Rhode Island Real Estate Salesperson Exam — All Questions

The principle of contribution states that the value of a component or improvement is measured by:

• a.The raw number of square feet of floor area or land area that the improvement happens to occupy
• b.The owner's personal emotional attachment to and sentimental feelings about that improvement
• c.Its original construction or installation cost in every case, dollar for dollar, with no exception
• d.How much it adds to the overall value of the property, not its cost✓

Under contribution, an improvement is worth the amount it adds to the whole property's market value, which may be more or less than its cost. This principle explains why some renovations do not fully return their expense, a key point in over-improvement analysis.

Under Internal Revenue Code Section 121, a qualifying homeowner may generally EXCLUDE from taxable capital gain:

• a.Up to $250,000 of gain if single, or $500,000 if married filing jointly✓
• b.Up to a full one million dollars of gain on any property at all, at any time and any frequency
• c.All gain on any and every investment or rental property the taxpayer happens to own and sell
• d.Absolutely nothing, because gain on the sale of a home is always fully and entirely taxable

Section 121 lets homeowners who owned and used the home as their principal residence for at least two of the prior five years exclude up to $250,000 of gain (single) or $500,000 (married filing jointly). It applies to a primary residence, not to investment property.

Depreciation recapture on the sale of investment real estate means that:

• a.All of the depreciation deductions previously claimed are simply refunded to the investor in cash
• b.The investor is legally required to physically restore and rebuild the depreciated building itself
• c.Gain from prior depreciation may be taxed, often at a special rate✓
• d.No income tax is ever owed at all on the sale of a property that has previously been depreciated

When depreciated property is sold at a gain, the portion of gain due to depreciation deductions is 'recaptured' and taxed under special rules, reflecting the earlier tax benefit. It is a tax concept, not a requirement to rebuild, and it increases, not eliminates, tax on sale.

Which appraisal approach is generally MOST reliable for a special-purpose property, such as a church or public school, that rarely sells and earns no market income?

• a.The sales comparison approach, which depends on recent sales of similar comparable properties
• b.The income approach, which converts a property's market rental income into an indicated value
• c.The gross rent multiplier method, which relies on typical market rents that these lack entirely
• d.The cost approach✓

Special-purpose properties have few or no comparable sales and generate no market rent, so the cost approach (replacement cost new, less depreciation, plus land) is typically most reliable. Sales comparison lacks comparables and the income/GRM methods need market income these properties do not produce.

The four characteristics an item must have to possess value in the market, often remembered as DUST, are:

• a.Debt, Utility, Supply, and Taxes, a mix of unrelated financing and cost terms rather than value
• b.Demand, Utility, Scarcity, and Transferability✓
• c.Depreciation, Use, Sale, and Title, which describe stages of ownership rather than value itself
• d.Demand, Ownership, Scarcity, and Time, which swaps in two terms that are not part of the concept

For something to have market value it must have Demand (buyers who want it), Utility (usefulness), Scarcity (limited supply), and Transferability (the ability to convey it). The DUST acronym captures these four essentials of value.

Real estate salespersons in Rhode Island are licensed and regulated by:

• a.The local city or town clerk
• b.The Rhode Island Real Estate Commission, within the Department of Business Regulation✓
• c.The Rhode Island Secretary of State
• d.The Rhode Island Association of Realtors

The Rhode Island Real Estate Commission, part of the Department of Business Regulation (DBR), licenses and disciplines real estate brokers and salespersons under R.I. General Laws Chapter 5-20.5. A trade association is a private membership group and does not issue licenses.

In Rhode Island, a licensed salesperson may conduct real estate brokerage activity:

• a.Independently, once the license is issued
• b.Only after also obtaining a broker license
• c.For any broker who agrees to pay a commission
• d.Only under the supervision of a sponsoring licensed broker✓

A Rhode Island salesperson may act only under the supervision of a sponsoring licensed broker and may not operate independently. The license is associated with one broker at a time, and that broker is responsible for the salesperson's real estate conduct.

A Rhode Island salesperson may lawfully accept a commission for a completed sale from:

• a.The buyer directly at closing
• b.The seller directly upon listing
• c.The broker who sponsors the salesperson✓
• d.The cooperating broker on the other side

A Rhode Island salesperson may be paid a commission only by the sponsoring broker, not directly by a buyer, seller, or another broker. Compensation flows through the sponsoring broker, who supervises the salesperson and is accountable for the transaction.

Under Rhode Island rules, the Mandatory Real Estate Relationship Disclosure should be provided to a consumer:

• a.Only after the purchase and sale agreement is signed
• b.Within 30 days after an offer is accepted
• c.At the first substantive contact, before confidential information is exchanged✓
• d.At the closing table

Rhode Island requires licensees to provide the Mandatory Real Estate Relationship Disclosure at the first substantive contact, before confidential information is exchanged. The disclosure explains the available relationships so the consumer can decide how to work with the licensee.

In Rhode Island, dual agency, in which one licensee represents both the buyer and the seller in the same transaction, is:

• a.Allowed without any disclosure to the parties
• b.Permitted only with the informed written consent of both parties✓
• c.Automatically created whenever one firm has both listings
• d.Prohibited in all circumstances

In Rhode Island, dual agency is permitted only with the informed written consent of both the buyer and the seller. The dual agent must treat both parties honestly and may not disclose one party's confidential information to the other.

Under Rhode Island's Real Estate Sales Disclosure law, the seller of residential real estate must generally:

• a.Give the buyer a completed disclosure form describing the known condition of the property✓
• b.Provide the buyer a title insurance policy
• c.Obtain a professional inspection before listing
• d.Guarantee the property is free of all defects

Rhode Island's Real Estate Sales Disclosure law (Chapter 5-20.8) requires most sellers of residential real estate to provide the buyer a completed disclosure form describing the known condition of the property. The seller is not required to inspect or to warrant the property but must answer honestly about known conditions.

Earnest money a Rhode Island salesperson receives from a buyer must be:

• a.Forwarded to the Real Estate Commission for safekeeping
• b.Paid directly to the seller when the offer is written
• c.Held by the salesperson in a personal account until closing
• d.Delivered promptly to the sponsoring broker for deposit in the broker's escrow account✓

Client funds such as earnest money must be handled through the broker's escrow (trust) account and kept separate from the broker's own funds. A salesperson who receives money must promptly deliver it to the sponsoring broker. Commingling or converting client money is a serious violation of Rhode Island license law.

To qualify for a Rhode Island salesperson license, an applicant must first complete:

• a.A Commission-approved 45-hour pre-license course✓
• b.A 90-hour broker course
• c.A four-year college degree in real estate
• d.An apprenticeship of two years under a broker

Rhode Island requires an applicant to complete a Commission-approved 45-hour pre-license course before taking the salesperson licensing examination. After passing the exam and meeting eligibility requirements, the salesperson must associate with a sponsoring broker to activate the license.

A Rhode Island salesperson wants to upgrade to a broker's license. Beyond passing the examination, the applicant must prove:

• a.Five years of continuous licensure and 45 additional classroom hours
• b.One year of licensure and a bachelor's degree in business
• c.Two years full time as a salesperson and 90 classroom hours✓
• d.Three years of licensure and sponsorship by two brokers

The broker applicant must show full-time service as a real estate salesperson for at least the two years immediately before the application and completion of at least 90 hours of approved classroom study at a school defined in Section 5-20.5-19, or an equivalent college correspondence course. Cite: R.I. Gen. Laws Section 5-20.5-4(b).

A Rhode Island broker application must be accompanied by the names of at least three people who will vouch for the applicant. Those people must be:

• a.Rhode Island residents who have known the applicant three years and are not related to the applicant✓
• b.Licensed Rhode Island brokers in good standing
• c.Members of the Rhode Island Real Estate Commission
• d.Former clients of the applicant

The statute requires three Rhode Island residents who have known the applicant for three years, are not related to the applicant, will attest to the applicant's reputation for honesty and trustworthiness, and will recommend that the license be granted. Cite: R.I. Gen. Laws Section 5-20.5-3(c).

The Department of Business Regulation sets the minimum errors and omissions coverage a Rhode Island licensee must carry. For an individual licensee the policy must be at least:

• a.$25,000 per claim and $100,000 aggregate
• b.$100,000 per claim and $300,000 aggregate
• c.$300,000 per claim and $1,000,000 aggregate
• d.$50,000 per claim and $150,000 aggregate✓

The regulation fixes the individual minimum at $50,000 for each claim and $150,000 in the aggregate. A principal broker's blanket policy must either multiply those figures by the number of affiliated licensees or carry at least $300,000 per claim with a $1,000,000 annual aggregate. Cite: 230-RICR-30-20-2.28(A)(1) and (2).

An attorney admitted by the Rhode Island Supreme Court applies for a real estate broker's license. On application and payment of the fee, that attorney:

• a.Must still pass the state portion of the examination
• b.Is granted the license without examination✓
• c.Must complete the 90-hour classroom requirement first
• d.Must serve two years under a sponsoring broker

When an attorney at law licensed by the state supreme court wants a broker's or salesperson's license, the license is granted without examination on application and payment of the applicable fee. Cite: R.I. Gen. Laws Section 5-20.5-4(d).

A Rhode Island licensee renewing a license must show 24 clock hours of approved courses from the preceding two years. Of those 24 hours:

• a.At least nine must be core subjects, and at least three of the nine must be fair housing✓
• b.At least six must be core subjects, with no fair housing minimum
• c.All 24 must come from the core subject list
• d.At least twelve must be core subjects, and six of those fair housing

The rule requires 24 clock hours every two years, at least nine from the listed core subject areas, and at least three of those nine in federal, Rhode Island and local fair housing law and the treatment of protected classes under Chapter 34-37. The remaining fifteen hours may be any department-approved real estate course. Cite: 230-RICR-30-20-2.30(A) and (B).

Which Rhode Island licensee is exempt from continuing education as a condition of renewal?

• a.A licensee over the age of sixty-five
• b.A licensee who renews on inactive status
• c.An attorney in good standing with the Rhode Island Supreme Court who was licensed under Section 5-20.5-4(d)✓
• d.A licensee who completed 45 hours of pre-licensing within the cycle

Two exemptions exist: licensees holding a valid license originally issued before December 12, 1984, and, effective January 1, 2022, attorneys in good standing with the Rhode Island Supreme Court who hold a real estate license granted under Section 5-20.5-4(d). Age and inactive status are not exemptions. Cite: 230-RICR-30-20-2.30(D); R.I. Gen. Laws Section 5-20.5-6(d).

A Rhode Island salesperson completed the 45 required classroom hours two years ago and now applies for a broker's license. Those 45 hours:

• a.Count in full toward the 90 hours required of a broker
• b.Count toward 45 of the 90 hours if taken within four years
• c.Count only if the same school offers the broker course
• d.May not be used toward the 90 hours required of a broker✓

The regulation states plainly that the 45 classroom hours used to qualify for a salesperson's license shall at no time be used to qualify for the 90 hours required for a broker's license. Broker classroom hours older than four years are also disregarded. Cite: 230-RICR-30-20-2.7(C).

A Rhode Island salesperson's license was first issued in June 2023. Under the department's rule that license renews:

• a.On May 1 of each even-numbered year
• b.Every two years on the anniversary of the issue date✓
• c.Every three years on the anniversary of the licensee's birthday
• d.Annually on July 1

Licenses issued before January 1, 2020 renew every two years on May 1 of each even-numbered year. Licenses issued after that date renew every two years on the anniversary of the date the license was issued. Cite: 230-RICR-30-20-2.9(B) and (C).

A Rhode Island applicant fails one section of the salesperson examination. The applicant may retake just that section:

• a.Within one year; after that the entire examination must be retaken✓
• b.Within 90 days; after that the entire examination must be retaken and passed
• c.At any time, with no deadline
• d.Only twice, and then only with the department's written permission

There is a one-year time limit for reexamination on a failed section. If the year expires, the applicant must retake the entire examination. Cite: 230-RICR-30-20-2.6(B).

A Rhode Island broker's license has been expired for fourteen months. To be licensed again the former licensee must:

• a.Pay the renewal fee and a $100 late fee
• b.Request reinstatement and show current continuing education
• c.File a new application and retake the examination✓
• d.Apply to the Real Estate Commission for a hardship waiver

At no time may a license be renewed without examination if it has been expired beyond a period of one year, and the department's rule requires a new application and a new examination in that case. Cite: R.I. Gen. Laws Section 5-20.5-11(b); 230-RICR-30-20-2.6(C).

The minimum age for a Rhode Island real estate salesperson license applicant is:

• a.Twenty-one
• b.Eighteen✓
• c.Nineteen
• d.Twenty-five

A salesperson applicant must be at least eighteen years of age and a citizen or legal resident of the United States. A broker applicant must have reached the legal age of majority. Cite: R.I. Gen. Laws Section 5-20.5-3(c).

The Rhode Island Real Estate Commission, created within the Department of Business Regulation, consists of:

• a.Five members, all licensed brokers, appointed by the director
• b.Seven members elected by the state's licensees
• c.Three members appointed by the general treasurer
• d.Nine gubernatorial appointees, at least one from each county, plus two ex officio members✓

The governor appoints nine members, at least one from each county, of whom three are currently licensed brokers with five years in the state and four are members of the general public. The attorney general or a designee and the department director or a designee sit ex officio with full voting powers. Cite: R.I. Gen. Laws Section 5-20.5-12(a)(1).

Two Rhode Island buyers each hold a judgment against the same licensee for deceit. The real estate recovery account's total liability for that one licensee is:

• a.$50,000✓
• b.$50,000 each
• c.$100,000
• d.$200,000

The account may pay a claimant up to $50,000 in damages, but the liability of the account may not exceed $50,000 for any one licensee no matter how many claimants there are. Claims are paid in the order the judgments were awarded, the earliest first. Cite: R.I. Gen. Laws Section 5-20.5-5(a)(1) and (h).

The Rhode Island recovery account pays a judgment against a licensee. On the court's order authorizing payment, the licensee's license is:

• a.Suspended for one year, then restored automatically
• b.Automatically revoked, and no new license issues until the account is repaid in full plus twelve percent interest✓
• c.Placed on probation pending a department hearing
• d.Unaffected, since the account exists to protect the public

Payment from the real estate recovery account automatically revokes the broker's or salesperson's license on issuance of the court order. The person is ineligible for a new license until the amount paid is repaid in full plus interest at twelve percent a year, and a bankruptcy discharge does not relieve that obligation. Cite: R.I. Gen. Laws Section 5-20.5-5(c)(5).

A Rhode Island consumer plans to sue a salesperson for fraud and may later seek recovery account money. The consumer must:

• a.Obtain the department's written consent before filing suit
• b.File the suit in the county where the licensee resides
• c.Start the action within two years of the cause of action accruing and notify the department in writing at that time✓
• d.Exhaust an administrative hearing before the commission first

No action for a judgment that may later lead to collection from the account may be started later than two years from the accrual of the cause of action, and the aggrieved person must notify the Department of Business Regulation in writing when the action is commenced. Cite: R.I. Gen. Laws Section 5-20.5-5(c)(1).

If the Rhode Island real estate recovery account balance is below $200,000 on December 31, then during the following calendar year:

• a.Only brokers pay an extra $25 at renewal
• b.Renewals are suspended until the account balance is restored to $200,000
• c.The general treasurer advances the shortfall
• d.Every broker and every salesperson pays an extra $25 at renewal✓

The statute triggers on the December 31 balance: in the next calendar year every real estate broker and every real estate salesperson pays an additional $25 with the renewal fee for deposit in the recovery account. Cite: R.I. Gen. Laws Section 5-20.5-5(b).

Besides suspending or revoking a license, the Rhode Island director may levy an administrative penalty for a violation of Chapter 5-20.5 of up to:

• a.$2,000✓
• b.$500
• c.$5,000
• d.$10,000

The director is authorized to levy an administrative penalty not exceeding $2,000 for any violation of the section or of the department's regulations. Cite: R.I. Gen. Laws Section 5-20.5-14(b).

An individual sells houses in Rhode Island for commissions without ever holding a license. On a first conviction, the penalty is:

• a.A civil fine of $2,000, with no possibility of imprisonment
• b.A $100 to $500 fine, up to a year in jail, or both✓
• c.A fine of $1,000 to $2,000 and mandatory restitution to the buyer
• d.A felony conviction and a fine of not less than $5,000

Acting as a broker or salesperson without first obtaining a license is a misdemeanor punishable by a fine of not less than $100 nor more than $500, or imprisonment not exceeding one year, or both. A corporation pays $1,000 to $2,000, and second offences carry higher ranges. Cite: R.I. Gen. Laws Section 5-20.5-17(a).

Beyond the criminal penalty, a person who collected a commission through a violation of Rhode Island's license law is liable to an aggrieved person for:

• a.The amount of the commission actually received, and nothing beyond that
• b.Double the commission received, as liquidated damages
• c.Not less than the sum received and not more than three times that sum✓
• d.The aggrieved person's attorney fees only

The statute creates a separate civil penalty of not less than the amount of money received and not more than three times that sum, as the court determines, recoverable by any aggrieved person in a court of competent jurisdiction. Cite: R.I. Gen. Laws Section 5-20.5-17(b).

An unlicensed investor wants to buy a twenty percent stake in a Rhode Island real estate brokerage firm and take no part in its operations. Under Chapter 5-20.5 the investor:

• a.May do so if the principal broker discloses the stake to the department
• b.May do so because passive ownership is not licensed activity
• c.May do so only if the stake stays under twenty-five percent
• d.May not hold an ownership interest without a broker's license✓

No person, firm or corporation may have an ownership interest in a real estate brokerage firm, or participate in its operation, unless it holds a valid real estate broker's license issued under the chapter. Cite: R.I. Gen. Laws Section 5-20.5-27.

A resident Rhode Island broker must maintain a fixed office in the state. That requirement carries with it the duty to:

• a.Keep all business records relating to transactions and office management on the premises✓
• b.Staff the office during posted business hours
• c.Register the office address with the city or town clerk
• d.Maintain a separate office in each county where the broker lists property

The statute requires a fixed in-state office, requires all business records relating to real estate transactions and to the management of that office to be kept on the premises, and requires the original licenses of the broker and each affiliated salesperson to be prominently displayed there. Cite: R.I. Gen. Laws Section 5-20.5-7.

A Rhode Island salesperson leaves one brokerage for another. The employing broker and the salesperson must each notify the director in writing within:

• a.Five business days
• b.Ten days✓
• c.Thirty days
• d.Sixty days

Failure of the employing broker to notify the director in writing within ten days of the termination of a salesperson's employment, or failure of the salesperson to notify the director within ten days of a change in broker affiliation, is itself a ground for discipline. Cite: R.I. Gen. Laws Section 5-20.5-14(a)(33).

A Rhode Island licensee meets a prospective buyer and never discusses representation. Under Chapter 5-20.6 that licensee is:

• a.A designated client representative for the buyer
• b.A dual facilitator by operation of law
• c.Presumed to be a transaction facilitator✓
• d.A subagent of the listing brokerage

It is presumed that all licensees in a real estate transaction are transaction facilitators unless the licensee obtains the informed, written consent of the consumer with an executed mandatory relationship disclosure to represent that person as a designated client representative. Cite: R.I. Gen. Laws Section 5-20.6-3(a).

A Rhode Island seller argues that the licensee became her agent because the licensee had long acted like one. Chapter 5-20.6 answers that argument by providing that:

• a.Conduct may create an implied agency where the seller reasonably relied on it
• b.A court decides agency case by case on the facts
• c.Agency arises when compensation is promised
• d.The common law of agency is abrogated and no agency arises by implication✓

The chapter is expressly intended to abrogate the common law of agency. No type of agency representation may be assumed by a brokerage, principal broker, licensee, buyer, seller, tenant or landlord, nor may it be created by implication. Cite: R.I. Gen. Laws Section 5-20.6-3(b).

At the latest, a Rhode Island licensee's relationship as a designated client representative must be established and the mandatory relationship disclosure executed:

• a.No later than the preparation of a sales agreement, offer, or lease✓
• b.No later than the closing of the transaction at the settlement table
• c.Within three days after the licensee first shows the buyer a property
• d.Before the licensee advertises the property in the multiple listing service

In all instances the designated client representative relationship must be established, and the mandatory relationship disclosure executed, no later than the preparation of a sales agreement, offer to purchase, or lease. Cite: R.I. Gen. Laws Section 5-20.6-8(d).

A Rhode Island buyer reads the mandatory relationship disclosure and refuses to sign the acknowledgement of receipt. The licensee must:

• a.Decline to work with the buyer until the acknowledgement is signed
• b.Set forth, sign and date a written declaration of the facts of the refusal✓
• c.Mail a copy of the disclosure to the buyer by certified mail, return receipt requested
• d.Report the refusal to the Real Estate Commission within ten days

The licensee provides the disclosure and obtains a signed acknowledgement of receipt before any confidential information is disclosed. If the consumer refuses to sign, the licensee sets forth, signs and dates a written declaration of the facts of the refusal. Cite: R.I. Gen. Laws Section 5-20.6-8(b).

One Rhode Island licensee wants to assist both a buyer client and a seller client in the same transaction as a neutral dual facilitator. Written consent is needed from:

• a.Only the two clients, at any point before the closing date
• b.Only the principal broker, at any time before the closing
• c.The principal broker and all parties, before an offer✓
• d.The Department of Business Regulation, on a form it provides

A licensee may act as a neutral dual facilitator only after obtaining the informed, written consent of the licensee's principal broker and all parties involved, and that consent must be in hand before the offer is presented to the seller client or landlord client. Cite: R.I. Gen. Laws Section 5-20.6-6(c).

A Rhode Island licensee prepared a comparative market analysis for a seller client, then became a dual facilitator when her buyer client made an offer. She may:

• a.Give the analysis to the buyer, because a dual facilitator is neutral between them
• b.Prepare a fresh analysis for the buyer at the buyer's request
• c.Prepare a fresh analysis for whichever party asks first
• d.Give the existing analysis to the buyer only with the seller's prior consent✓

A dual facilitator may release a previously prepared comparative market analysis to the other party only with the prior consent of the party for whom it was prepared, and may not prepare a new analysis for either party once the dual facilitation situation arises, because that could damage one side's bargaining position. Cite: R.I. Gen. Laws Section 5-20.6-6(c)(4).

A Rhode Island principal broker appoints one affiliated licensee for the seller and another for the buyer in the same sale. The principal broker then acts as:

• a.A transaction coordinator, protecting all parties' confidential information and accounting for funds✓
• b.A dual facilitator for both clients
• c.A designated client representative for the seller
• d.A subagent of the buyer's representative

When designated client representatives are appointed on both sides of one transaction, the principal broker or the broker's designee acts in the neutral capacity of transaction coordinator, protects the confidential information of all parties, and properly accounts for funds. Cite: R.I. Gen. Laws Sections 5-20.6-5(d) and 5-20.6-8(c)(8).

A Rhode Island seller agrees to pay part of the buyer's licensee's fee at closing. That payment:

• a.Makes the buyer's licensee a subagent of the seller
• b.Does not by itself create a relationship with the payer✓
• c.Converts the buyer's licensee into a dual facilitator
• d.Must be approved in advance by the Real Estate Commission

The chapter states that the payment or promise of payment of compensation to a licensee does not create an agency relationship between the licensee and a buyer, seller, tenant or landlord. The relationship comes from the executed mandatory relationship disclosure, not from who pays. Cite: R.I. Gen. Laws Section 5-20.6-11.

A Rhode Island licensee never gave the buyer the mandatory relationship disclosure. The sale closed anyway. The omission:

• a.Voids the purchase and sale agreement between the parties
• b.Creates a defect in the buyer's title to the property
• c.May be disciplined, but does not affect the agreement✓
• d.Entitles the buyer to treble damages under the statute

Each violation of Chapter 5-20.6 is a violation of the license law and may subject the licensee to disciplinary action, but the failure to provide the mandatory relationship disclosure does not void the sales agreement nor create any defect in title. Cite: R.I. Gen. Laws Section 5-20.6-13.

A Rhode Island buyer signs an offer and the listing agent wants to deliver it to the seller, who has not yet completed the seller disclosure. The agent:

• a.May deliver the offer and obtain the disclosure before closing
• b.May deliver the offer if the buyer waives the disclosure orally
• c.May deliver the offer, since the duty is the seller's alone
• d.May not communicate the offer until the buyer has received the written disclosure and signed a receipt✓

The seller must deliver the written disclosure no later than before signing any agreement to transfer, and the agent shall not communicate the buyer's offer until the buyer has received a copy of the written disclosure and signed a written receipt for it. If the buyer refuses to sign, the seller or agent immediately signs and dates a written account of the refusal. Cite: R.I. Gen. Laws Section 5-20.8-2(a).

A Rhode Island seller understates the age of the roof on the disclosure form and the buyer sues the listing agent. Under Chapter 5-20.8 the agent is:

• a.Not liable for the accuracy of the seller's representations✓
• b.Strictly liable for everything printed on the form
• c.Liable only if the agent also signed the disclosure form as a witness
• d.Liable for half the buyer's repair cost

The chapter says the agent is not liable for the accuracy or thoroughness of representations the seller makes in the written disclosure, nor for deficient conditions the seller did not disclose to the agent. Cite: R.I. Gen. Laws Sections 5-20.8-2(a) and 5-20.8-9.

A Rhode Island buyer asks whether anyone died in the house. Under the psychologically impacted property statute, the fact that the property was suspected of being the site of a homicide is:

• a.A material fact that must be disclosed in writing
• b.Not a material fact requiring disclosure✓
• c.Disclosable only if the buyer asks in writing
• d.A condition the seller must list on the disclosure form

The fact or suspicion that property is psychologically impacted, including suspicion that it was the site of a homicide, other felony, or suicide, or was occupied by a person with HIV or AIDS, is not a material fact requiring disclosure, and no cause of action arises from the silence. The statute is not, however, authorization to make a false statement. Cite: R.I. Gen. Laws Section 5-20.8-6.

A Rhode Island seller never gives the buyer a completed disclosure form. The consequence is:

• a.The agreement is void and title is clouded
• b.The buyer may rescind at any time within one year of closing
• c.A civil penalty of up to $1,000 per occurrence, with the agreement and title unaffected✓
• d.A criminal misdemeanor charge against the seller

Failure to provide the seller disclosure form does not void the agreement nor create any defect in title, but each violation by the seller or the seller's agent carries a maximum civil penalty of $1,000 per occurrence. Cite: R.I. Gen. Laws Section 5-20.8-5(b).

Every Rhode Island contract for the purchase and sale of real estate must give the buyer an inspection period of:

• a.Five business days from the seller's acceptance
• b.Ten calendar days, counting weekends and holidays
• c.Fourteen days, which may not be shortened
• d.Ten days, exclusive of Saturdays, Sundays and holidays, unless the parties agree otherwise✓

The contract must allow a ten-day period, exclusive of Saturdays, Sundays and holidays, to conduct inspections before the buyer becomes obligated. The parties may mutually agree on a different period, and the buyer may waive the right in writing. Omitting the clause lets the buyer void the agreement by written notice before the transfer of title. Cite: R.I. Gen. Laws Section 5-20.8-4.

Which Rhode Island transfer is exempt from the seller disclosure requirements of Chapter 5-20.8?

• a.A builder's transfer of a new, unoccupied dwelling unit✓
• b.A sale of a fifty-year-old two-family house by its owner
• c.A sale of vacant land intended for one dwelling
• d.A sale by an owner who has never lived in the property

The exempt list includes transfers by court order, foreclosure or mortgagee transfers, transfers by a fiduciary administering an estate or trust, transfers between co-owners or to a spouse or lineal relative, transfers from a governmental entity, transfers by a relocation company, transfers with no consideration, and the transfer of any new unoccupied dwelling unit from a builder or developer. Cite: R.I. Gen. Laws Section 5-20.8-3.