Articles Posted in Real Estate

Anyone who is interested in sharing ownership of Rhode Island real estate will discover that there are various ways for multiple parties to share a piece of real estate, each of them with benefits and disadvantages to the parties, depending on the situation. The most common types of shared property ownership in Rhode island are joint tenancy and tenancy-in-common.

The most common form of joint possession of real property in Rhode Island is called a tenancy-in-common. Under state law, any property that is sold, given, or otherwise conveyed to two or more persons is presumed to be a tenancy-in-common, unless the conveyance expressly states otherwise. Under tenancy-in-common, two or more tenants each own a partial share of the entire property, although they each have the right of possession and use of the entire property. Tenants in common do not need to hold equal shares of a property, and their individual shares can be transferred or sold to another party without the consent of the other owners. If a tenant in common dies while in possession of the property, her portion of the property will go to her heirs.

The second most common form of joint possession of real property in Rhode Island is joint tenancy. Joint tenancy is the primary form of joint property ownership for married couples, although any group of two or more persons may elect to hold property as joint tenants if they desire and the other requirements for a joint tenancy are met. Joint tenancy is similar to a tenancy-in-common, however, there are a few key differences.

The idea behind owning and maintaining Rhode Island rental properties is to make a profit. Indeed, managing a rental portfolio is a good way to earn passive income. Like any business, one of the primary challenges as a landlord is to ensure that a property is generating a positive cash flow. Everyday expenses such as maintenance, taxes and registration requirements can quickly eat away at rental income. Landlords may also be liable for any injuries that occur on their property. If landlords are not property protected, their personal assets can be put in jeopardy. Thus, taking steps to manage the risks associated with rental properties is a crucial step that Rhode Island landlords should consider.

Whenever someone is injured on another’s property, the injured party may pursue a Rhode Island premises liability claim against the landlord. Figuring out who is liable in a slip and fall accident involving a landlord/tenant relationship is not always straightforward. For example, courts will look to how the injury occurred, who is in charge of maintaining the premise, and whether the landlord had any knowledge of the hazard that caused the tenant’s injuries.

The first person a tenant will look to after being injured at a rented home or apartment is likely the landlord. Rhode Island landlords have a few options when it comes to dealing with these risks. Two of the most common ways to deal with these risks are forming a Limited Liability Company (LLC) or purchasing an umbrella insurance policy.

A variety of Rhode Island property law issues that require legal advice can affect property owners in the state. One such issue is eminent domain, which is the way that a state, municipality, or other entity granted eminent domain power by statute can take personal property for government use. Government entities must follow state and federal law in exercising eminent domain power, and the laws are designed to be fair to the private property owner who is giving up their property.

A commonly recognized use of eminent domain powers is for the construction or widening of roadways, however, there are several acceptable uses that allow the government to take private land. Rhode Island General Laws section 42-64.12-6 lists these uses as:

• Providing for the public’s ownership and use;

For the most part, property owners can do what they wish with their property. However, Rhode Island property law steps in to provide some guidance and regulation of how landowners use their land. For the most part, this is to ensure that others who own nearby property are not negatively affected by a landowner’s decisions.

One of the more common issues that arise between neighbors involves the lawfulness of a property owner’s fence. In many situations, fences are necessary to keep people or animals out; however, fences can also have a deleterious effect on the “feel” of an area or neighborhood. Fences can also obstruct nearby homeowners’ view, or, interrupt their access.

It may come as a surprise to some homeowners, but Rhode Island fencing law outlines precisely what types of fences are permitted. For example, below is a list of permissible fences, discussed in terms of minimum height:

One of the more complex areas of Rhode Island real estate law is zoning. Zoning refers to the process in which a city or town divides land and designates certain permissible or prohibited use. For example, Rhode Island zoning laws govern whether a homeowner can run a retail business out of the first floor of their home or whether a manufacturer can construct a factory on a specific plot of land.

Historically, the state government allowed local municipalities to make their own zoning decisions. However, after being confronted by the reality of having a total lack of a uniform zoning system, the state government passed the Rhode Island Comprehensive Planning and Land Use Act (the Act). The Act was designed to implement a state-wide zoning system while still allowing municipal discretion.

The Rhode Island zoning laws impose several layers of restrictions. First, all land is broadly classified into the following categories, known as zoning districts:

Benjamin Franklin once said, “In this world nothing can be said to be certain, except death and taxes.” Not only that, but it seems that lately Rhode Island property taxes move in one direction: up. Rhode Island property taxes average 1.53%, which puts the state at the 10th highest property tax rate in the country.

While property tax may be a certainty, there are some steps homeowners can take in the face of a mounting tax bill. One option is to apply for a property assessment freeze. The most common reason for a property tax increase is a reassessment of the property value. In Rhode Island, cities and towns are required to perform a statistical update every third and sixth year, and a full re-evaluation every ninth year. A property assessment freeze prevents a home from being reassessed at a higher value in the future.

Another option is to apply for a property tax freeze. Rhode Island is one of just six states that allows some residents to freeze their property tax rate. To qualify for a Rhode Island property tax freeze, a homeowner must be at least 65 years old and earn an annual income of less than $4,000. Those who have recently become totally disabled may also qualify for a tax freeze. In neighboring Connecticut, the rules are more favorable, allowing any homeowner over the age of 70 to apply for a tax freeze, regardless of income.

The Rhode Island Supreme Court recently decided a property case, demonstrating the importance of preserving arguments for appeal. In this case, the plaintiff entered into a lease with the defendants to rent commercial property owned by the defendants. The plaintiff paid the defendants $18,600, which was comprised of $9,300 for a security deposit and $9,300 for the first month’s rent. A “receipt agreement” signed by the parties stated that if the property was not ready on or before November 14, 2013, “all deposits are fully refundable.”

According to the plaintiff, after the city found out that the plaintiff planned to grow medical marijuana in the building, the defendant told the plaintiff to “forget about” the property and that he was keeping the security deposit “for his aggravation.” The defendant testified that he did not return the security deposit because the plaintiff left the lease “without even trying to do anything.” The plaintiff could not occupy the property, and the defendants refused to return the security deposit. The plaintiff claimed that the defendants breached the contract, and also that the refusal to return the security deposit constituted a conversion of his property. A jury agreed, finding the defendants converted the plaintiff’s security deposit to their own use.

On appeal, the defendants argued in part that the economic loss doctrine barred the plaintiff from recovering under the conversion claim. The defendants argued that the plaintiff should not have been able to receive a damages award for the conversion claim because the plaintiff did not suffer any injury, and thus should be barred under the economic loss doctrine.

Waterfront property is widely considered to be the most desirable property in the state. And while Rhode Island has just 40 miles of coastline, when considering all inlets and tidal areas, there are closer to 385 miles of shoreline. Still, that is a limited amount of space for an area that is known for its beautiful beaches and temperate summer climate.

With the gorgeous views and access that it affords property owners, Rhode Island waterfront property is also among the most valuable. However, property owners are not the only ones who hope to benefit from the perks that waterfront property provides. Indeed, the tension between a property owner’s right to exclude others from their property and the public’s access to beaches has been a consistent theme throughout New England property law since the formation of our country.

When it comes to determining ownership rights along the coastline, Rhode Island uses a public trust doctrine. The public trust doctrine essentially states that the submerged land is owned in public trust, and owners of the beach cannot prevent the public from using this land (and the water above it). The Rhode Island public trust doctrine is contained in Article I Section 17 of the Rhode Island Constitution, and specifically provides that the public has a right to use the beach for “fishing from the shore, the gathering of seaweed, leaving the shore to swim in the sea and passage along the shore; and they shall be secure in their rights to the use and enjoyment of the natural resources of the state with due regard for the preservation of their values.”

The income provided by a Rhode Island rental property can be a great way to increase your monthly cash flow. Not only do properly managed investment properties bring in cash each month, but they can also appreciate over the years. However, while rental property income is considered passive, there are some common issues that Rhode Island landlords find themselves needing to deal with regularly. Having a dedicated Rhode Island real estate attorney can help reduce the time it takes to resolve these inevitable issues, making sure your property stays occupied for as much of the time as possible.

Rhode Island investment properties are governed by a combination of local, state, and federal laws. Most of the important laws that landlords will encounter are state laws; however, federal laws provide for certain requirements related to the Environmental Protection Agency, U.S. Department of Housing and Urban Development, and discriminatory renting practices. Local municipal laws may tweak how landlords must handle specific situations, such as dealing with noise ordinances, but generally govern more minor issues.

As noted above, Rhode Island state law is most important for landlords to understand. A few common areas of concern under Rhode Island’s rental property laws are: