving team names and logos, monitoring team advertising, keeping current lists of team members, and all other functions related to adequate supervision of team licensees.
F. Dual Licensee Provision (Insurance): If a principal broker, in his or her capacity as an insurance licensee, is authorized to place or procure insurance on a property being sold through a contract provided by the principal broker, he or she must obtain written reaffirmation of such provision by the prospective insured within days prior to the closing of title.
SECTION 2.5: Salespersons
A licensed real estate salesperson must be affiliated with a licensed principal broker to engage in any real estate activity requiring licensure.
A licensed salesperson shall not operate, supervise, or manage a real estate brokerage.
SECTION 2.6: Examinations
A. Format and Extensions: Examinations may be written or oral. Requests for an oral examination or time extension can be made to and granted at the discretion of the Department.
B. Reexamination Time Limit: There is a -year time limit for reexamination regarding failure of any section of the Broker or Salesperson examination. If an applicant fails a section, they may retake it within this -year limit.
If the -year time limit expires, the applicant must retake the entire examination.
C. Expired Licensees: If a license has expired for more than year, the former licensee must complete a new application and retake the examination in accordance with R.I. Gen. Laws § 5-20.5-11(b).
SECTION 2.7: Pre-Licensing Education Requirements
A. Salesperson License Applicants: Must submit satisfactory evidence of completing a minimum of classroom hours (per R.I. Gen. Laws § 5-20.5-4(b)).
This also applies to former licensees whose salesperson's license has expired for more than year.
Classroom hours completed more than years from the application date will not count towards the -hour requirement.
B. Broker License Applicants: Must submit satisfactory evidence of completing a minimum of classroom hours, unless exempted under R.I. Gen. Laws § 5-20.5-4(b).
This also applies to former licensees whose broker's license has expired for more than years.
C. Hour Segregation: The classroom hours used for a salesperson's license cannot be used towards the hours required for a broker's license.
Classroom hours completed more than years from the application date will not count towards the -hour requirement.
D. Course Delivery Requirements: All pre-licensing courses must be taken in a classroom (as defined in § 2.2(A)(3) of this Part) and comply with:
In-person classroom: Real estate school and instructors must:
Verify each student's identity before each course and take attendance at each session.
Implement policies to monitor student attendance and participation for the duration of each instructional session.
Keep attendance records for each course and session for years.
Live-virtual classroom: Real estate school and instructors must:
Ensure all remotely delivered instruction is live and interactive.
Prohibition: On-demand and pre-recorded instruction is prohibited for pre-licensing courses. (This does not prohibit viewing videos/multimedia as part of a course, provided most of the course is real-time interaction).
Verify each student's identity before the course and take attendance at each session.
Implement policies to monitor student attendance, participation, and engagement during each session, including:
Requiring students to be on video and visible to the instructor and other students at all times.
Ensuring real-time visual, auditory, and communication ability between instructors and students.
Implement a Code of Conduct for students (e.g., prohibiting taking the course while driving, consuming alcohol, wearing inappropriate attire).
Keep attendance records for each course and session for years.
E. Department Auditing: The Department's representative may attend any pre-licensing course at no charge to evaluate compliance. Live-virtual classroom schools must provide login credentials to the Department for auditing.
SECTION 2.8: Fees
A. Real Estate Recovery Fund Fee: Before the Department issues an original license, applicants must pay a fee of (twenty-five dollars) for deposit into the Real Estate Recovery Fund Account.
B. Payment Method: Any statutory fees must be paid by check or money order payable to the Rhode Island General Treasurer.
C. Returned Checks: If a check is dishonored, subsequent payments must be by money order or cashier's check. Returned checks may subject licensees to disciplinary action under R.I. Gen. Laws § 5-20.5-14.
SECTION 2.9: License Renewal Term
A. Renewal Application: Every licensed real estate broker or salesperson desiring to renew a License must apply for renewal by submitting a complete renewal application and paying the appropriate fee in accordance with R.I. Gen. Laws § 5-20.5-11.
B. Licenses Issued Before 2020: Licenses issued before January 1, 2020, must be renewed every years on May 1 of each even-numbered year.
C. Licenses Issued After 2020: Licenses issued after January 1, 2020, must be renewed every years on the anniversary of the license issuance date.
D. Licensee Responsibility: Licensees are responsible for timely renewal. Courtesy notices from the Department do not relieve licensees of this responsibility.
E. Failure to Renew: Failure to renew before the expiration date will result in administrative disciplinary proceedings under the Administrative Procedures Act (R.I. Gen. Laws Chapter 42-35) and the Department's Rules of Procedure for Administrative Hearings.
F. Administrative Penalties: The Department may impose administrative penalties as a condition of license reinstatement, considering aggravating or mitigating circumstances.
SECTION 2.10: Disaffiliation of Licensee
A. Principal Broker's Notice: When a licensee disaffiliates from a brokerage, the principal broker must send written notice of the disaffiliation to the Real Estate Section of the Department.
New Brokerage Transfer Form: The principal broker of the licensee's new brokerage must sign and submit a transfer of license form to the Department.
B. License Return: Licensees are not required to return their license to the Department unless it has been revoked or they wish to surrender it.
SECTION 2.11: Dissolution of Brokerage
The principal broker must notify the Department in writing of the brokerage's dissolution and return his or her license to the Department within days.
Upon dissolution, all licensees affiliated with that brokerage must transfer their license to another brokerage or return it to the Department for cancellation within days.
SECTION 2.12: Property Management Companies
A. Licensing Requirement: Any person performing acts defined as a "real estate broker" (R.I. Gen. Laws § 5-20.5-1(5)) in the regular course of, or as an incident to, managing another person's real property must be licensed as a real estate broker under R.I. Gen. Laws Chapter 5-20.5.
B. Exemptions: This section does not apply to a bona fide owner, lessor, or lessee of the real property being managed, or their regular employees.
SECTION 2.13: Reporting Convictions and Disciplinary Actions
Any licensee convicted of, or who pleads guilty or nolo contendere to, any felony or misdemeanor, or is disciplined by any governmental agency concerning another occupational license, must file a written report of such conviction or disciplinary action with the Department within days of the final judgment or order.
SECTION 2.14: Discriminatory Practices Prohibited
A. Prohibited Solicitations and Materials: No licensee shall solicit the sale, lease, or listing of residential property due to the actual or prospective entry into the neighborhood of an individual or individuals of any protected class (designated in the Rhode Island Fair Housing Practices Act, R.I. Gen. Laws 34-37).
Licensees shall not distribute material or make statements designed to induce a residential property owner to sell or lease their property due to such neighborhood changes.
B. Fair Housing Act Compliance: No licensee shall violate the Fair Housing Practices Act (R.I. Gen. Laws § 34-37), the Civil Rights Act of 1866 (42 U.S.C. §§ 1981-1982), or the Civil Rights Act of 1968 (Title VIII and Title IX, 42 U.S.C. §§ 3601-19, and 3631), to the extent that such violation constitutes a violation of Rhode Island General Laws pertaining to real estate licensure and this regulation.
C. Prohibited Advertising: No licensee or brokerage shall advertise or use any application form or make any inquiry that expresses directly or indirectly any limitation, specification, or discrimination as to individuals of any protected class designated in the Rhode Island Fair Housing Practices Act R.I. Gen. Laws § 34-37.
SECTION 2.15: Additional Grounds for Disciplinary Action
A. Unlicensed Activity: No person shall engage in licensed real estate activity while their license is expired, revoked, suspended, or otherwise invalid.
B. Fraudulent Continuing Education Certification: A licensee who fraudulently certifies to the Department the completion of the continuing education requirement (described in § 2.30 of this Part) may be subject to license suspension (after notice and hearing opportunity) until the requirements of § 2.30 are satisfied.
SECTION 2.16: Conduct of Contested Cases
A. Powers and Proceedings: All complaint and enforcement proceedings under R.I. Gen. Laws Chapters 5-20.5 and 5-20.6 and this Part are governed by the Administrative Procedures Act (R.I. Gen. Laws Chapter 42-35) and the Department's Rules of Procedure for Administrative Hearings, Part 10-00-2 of this Title.
B. Complaints: Any person may file a written complaint, signed by the complainant and on a Department-provided form, against any licensee or unlicensed person who should be licensed.
The Department will initially determine jurisdiction. If no jurisdiction, the complainant is notified in writing.
If jurisdiction exists, the Department conducts an appropriate investigation, including forwarding a copy of the complaint to the Respondent.
If instructed by the Department, the Respondent must file a response within business days or another specified timeframe.
C. Actions Upon Investigation Completion: Upon completing its investigation, the Department will take one of the following actions:
If the complaint fails to establish probable cause of a violation, the Department takes no action and advises both Complainant and Respondent in writing.
If the complaint establishes probable cause, the Department takes appropriate action under applicable law and rules/regulations.
D. Department Investigations: The Department, on its own authority, may initiate an investigation and take action:
Against a licensee.
Against an applicant for a license or renewal.
Against any person who is required to be licensed but is not.
Against any person subject to Department regulatory authority.
All such actions must be on terms and conditions permitted under applicable law and rules/regulations.
SECTION 2.17: License Restoration
A. Conditions for Restoration: Following license revocation or suspension due to disciplinary action, the Director may impose certain conditions for any future license restoration.
B. Examples of Conditions: Such conditions may include, but are not limited to:
Successful completion of a written examination of the type normally given to initial license applicants.
Successful completion of specific continuing education courses.
Providing an updated criminal background check from the Attorney General’s Bureau of Criminal Information (BCI).
Sufficient evidence of rehabilitation, if the nature of the offense warrants it.
Payment of an administrative penalty, with consideration for aggravating or mitigating circumstances.
SECTION 2.18: Client Funds
A. Escrow Accounts:
The principal broker is responsible for every escrow account maintained for the brokerage and its offices.
Escrow accounts must be designated as such by the financial institution, on deposit tickets, and on checks. Monthly bank statements must bear