Rhode Island Real Estate Lawyer Blog

The real estate market in Rhode Island can be volatile. Changes in supply or demand, investors’ speculation, and broader economic factors can result in sudden changes in the market. Because the real estate market is always in flux, real estate agents often have the incentive to publish the most desirable listings in order to secure customer interest and the highly sought-after sale. Like any advertiser, real estate agents have a responsibility to be honest in what they publish. Real estate agents who intentionally misrepresent the products they are advertising can be held both civilly and criminally accountable for fraud. In some instances, a real estate agent may share untrue information without knowing, and the consequences may not be as clear.

The Rhode Island Supreme Court has addressed the question of how real estate agents and brokers should be held to account for false or misleading information that a buyer relied on to make a purchase. A unique factor in the Rhode Island real estate market involves the use of MLS systems to organize listings among brokers. MLSs, or Multiple Listing Services, are databases prepared and managed by one or more real estate brokers to conveniently organize listings. The information obtained from an MLS may have been entered incorrectly, and real estate agents have a duty to confirm that the information they are using from an MLS is accurate.

If an agent fails to disclose a known defect in a home or even fails to confirm that the information in an MLS listing is accurate, the agent could be held accountable in state courts for negligence or even fraud. Rhode Island General Laws Title 5, Section 20.8 details the rights and duties of licensed real estate agents in the state. Provisions of the code permit both sellers and their agents to be held financially responsible for information that was not disclosed to the buyer under the requirements of the section. Determining whether an agent had “actual knowledge” of a defect can be a difficult task. If a seller misleads their agent into publishing inaccurate information, the agent may be able to avoid liability for the mistruth; however, the seller may be on the hook for the fraudulent misrepresentation.

Generally speaking, the addition or construction of improvements on real property will change the value of the property and the resulting property tax burden to the owner of said property. State lawmakers and regulators have sometimes modified this general rule to encourage specific types of development by offering tax discounts or incentives. Considering the environmental and economic favorability of renewable energy projects, Rhode Island lawmakers have recently enacted changes to the state tax law as it applies to renewable energy projects, helping ensure that such projects are treated favorably by the tax code. The Rhode Island Supreme Court recently addressed a claim by a property owner which alleged that the plaintiff was overtaxed on their energy development in contravention of the recently passed laws.

The plaintiff in the recently decided case is a landowner who leased 10 acres of his Lincoln, RI property to a solar energy company for the construction of a solar energy project. After the project was completed, the assessed value of the plaintiff’s property increased by nearly $400,000, and the plaintiff’s tax burden increased significantly as a result. The plaintiff appealed the increased valuation to the municipal tax assessor and board of appeals, claiming that solar energy projects were tax-exempt under state law. The municipal defendants denied the plaintiff’s appeals, and the plaintiff brought the case to the Superior Court. The superior court affirmed the lower boards’ denial of the plaintiff’s claim. The court found that while the tax laws exempted solar energy projects from municipal taxation, the exemption does not apply to the property taxes for the land that the development was constructed upon.

The plaintiff appealed the Superior court ruling to the Rhode Island Supreme Court, where the lower court’s reasoning was upheld. The high court found that the law relied on by the plaintiff unambiguously mandated that only the tangible assets that form a renewable energy development are exempt from taxes. The plaintiff then pointed to a 2022 law that reclassified some real property containing renewable energy development as tax-exempt, however, the court was unable to apply the newer law, as the plaintiff’s claims arose under the law existing in 2019.

As one of the original 13 colonies that ultimately declared independence from Britain and became a U.S. state, Rhode Island is the home to thousands of historic buildings, many from the 19th and 18th centuries. Historic communal buildings, such as schools, municipal complexes, and churches, are often the last remaining historic buildings from a bygone era. As historic buildings age and deteriorate, the state and local governments are forced to balance the interests of historical preservation with those of safety, aesthetics, and a city’s comprehensive development plan. A division of the Rhode Island Superior Court recently addressed townspeople’s objection to an approved development project in the Wickford Village Center District of the town of North Kingstown.

The Town of North Kingstown is the home of the former Wickford Elementary School, built in the 1800s. The building, which currently leaves an 11,000-square-foot footprint, has been the source of problems for the town for years. The town has attempted to facilitate renovation and development of the abandoned building several times since it went vacant over 15 years ago. The appellee in the recently decided case is a development company that submitted a plan to the town to convert the old schoolhouse into a 39-unit condominium complex. The appellee sought and was granted several dimensional and use variances from the town’s zoning board to allow the project to continue. To gain approval for the project, the appellee called several expert witnesses to testify about the feasibility and effects of their development project.

Neighboring property owners objected to the project at the planning and zoning stage. They ultimately appealed the zoning board’s approval to the superior court, arguing that the size of the project, as well as the amount of parking that would be needed, disrupted the townspeople’s use and enjoyment of their property. The appellee responded that each of the townspeople’s objections to the project had been addressed by the expert witnesses who testified before the zoning board, and the townspeople did not object to or challenge the experts at the time.

Cities and towns across the state have established laws and regulations to preserve their general aesthetic. The Town of Providence has a rule prohibiting billboards and electronic billboards within municipal borders. Anyone who has been to providence could attest that there are most certainly both billboards and electronic billboards in the city. This is possible because residents and business owners are permitted to apply for a variance from the city to permit the construction of a billboard. The process of applying for and receiving a variance to construct a billboard (or other nonconforming structure) can be complicated and should be carefully planned before being put into action. A Rhode Island Superior Court recently addressed a property owner’s third attempt to construct a billboard on his property.

According to the facts discussed in the recently published judicial opinion, the petitioner in the case is a property owner who sought to construct an electronic billboard on his property. Because such billboards are prohibited under municipal ordinances, he applied for the necessary variances with the city’s zoning board of review. His initial application was approved; however, a neighboring property owner appealed the ruling to the Superior Court, and the approval was reversed. The petitioner applied a second time and was again approved, only for the decision to again be reversed on appeal. The Superior Court noted that their ruling was final and not to be remanded back to the zoning board.

On his third attempt, the petitioner brought in new evidence and an expert to testify to alleviate the court’s previous concerns. He applied to the zoning board of review for a variance but was rejected because the new evidence he sought to offer was presented too late and could not be considered by the board. The board entered a final order denying the petitioner’s application. The petitioner appealed to the Superior Court one last time, but the court found itself bound by the prior decisions and rejected his appeal.

Rhode Island law dictates what responsibilities landlords and tenants each have to maintain the property in a livable condition. The state of Rhode Island has published a landlord-tenant handbook that notes the relevant laws pertaining to these responsibilities. Damage caused to a rental home and the contents thereof may be the responsibility of the landlord or the tenant, depending on the circumstances surrounding the damage. Rhode Island landlords are legally required to maintain all common areas of a rental property inside and outside the dwelling. These areas must be maintained in a continuous fit and habitable condition. Any damage to a home’s electrical, plumbing, heating, and sanitary systems is the responsibility of the landlord.

Minor structural repairs and any major repairs are also the responsibility of the landlord. Cleaning, as well as minor repairs of problems caused by a tenant’s own negligence, are the responsibility of the tenant. If a landlord and tenant so choose, they can enter into additional written agreements to divide maintenance and repair responsibilities further; however, state law sets a minimum responsibility level for landlords that cannot be contractually eliminated.

The home itself, the fixtures, certain appliances and other property belonging to the landlord may be covered under a property insurance policy in the event of a covered loss. Tenants’ personal property, including electronics, clothing, automobiles, recreational equipment, etc, is not covered by the homeowner’s insurance policy. Tenants seeking insurance coverage for their property located in the home should purchase a rental insurance policy to protect their property and assets.

Real estate purchase and sales agreements in Rhode Island are generally drafted and reviewed by several real estate law experts to ensure that each party’s rights and obligations are clear and unambiguous so that the contract can be easily enforced in the event of a breach or default. When contract terms are unclear or have more than one reasonable interpretation, this can lead to contract disputes that may ultimately cost more to the parties in legal fees than the disputed amount. The Rhode Island Supreme Court recently addressed cross-motions filed by parties to a real estate contract, which disputed the amount that the plaintiff would be allowed to subtract from the purchase price of the property based on agreed-upon renovations to the dock which the plaintiff demanded as a condition of the sale.

According to a judicial opinion released by the court hearing the dispute, the plaintiff agreed to purchase a dock from the defendant in 2017 for use in their petroleum distribution business. Because the dock at issue was not allowed to service boats over 90 ft, and the plaintiff’s use of the dock would require permission for boats up to 105 ft, the parties agreed in the real estate contract that the cost of repairs would be deducted from the purchase price. The parties included a provision that would adjust this division of responsibility in the event that the actual renovation cost either exceeded or fell short of an estimated amount.

After the project was completed, each party demanded payment from the other based on the purchase contract. The parties disputed which figure should be used for the “estimated amount” of renovation costs. The plaintiff and defendant each proposed a different estimated cost of renovation, with vastly different outcomes for each figure being used. Using the plaintiff’s numbers, they would be entitled to an overpayment of over $400,000, while using the defendant’s numbers would require the plaintiff to pay nearly $15,000 for underpayment. The plaintiff sued the defendant in the Superior court seeking $400,000, and the defendant countersued for the underpaid amount.

Over the last century, the Rhode Island coastline has evolved from large estates used for agricultural and industrial purposes into a vibrant, year-round beach destination. A necessary consequence of this development includes the subdivision of larger parcels into smaller lots for residential and commercial development. As larger beachfront parcels are divided into smaller lots, many properties that once included direct beach access have become landlocked from the coast.

The smaller lots that we see today often include rights of passage or other easements against beachfront properties to ensure that the owners and tenants of the now-landlocked properties maintain the right to access adjacent beaches. Present-day property owners who are fortunate enough to possess a property that directly abuts the coastline often oppose neighboring property owners and tenants using these rights of way to access the beach. The Rhode Island Superior Court recently issued a ruling in a case brought by a semi-oceanfront property owner against their oceanfront neighbor to determine if an easement existed for the plaintiff to cross through the defendant’s property when accessing the beach.

In 1986, the plaintiffs in the recently decided case purchased a lot in Narragansett that was across the street from the defendant’s lot, which directly abutted the beach. According to the purchase agreement and recorded deed for the plaintiff’s transaction, the plaintiffs’ property included an easement, established in 1929, for them to access the beach through the defendant’s property. The plaintiffs used the defendant’s property to access the adjacent beach without issue from 1986 until 2015. In 2015, the defendants constructed a barricade and refused the plaintiffs access to the beach, stating that no easement existed and that the plaintiffs were trespassing by using the defendants’ driveway for beach access.

Developing a large real estate project in Rhode Island can be a complicated, time-consuming, and expensive process. Securing financing and obtaining zoning and other permits can be tricky, and the success or failure of a proposed development often relies on the decisions of municipal councils, zoning boards, or other administrative bodies. A group of plaintiffs recently sued a Rhode Island town for its failure to timely and properly approve their plans to develop real estate within the town limits.

The plaintiffs in the recently decided case are a group of developers who sought to construct a nearly 1000-acre planned development in the town of Richmond, Rhode Island. The plaintiff’s development was to include a golf course, a clubhouse, outdoor recreation trails, a gun range, as well as a hotel. In 2011, the plaintiffs informally notified the Town that they were seeking to construct a gun range on the property, and discussed the plans at public hearings held by the town.

The plaintiffs discovered in 2014 that the town council had amended the municipal ordinances to prohibit gun ranges from being built on the type of property the plaintiff sought to develop. Two years later, the property was rezoned so that a gun range could be constructed on the property, and the plaintiffs resumed the pursuit of that goal. The plaintiffs secured conditional financing for the project and began selling memberships to the gun range before obtaining approval from the town. The town did not hold a public hearing on the plaintiff’s proposed construction until after the plaintiffs’ financing offer had expired, and the plaintiffs were not able to continue with the project.