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H7840A
2026 -- H 7840 SUBSTITUTE A
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LC004880/SUB A
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2026
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A N A C T
RELATING TO BUSINESSES AND PROFESSIONS -- REAL ESTATE BROKERS AND
SALESPERSONS
Introduced By:
Representatives DeSimone, Baginski, and Slater
Date Introduced:
February 27, 2026
Referred To:
House Corporations
It is enacted by the General Assembly as follows:
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SECTION 1. Sections 5-20.5-1 and 5-20.5-2 of the General Laws in Chapter 5-20.5 entitled
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"Real Estate Brokers and Salespersons" are hereby amended to read as follows:
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5-20.5-1. Definitions.
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When used in this chapter, unless the context indicates otherwise:
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(1) “Associate broker” means any licensed real estate broker employed or engaged as an
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independent contractor by or on behalf of a licensed real estate broker to do or deal in any activity
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as included or comprehended by the definitions of a real estate broker in subsection (5) of this
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section, for compensation or otherwise.
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(2) “Director” means the director of business regulation for the state.
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(3) “Opinion of value” means an analysis, opinion, or conclusion prepared by a person
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licensed under this chapter, in the ordinary course of his or her business relating to the price of
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specified interests in or aspects of identified real estate or identified real property or by comparison
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to other real property currently or recently sold in the marketplace for the purpose of listing,
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purchase, or sale, excluding an appraisal prepared by a person licensed under the provisions of
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chapter 20.7 of this title, that conforms to the standards adopted by the uniform standards of
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professional appraisal practice (“USPAP”).
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(4) “Real estate,” as used in this chapter, includes leaseholds as well as any and every
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interest or estate in land, whether corporeal or incorporeal, freehold or non-freehold, and whether
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the property is situated in this state or elsewhere.
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(5) “Real estate broker”:
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(i) Within the meaning of this chapter, includes all persons, partnerships, associations, and
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corporations, foreign and domestic, who or that:
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(A) For a fee, commission, or other valuable consideration, or with the intention or
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expectation of receiving or collecting a fee, commission, or other valuable consideration, lists, sells,
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purchases, exchanges, rents, leases, prepares an opinion of value, or auctions any real estate, or the
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improvements on real estate including options or who negotiates or attempts to negotiate any such
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activity;
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(B) Advertises or holds himself or herself, itself, or themselves out as engaged in those
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activities;
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(C) Directs or assists in the procuring of a purchaser or prospect calculated or intended to
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result in a real estate transaction
;
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(D) Engages or assists individuals or entities in engaging in securing, negotiating, or
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facilitating the sale of real estate for the primary purpose of transferring, assigning or selling their
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equitable interest in the real estate, directly or indirectly, for financial gain prior to taking
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possession or legal ownership of such real estate more than once in any period of twelve (12)
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months
.
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(ii) Also includes any person, partnership, association, or corporation employed by or on
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behalf of the owner or owners of lots, or other parcels of real estate, at a stated salary, or upon a
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fee, commission or otherwise, to sell that real estate, or any parts, in lots or other parcels, and who
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or that sells, exchanges or leases, or offers or attempts or agrees to negotiate the sale, exchange, or
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lease of any such lot or parcel of real estate.
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(6) “Real estate salesperson” means and includes any person employed or engaged as an
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independent contractor by or on behalf of a licensed real estate broker to do or deal in any activity
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as included or comprehended by the definitions of a real estate broker in subsection (5) of this
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section, for compensation or otherwise.
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5-20.5-2. Persons exempt.
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(a) Neither the term “real estate broker” nor “real estate salesperson” is held to include:
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(1) Any person, partnership, association, or corporation, who or that, as a bona fide owner,
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lessee, or lessor, performs any of the previously stated acts as to property owned, or leased by them,
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or to their regular employees, where those acts are performed in the regular course of, or as an
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incident to the management of the property and the investment in the property
; provided, however,
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that such exemption shall not apply to the sale of an equitable interest in real estate;
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(2) A builder, developer, or contractor licensed or registered with the department of
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business regulation when assigning or transferring an equitable interest in vacant land or property
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intended for new construction in connection with bona fide development, financing, construction,
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or subdivision activity
; or
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(2)
(3)
Any person, partnership, association, or corporation, or any of their employees, who
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or that seeks to acquire, lease, rent, sell, or deal in real estate that has been or will be used or held
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for investment by that person, partnership, association, or corporation.
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(b) This chapter is also not to be construed to include:
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(1) Any attorney at law licensed by the supreme court of the state nor any person holding
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in good faith an executed power of attorney from the owner, authorizing the final consummation
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and execution for the sale, purchase, leasing, or exchange of real estate;
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(2) The acts of any person while acting as a receiver, trustee, administrator, executor,
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guardian, or under court order, or while acting under authority of a deed of trust or will;
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(3) The acts of any person, partnership, association, or corporation who or that appraises
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real or personal property for the purpose of conducting a mass appraisal, municipal revaluation for
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tax purposes, or other forms of ad valorem appraisal; or
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(4) Public officers while performing their duties as public officers.
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SECTION 2. Title 34 of the General Laws entitled "PROPERTY" is hereby amended by
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adding thereto the following chapter:
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CHAPTER 51
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WHOLESALING OF REAL PROPERTY
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34-51-1. Definitions.
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For purposes of this chapter:
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(1) “Assignment contract” means an agreement between a wholesaler and a buyer in which
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a wholesaler agrees to sell the wholesaler’s equitable interest in real estate to the buyer for
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compensation and without assuming title to such property.
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(2) “Person” means a natural person, corporation, government, governmental subdivision
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or agency, business trust, estate, trust, partnership, association, joint venture, or other legal or
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commercial entity.
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(3) “Real estate” means leaseholds as well as any and every interest or estate in land,
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whether corporeal or incorporeal, freehold or non-freehold, and whether the property is situated in
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this state or elsewhere.
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(4) “Wholesaler” means a person who engages or assists individuals or entities in engaging
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in the securing, negotiating, or facilitating the sale of real estate for the primary purpose of
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transferring, assigning or selling their equitable interest in the property, directly or indirectly, for
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financial gain prior to taking possession of legal ownership of such real estate more than once in
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any period of twelve (12) months. “Wholesaler” shall not include a builder, developer, or contractor
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licensed or registered with the department of business regulation when assigning or transferring an
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equitable interest in vacant land or property intended for new construction in connection with bona
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fide development, financing, construction, or subdivision activity.
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(5) “Wholesale contract” means an agreement between a wholesaler and the seller of real
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property in which the real estate wholesaler agrees, or reasonably expects or intends to, for
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compensation and without assuming title to such property, facilitate or orchestrate the sale of such
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property to a third party.
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34-51-2. Licensing Requirements.
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No person shall enter into a wholesale contract or assignment contract of real estate unless
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such person:
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(1) Possesses a valid, active real estate license issued by the department of business
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regulation in accordance with § 5-20.5-6; or
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(2) Qualifies for an exemption from licensing in accordance with § 5-20.5-2.
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34-51-3. Wholesale contract requirements.
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(a) Before entering into a contract to purchase real estate, a wholesaler shall disclose, in
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writing, to the owner of the property that the wholesaler may assign the contract of sale to another
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person for a fee, compensation or other valuable consideration.
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(b) Each wholesale contract shall include language providing notice that:
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(1) The seller retains a period of three (3) days, excluding weekends and federal and/or
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state holidays, within which the seller may, in the seller's discretion and at the seller's expense,
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review the terms of the contract with an attorney or other advisor; and
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(2) The seller may cancel such contract during the three (3) business day period without
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providing any reason for such cancellation or incurring any penalty or obligation, except for the
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return of any deposit, if any, that the wholesaler paid or provided to the seller or the seller’s agent.
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34-51-4. Assignment contract requirements.
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(a) Before entering into an assignment of contract to purchase real estate, a wholesaler shall
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disclose in writing to any prospective buyer that the wholesaler holds an equitable interest in the
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property but does not hold legal title to the property.
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(b) Each contract of assignment shall include language providing notice that:
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(1) The buyer retains a period of three (3) days, excluding weekends and federal and/or
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state holidays, within which the buyer may, at its discretion and at its expense, review the terms of
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the contract with an attorney or other advisor; and
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(2) The buyer may cancel such contract during the three (3) business day period without
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providing any reason for such cancellation or incurring any penalty or obligation.
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(c) No assignment contract shall contain language that prohibits the assignee from using
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their own closing attorney, settlement agent, or provider of an owner’s title policy.
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34-51-5. Right of cancellation.
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(a) The transfer of real estate that is subject to a wholesale contract shall not occur until the
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cancellation period of the wholesale contract has expired.
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(b) The assignment of real estate shall not occur until the cancellation period of the
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assignment contract has expired.
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(c) The right to cancel a wholesale contract or assignment contract shall not be waived by
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any party to a wholesale contract.
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(d) If the wholesaler fails to include the disclosures required in § 34-51-3 in the wholesale
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contract, the seller or buyer may cancel a wholesale contract or assignment of contract without
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penalty at any time before the consummation of the contract. A buyer who rescinds a contract under
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§ 34-51-4 shall be entitled to the refund of any deposit paid in connection with the assignment of
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the contract of sale of real estate.
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34-51-6. Penalties for violations.
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(a) Any person who violates the provisions of §§ 34-51-3, 31-51-4 or 34-51-5 shall be
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punished by a fine of five hundred dollars ($500) for a first offense and by a fine of one thousand
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dollars ($1,000) for each subsequent offense.
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(b) If any person has received any money, or the equivalent, as a fee, compensation, or
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profit by or in consequence of a violation of any provision of this chapter, they shall, in addition to
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any fines imposed in subsection (a) of this section, be civilly liable in an amount of money no less
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than equal to the sum received in fee, compensation or profit, but not more than three (3) times the
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fee, compensation or profit received, as may be determined by the court.
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SECTION 3. This act shall take effect on January 1, 2027.
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO BUSINESSES AND PROFESSIONS -- REAL ESTATE BROKERS AND
SALESPERSONS
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This act would require any person, as defined, who is in the business of selling, assigning
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or buying an equitable interest in real estate without taking legal title to such property, to be licensed
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as a real estate broker or salesperson and to comply with the disclosure requirements and
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cancellation provisions as mandated.
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This act would take effect on January 1, 2027.
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