Selling a Rhode Island Home: What Are My Disclosure Obligations?

Selling your Rhode Island home involves many steps, from finding an agent to readying it for showings to negotiating with potential buyers. Rhode Island's legislature adds an extra small hurdle for sellers like yourself: You must provide the buyer with a "disclosure form" before signing a purchase contract.

What is a disclosure form? Essentially, this brief document asks home sellers to tell prospective buyers about any defects in the property, ranging from a leaking pipe to the presence of asbestos. While these sorts of disclosures are common in many states, Rhode Island is somewhat unique in the amount of information that sellers are asked to provide. If you are ready to sell your home in the Ocean State, what must you disclose?

Disclosure Laws in Rhode Island for Home Sales

As a seller, you should familiarize yourself with Rhode Island Code § 5-20.8-2. For starters, this section of state law says that before signing any agreement to sell real estate, the seller must "deliver a written disclosure to the buyer and to each agent with whom the seller knows he or she or the buyer has dealt in connection with the real estate."

The language about "any real estate agent" will literally most likely mean the buyer's agent, but the legislature obviously wants to ensure that one way or another, the buyer is made aware of the property's condition.

What Information Is Covered By the Rhode Island Real Estate Disclosure?

The Rhode Island Association of REALTORS has created a standard disclosure form, which your agent can provide to you.

The form covers not only defects, but various facts about the home—for example, its age, how much you pay in real estate taxes, and whether it's within a condo community governed by a homeowners' association, or is located within a historic district or wetland area. If you've done any construction without getting a permit, you'll need to report that, too. And, it asks about your history of filing homeowners' insurance claims.

The form also asks about the presence of hazardous materials or substances, such as lead paint, mold, radon, or asbestos.

Then the disclosure basically lists every element of a property that one might imagine, from the chimney to the basement. In some cases, it asks you to check a box as to whether you know of any "defects/malfunctions," indicating "Yes," "No," "UK" (unknown, if you do not have knowledge of whether as defect exists or not), or "NA" (not applicable, if that particular feature does not exist in your home). In other cases, you'll need to indicate, "Working," "Needs Repair," or "UK." There's also a spot to describe and explain defects or repair issues.

Your completed form should give the buyer a comprehensive snapshot of your knowledge of the property's condition. Just in case any topic was left out, the form includes numerous "other" lines for items that weren't specifically named.

Both you and the buyer must sign the disclosure before any formal offer of sale is made. Needless to say, you should keep copies for your records.

What If I'm Unsure About Whether a Particular Defect Exists in My Rhode Island Home?

Not every Rhode Island homeowner knows every inch of the home. What if you have no idea about the integrity of the structure of your house, or whether there are any problems with the water pumps? Fortunately, the statute requires only that you state deficient conditions of which you have actual knowledge. If you have no idea whether a particular aspect if your home is working or not, you can simply check the "UK" ("Unknown") box on the form.

At the very top of the disclosure form, the buyer is reminded that this isn't a guaranty or warranty, and buyers are encouraged to perform independent inspections and get estimates of the cost of repair or replacement of deficient conditions before submitting an offer on the property.

A professional inspection is common in real estate transactions. Even if an inspection does not turn up anything that concerns the buyer, it still provides peace of mind. You have no duty to pay for such an inspection.

Why Should You Be Honest and Open in Making Disclosures About Your Rhode Island Home?

As you can see on the form and by reading the statute itself, Rhode Island makes it clear to buyers that the disclosure is largely for convenience, and that the buyer should still hire a home inspector. Nevertheless, you can face angry buyers and possibly contentious civil litigation if you fail to disclose a defect about which you have actual knowledge.

From the buyer's perspective, trust is key. If an inspection reveals a condition that you tried to hide, be prepared for negotiations to become contentious, and for the price of your home to plummet.

Or if a buyer moves into the home and discovers a massive problem later, he or she will likely become irate; not merely be about the cost of fixing the problem, but also about the surprise, broken trust, and frustration. All of these emotions might well lead to a lawsuit.

While failing to make honest disclosures might save you trouble in the short term and result in a quicker sale, there is a potential for greater trouble down the road. The better strategy is to be frank and honest in your disclosures, so that both you and the buyer get the benefit of the bargain—and closure once the deal is done.