Rhode Island Real Estate Broker Exam — All Questions

Which characteristic is a protected class under the Rhode Island Fair Housing Practices Act but not under the federal Fair Housing Act?

• a.The race or color of a tenant
• b.The religion a prospective tenant practices
• c.The national origin of a prospective tenant
• d.The lawful source of a tenant's income✓

R.I. Gen. Laws § 34-37-4(a) bars an owner or agent from refusing to sell, rent or lease, or from inquiring, on the basis of “race, color, religion, sex, sexual orientation, gender identity or expression, marital status, lawful source of income, military status as a veteran with an honorable discharge ..., servicemember in the armed forces, country of ancestral origin, or disability, age, familial status,” and separately protects a person who is or has been the victim of domestic abuse or who has sought a restraining order. Lawful source of income — which reaches housing vouchers — is one of the Rhode Island additions, along with sexual orientation, gender identity or expression, marital status, military status and age. Race, color, religion and national origin are federal classes under 42 U.S.C. § 3604 as well, so none of them distinguishes the state act. Complaints go to the Rhode Island Commission for Human Rights within one year of the practice (§ 34-37-5(b)).

A Rhode Island broker managing residential rentals must ensure the firm's advertising does what?

• a.Omits the brokerage name so no firm is associated with a rental listing
• b.Complies with the Fair Housing Practices Act in wording and in targeting✓
• c.Targets tenants by protected class so that vacant units fill more quickly
• d.Promises the owner a specific rate of return on the rental investment

R.I. Gen. Laws § 34-37-4(a) forbids an owner or agent from issuing “any advertisement relating to the sale, rental, or lease of the housing accommodation that indicates any preference, limitation, specification, or discrimination” on a protected basis, and 230-RICR-30-20-2 § 2.14(C) repeats the prohibition as a licensing rule covering advertising, application forms and inquiries alike. Targeting tenants by protected class is the discrimination the Act forbids, and filling units faster is not a defense. Omitting the brokerage name breaks a different rule: § 2.25(C)(1) requires the brokerage name in all advertising, displayed larger and more prominently than any licensee or team name. Guaranteeing an owner a rate of return is a claim about money that § 5-20.5-14(2) treats as a false promise likely to induce a contract.

What does the Rhode Island Residential Landlord and Tenant Act govern?

• a.The rights and duties of residential landlords and tenants in this state✓
• b.The licensing and continuing education of real estate appraisers here
• c.The granting of variances by municipal zoning boards of review here
• d.The terms of commercial office leases and no residential tenancy at all

Chapter 34-18 sets out the rights and obligations of residential landlords and tenants — security deposits under § 34-18-19, the terms a rental agreement may and must contain under § 34-18-15, and the notice each side must give to end a periodic tenancy under § 34-18-37. A broker who handles rentals or manages property in Rhode Island works inside it, which is why 230-RICR-30-20-2 § 2.30(B)(1)(c) lists Rhode Island landlord-tenant law as a continuing education core subject and § 2.12 requires a license for anyone managing another person's property for compensation. Appraiser credentials belong to chapter 5-20.7 and a separate profession; zoning variances are decided by local boards under title 45; and the Act is residential by its own title, so a commercial-only reading omits exactly what it covers.

What limits does Rhode Island place on a residential security deposit and its return?

• a.One month's rent at most, itemized and returned within twenty days✓
• b.Three months' rent at most, itemized and returned within sixty days
• c.No limit on the amount, but it is returned within fourteen days
• d.Two months' rent at most, itemized and returned within thirty days

R.I. Gen. Laws § 34-18-19(a) provides that “a landlord may not demand or receive a security deposit, however denominated, in an amount or value in excess of one month's periodic rent.” Subsection (b) requires the landlord to deliver a written, itemized notice of any deductions together with the balance “within twenty (20) days after the later of either termination of the tenancy, delivery of possession, or the tenant's providing the landlord with a forwarding address.” The penalty for missing it is steep: under § 34-18-19(c) the tenant may recover the amount due plus damages equal to twice the sum wrongfully withheld, plus reasonable attorney fees. A separate furniture security deposit of up to one further month's rent is allowed under § 34-18-19(e), but only where the landlord's furniture is worth five thousand dollars or more.

Before an owner may fill part of a freshwater wetland on a Rhode Island lot, whose approval is needed?

• a.The planning board of the city or town where the lot lies
• b.The director of the Department of Environmental Management✓
• c.The Coastal Resources Management Council for that region
• d.The Real Estate Commission at the Department of Business Regulation

R.I. Gen. Laws § 2-1-21(a)(1)(i) provides that no person may “excavate; drain; fill; place trash, garbage, sewage, highway runoff, drainage ditch effluents, earth, rock, borrow, gravel, sand, clay, peat, or other materials or effluents upon; divert water flows into or out of; dike; dam; divert; change; add to or take from or otherwise alter the character of any freshwater wetland, buffer, or floodplain as defined in § 2-1-20 without first obtaining the approval of the director of the department of environmental management,” and § 2-1-20.2 gives the same director the power to designate what counts as a wetland, buffer or floodplain. This matters at the point of sale because § 5-20.8-2(b)(3)(xxviii) requires the seller to disclose any such determination made by the department on all or part of the land. The Coastal Resources Management Council governs the shoreline and tidal waters under chapter 46-23, not inland freshwater wetlands, and a local planning board's approvals do not displace the director's.

How long is a Rhode Island smoke detector and carbon monoxide detector certificate valid?

• a.For the period the issuing authority sets, and at most one hundred twenty days
• b.For the period the issuing authority sets, and at least one hundred twenty days✓
• c.For thirty days from issuance, whatever period the issuing authority specifies
• d.For one year from issuance, whatever period the issuing authority specifies

R.I. Gen. Laws § 23-28.1-10 provides that “notwithstanding any law, regulation or practice to the contrary, smoke detector and carbon monoxide detector certificates issued by any state or local authority shall be valid for such period as the issuing authority may specify, but in no event for less than a period of one hundred twenty (120) days from the date of issuance.” The hundred and twenty days is therefore a floor rather than a ceiling, which is what makes the second option the trap. This is a practical closing point: a certificate obtained early in a transaction will not expire before a normal closing date. The Fire Safety Code itself is chapters 23-28.1 through 23-28.39 of title 23 by the terms of § 23-28.1-1, and § 23-28.1-6(a) applies its regulations to all structures unless a structure is specifically exempted.

The Rhode Island seller disclosure form addresses the sewage system. What does it tell a buyer served by an on-site system?

• a.That the state will pay to replace any on-site system found to be failing
• b.That the buyer must connect the property to a public sewer before closing
• c.That an on-site system may not serve a property that is being conveyed
• d.That a ten-day period is allowed to inspect the system for a cesspool✓

The Sewage System item of the disclosure form, printed word for word in R.I. Gen. Laws § 5-20.8-2(b)(3)(xvii), notifies purchasers that many Rhode Island properties are still served by cesspools, that cesspools are “a substandard and inadequate means of sewage treatment and disposal,” and that “pursuant to § 5-20.8-13, potential purchasers shall be permitted a ten-day (10) period to conduct an inspection of a property's sewage system to determine if a cesspool exists, and if so, whether it will be subject to the phase-out requirements as established in chapter 19.15 of title 23.” The form also requires the assessment, annual fees, type, cesspool or septic location, date last pumped, maintenance history and defects. The state funds no replacements, an on-site system is no bar to a conveyance, and nothing requires a sewer connection before closing.

A Rhode Island house served by a cesspool is sold. What does the Cesspool Act of 2007 require?

• a.Removal and replacement, or a sewer connection, within twelve months of sale✓
• b.Removal and replacement only where an inspection shows the cesspool has failed
• c.Removal and replacement, or a sewer connection, within thirty-six months of sale
• d.Removal and replacement only where the property lies inside a coastal zone

R.I. Gen. Laws § 23-19.15-12(a) provides that “any cesspool found to be serving a building or use subject to sale or transfer shall be removed and replaced with an OWTS or the building served by the cesspool shall be connected to a public sewer system within twelve (12) months of the date of sale or transfer.” Subsection (b) adds that where the manner of wastewater disposal is unknown, a system inspector must inspect before the sale to determine whether a cesspool is present, and subsection (c) carries across the ten-day buyer inspection period of § 5-20.8-13. The transfer trigger is the sale itself, so no finding of failure is needed; proximity to tidal waters and public drinking supplies drives the separate inspection duty in § 23-19.15-5, not the duty at transfer.

How much must be withheld from the total payment made to a nonresident individual selling Rhode Island real estate?

• a.Seven percent
• b.Three percent
• c.Six percent✓
• d.Ten percent

R.I. Gen. Laws § 44-30-71.3(a) requires the buyer to “deduct and withhold on the payments an amount equal to six percent (6%) of the total payment to nonresident individuals, estates, partnerships, or trusts, and seven percent (7%) of the total payment to nonresident corporations.” Seven percent is therefore the corporate rate and the classic distractor here. Subsection (b) defines “total payment” as the net proceeds of the sale actually paid to the nonresident seller, including the fair market value of any property transferred to the seller, so the withholding is not computed on the gross sale price. Under subsection (d) the buyer must remit the money to the tax administrator within three banking days of the closing, and under subsection (e) the seller is credited with having paid that amount for the taxable year.

Who must withhold and remit the tax when a nonresident sells Rhode Island real estate?

• a.The listing broker, who deducts it from the seller's net proceeds
• b.The closing attorney, who holds it back from the settlement figures
• c.The buyer, who is liable for the amount required to be withheld✓
• d.The seller's lender, which reports it on the mortgage payoff statement

R.I. Gen. Laws § 44-30-71.3(a) places the duty squarely on the purchaser — “the buyer shall deduct and withhold on the payments” — and § 44-30-71.3(c) makes every buyer subject to the section “liable for all amounts withheld, or required to be withheld,” with the amount constituting a lien on the owner's property until it is remitted. The statute then excludes the transaction professionals by name: § 44-30-71.3(f) provides that “the closing attorney, lending institution, and real estate agent or broker in any transaction governed by the provisions of this section is not subject to the withholding, deduction, or payment provisions of this section.” That exclusion is exactly why a broker must recognize the requirement without assuming responsibility for it. The lien lapses ten years after the sale under § 44-30-71.3(h).

Which residential hazard does Rhode Island regulate through state disclosure duties layered on top of federal law?

• a.Lead-based paint and environmental lead hazards in older housing✓
• b.Radon accumulation, addressed only in commercial office buildings
• c.Termite infestation, addressed through a mandatory statewide bond
• d.Flat roof failure, addressed through a mandatory workmanship warranty

Rhode Island's older housing stock has made lead the hazard the state regulates most aggressively. 216-RICR-50-15-3 § 3.5.1 states that its requirements are “in addition to, not in lieu of, Federal requirements for disclosure of lead-based paint and/or environmental lead hazards in housing,” and § 3.5.3(A) requires the seller or lessor, before the buyer is obligated, to supply the EPA pamphlet with its Rhode Island insert, a lead warning statement, a copy of any current lead certificate and a chronological list of all lead inspection reports. Under § 3.5.5 each agent must ensure the seller performs those steps, and the Department of Health reports a non-complying agent to the Department of Business Regulation for enforcement. Termite protection is handled by private contract, radon in residential property is addressed only as a disclosure form item under § 5-20.8-2(b)(3)(xii), and roof warranties are ordinary product guarantees.

What must a Rhode Island seller of a pre-1978 one-to-four-unit home allow before the buyer becomes obligated?

• a.A ten-day period to inspect for lead-based paint and lead hazards✓
• b.A thirty-day period to inspect for lead-based paint and lead hazards
• c.A five-day period to inspect for lead-based paint and lead hazards
• d.No inspection period, because the federal pamphlet takes its place

216-RICR-50-15-3 § 3.5.4(A)(1) requires that “sellers of any one (1) to four (4) unit residential dwelling built prior to 1978 shall allow the purchaser a ten (10) day period in which to have an inspection for the presence of lead-based paint and/or environmental lead hazards prior to the purchaser becoming obligated under any Contract for the Purchase and Sale of Residential Real Property.” R.I. Gen. Laws § 5-20.8-11(a) writes the same ten-day period into the purchase and sale agreement itself, and reaches one-to-four-family housing built before 2011. The parties may agree in writing to a different period, and a mortgagee selling at a foreclosure auction is exempt. Omitting the clause creates no defect in title but exposes the seller or agent to a civil penalty of one hundred to five hundred dollars and lets the buyer void the agreement in writing before title passes.

What does Rhode Island generally require the seller of residential real estate to give the buyer?

• a.Nothing at all, because Rhode Island follows a rule of pure caveat emptor
• b.A copy of the listing brokerage's bank statements for the escrow account
• c.A written disclosure of the deficient conditions the seller knows of✓
• d.A guarantee that the property will hold its value for a stated period

R.I. Gen. Laws § 5-20.8-2(a) requires the seller to deliver a written disclosure to the buyer and to each agent, which “shall state all deficient conditions of which the seller has actual knowledge,” and § 5-20.8-1(5) defines deficient conditions to include any land restriction, defect, malfunction, breakage or unsound condition of which the seller has knowledge. That statutory duty is what defeats any pure caveat emptor reading. The form itself is not a warranty: the notice printed at the top of it by § 5-20.8-2(b)(1) tells the buyer this “is not a warranty by the seller that no other defective conditions exist” and advises the buyer to conduct independent inspections, and § 5-20.8-2(b)(1) adds that nothing imposes an affirmative duty on the seller to inspect. Escrow bank statements belong to the broker's records under § 5-20.5-26 and disclose nothing about the house.

When must the Rhode Island real estate sales disclosure reach the buyer?

• a.At the closing, when the deed and settlement statement are delivered
• b.As soon as practicable, and before any agreement to transfer is signed✓
• c.Within thirty days after the closing, along with the recorded deed
• d.Only where the buyer has asked for the disclosure form in writing

R.I. Gen. Laws § 5-20.8-2(a) opens with the timing rule: “as soon as practicable, but in any event no later than prior to signing any agreement to transfer real estate, the seller of the real estate shall deliver a written disclosure to the buyer and to each agent.” The same subsection puts the agent under a hard stop — “the agent shall not communicate the offer of the buyer until the buyer has received a copy of the written disclosure and signed a written receipt” — and requires the seller or agent to sign and date a written account of any refusal to sign the receipt. Delivery at or after closing hands the information over once the buyer is committed, and the obligation belongs to the seller whether or not the buyer thinks to ask. Failure does not void the agreement or cloud title but carries a civil penalty of up to one thousand dollars per occurrence under § 5-20.8-5(b).

What must a Rhode Island unit owner furnish a buyer before signing a contract to resell a condominium unit?

• a.The declaration and bylaws only, since the association keeps the remainder
• b.A public offering statement prepared and signed by the project's declarant
• c.Nothing beyond the seller disclosure form the state already requires
• d.The declaration, bylaws, rules, and an association resale certificate✓

R.I. Gen. Laws § 34-36.1-4.09(a) requires a unit owner reselling a unit to furnish the purchaser, before execution of any contract for sale or otherwise before conveyance, “a copy of the declaration (other than the plats and plans), the bylaws, the rules or regulations of the association, and a certificate” covering twelve listed items — among them the monthly common expense assessment, unpaid assessments, anticipated capital expenditures for the current and next two fiscal years, reserves, the current operating budget, unsatisfied judgments and pending suits, and insurance. The association must supply the certificate within ten days of the owner's request under § 34-36.1-4.09(b)(1). A public offering statement is the declarant's document for a first sale, and under § 34-36.1-4.08(a) a purchaser who receives it later than ten days before signing may cancel within ten days of first receiving it. Note that the Pearson VUE outline cites “RIGL 34-36-1.1,” a section that does not exist; chapter 34-36.1 is the operative condominium law.

What relationship does Rhode Island law presume a licensee has with a consumer?

• a.Subagent of the seller, under this state's common law of agency by conduct
• b.Designated client representative, unless the consumer declines it in writing
• c.Dual facilitator, unless the principal broker designates a different licensee
• d.Transaction facilitator, unless informed written consent establishes otherwise✓

R.I. Gen. Laws § 5-20.6-3(a) provides that “it shall be presumed that all licensees in a real estate transaction are transaction facilitators unless the licensee obtains the informed, written consent of a buyer, seller, tenant, or landlord with an executed mandatory relationship disclosure to represent that person as a designated client representative.” Subsection (b) is the reason the common-law answer fails: the chapter is “expressly intended to abrogate the common law of agency,” no agency representation is assumed, and none is created by implication. Section 5-20.6-11 adds that paying or promising to pay a licensee does not create an agency relationship either. Dual facilitation is never the default; under § 5-20.6-6(c) it requires the informed written consent of the principal broker and of all parties before an offer is presented.

By when must a Rhode Island licensee execute the mandatory relationship disclosure to represent a client?

• a.No later than the closing at which title passes from seller to buyer
• b.No later than preparing a sales agreement, offer to purchase, or lease✓
• c.No later than ten days after the purchase and sale agreement is signed
• d.Only where the client asks for the relationship to be put into writing

R.I. Gen. Laws § 5-20.6-8(d) states that “in all instances, a licensee's relationship with a buyer, seller, tenant, or landlord as a designated client representative must be established, and the mandatory relationship disclosure executed, no later than the preparation of a sales agreement, offer to purchase, or lease.” An earlier trigger can bite first: § 5-20.6-8(b) requires the licensee to hand over the disclosure and obtain a signed acknowledgment of receipt “prior to the disclosure of any confidential information,” and to sign and date a written declaration of the facts if the consumer refuses to sign. Section 5-20.6-9(a) forbids acting as a designated client representative until § 5-20.6-8 has been complied with. Failing to give the disclosure is a violation of license law under § 5-20.6-13(a), though § 5-20.6-13(b) provides it neither voids the sales agreement nor creates a defect in title.

What does a Rhode Island transaction facilitator owe a customer?

• a.Ministerial acts done honestly and competently, and an accounting for funds✓
• b.A duty to negotiate the most favorable price on the customer's behalf
• c.The full fiduciary duties a designated client representative owes a client
• d.No duty whatever, because a customer is not a client of the brokerage

R.I. Gen. Laws § 5-20.6-4(a) lists the duties a transaction facilitator owes a customer: to perform agreed-upon ministerial acts timely and competently; to perform them “with honesty, good faith, reasonable skill, and care”; to account properly for money or property placed in the care and responsibility of the principal broker; and to protect confidential information when assisting customers as a dual facilitator. Subsection (b) then draws the line: “a licensee acting as a transaction facilitator does not owe any fiduciary duties to a customer except those duties specified in subsection (a).” Promoting a party's best interest and protecting confidential information during and after the relationship are duties of a designated client representative under § 5-20.6-5(a), which is a different and higher standard.