Rhode Island Real Estate Salesperson Exam — All Questions

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.

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.