Articles Posted in Real Estate

If a Rhode Island property owner fails to pay their bills (mortgage, tax, utility, etc.), they may be subject to the foreclosure of the property, and they may lose title and ownership permanently. In the event of a foreclosure, the original owner does have a right to redeem their nonpayment by asking the court to set a fair price for the redemption to occur and the foreclosure to be vacated. Although it is generally cheaper for a property owner to simply pay their bills rather than wait for an opportunity to redeem a property, the right of redemption exists to protect owners who may have been negligent in the past from losing their property entirely. The Rhode Island Supreme Court recently reversed a trial court decision that permitted the owner to redeem ownership of the property.

The Respondent in the recently decided case purchased a property in Providence in 2009. As a result of unpaid taxes, the city of Providence took possession of the property and sold it at auction to the Petitioner. Acting within the standard procedure, the Petitioner filed an action to foreclose on the Respondent’s property rights in the Superior Court. Under state law, the Respondent had 20 days to answer the petition and make an offer to redeem the property. The Respondent filed an answer to the petition within the 20-day period, however, the answer contained no offer or request to redeem the property. Because the Respondent’s answer contained no offer to redeem the property, the Petitioner requested that the court enter a final order foreclosing on the Respondent’s right to redeem the property.

The state court rejected the petitioner’s request, instead allowing the Respondent to amend their answer to include a redemption offer. As a result of the ruling, a redemption figure was set, the Respondent began to take action to redeem the property, and the Petitioner appealed the ruling to the state Supreme Court. On Appeal, the Petitioner argued that the statute setting the 20 day deadline for making an offer to redeem a property establishes a mandatory deadline, which cannot be extended by allowing a party to amend their court pleadings. The Supreme Court agreed with the Petitioner, ruling that the redemption statute must be strictly construed, and absolutely requires any person seeking to redeem the property to make an offer to redeem the property within the statutory timeframe. Because the Respondent failed to timely make an offer to redeem the property, the law must be applied as written, and the Respondent will not be able to regain ownership of the property.

Most buyers of real estate in Rhode Island are well aware of the risks involved in purchasing property in the state. The seller of property does have obligations to notify a buyer of known defects, as well as to not defraud a buyer by knowingly misrepresenting the characteristics or conditions of a property, but the primary risk lies with the buyer. Title insurance helps to alleviate the risks of a dispute over ownership or property boundaries, and buyers are encouraged to have thorough property inspections prior to entering into a purchase contract. Even when all precautions are taken, the purchaser of a property may learn that there are significant problems or defects with the property, which sometimes leads them to pursue legal action against the seller. The Rhode Island Supreme Court recently addressed a case that was filed by the buyer of commercial property in Rhode Island, which alleged that the seller failed to disclose the presence of harmful asbestos roofing tiles, which were time-consuming and expensive to remove.

The plaintiff in the recently decided case purchased a commercial property from the defendant in 2012. Shortly after completing the purchase, the plaintiff discovered that the property contained a significant amount of asbestos, which would need to be removed before he could continue using the property. The plaintiff sued the defendant in an attempt to recover damages. As part of the lawsuit, the plaintiff was required to disclose any experts that he would call to testify about the issues in the case. The plaintiff’s attorney failed to meet the deadline set by the court for expert disclosure, and the defendant attempted to have the case dismissed. The court allowed the plaintiff one more chance to disclose the experts he would use, after which the plaintiff only successfully disclosed one witness. The witness disclosed by the plaintiff was a general contractor who did not claim to be an expert at asbestos or asbestos abatement. On the defense’s motion, the court entered judgment in favor of the defendant on all of the asbestos-related claims.

The plaintiff appealed the lower court ruling to the Rhode Island Supreme Court, arguing that the proposed witness had sufficient knowledge of the relevant areas of expertise to offer an opinion on the issue. The high court rejected the plaintiff’s arguments, ruling that the basic knowledge held by the plaintiff’s expert was not sufficient to meet the bar for the required expert testimony. The court found that the plaintiff’s witness was not a qualified expert, and the lower court had properly disposed of the plaintiff’s claims relating to the existence or removal of asbestos. As a result of the high court ruling, the plaintiff will be unable to recover any damages he has suffered b y addressing the undisclosed asbestos in the property he had purchased.

All residential, commercial, and industrial properties in the state of Rhode Island are subject to zoning and permit requirements. From homeowners seeking to renovate their homes to large industrial developers planning a project worth tens of millions of dollars, anybody seeking to break ground on a construction project may be subject to cumbersome zoning and permit issues. Knowing the basics of Rhode Island construction permits and RI zoning law can help residents of the state know when a possible issue could arise and when to seek compensation advice and representation when proposing development or construction.

Rhode Island’s zoning laws are relatively decentralized, giving towns and cities the ability to set their own requirements for certain types of construction in accordance with the municipalities’ general plans for development and preservation. There are several types of zoning classifications used by municipalities to encourage districts that include the desired type of development based on geography and other factors. Some of the types of zoning in the state include residential, commercial, downtown, waterfront, institutional, industrial, and public recreational properties.

Each of the zoning types may contain additional incentives and restrictions based on further subclassifications. A multi-family townhome may not be permitted on a property zoned for single-family occupancy. If a block is zoned for commercial use, that does not necessarily mean that a ten-story office building can be constructed. Rhode Island residents with questions about the zoning requirements of a certain piece of property can seek out legal advice from a qualified Rhode Island zoning attorney to answer their questions.

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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.