Rhode Island wholesalers must get licensed before arranging property deals

A wholesaler must hold an active real estate license or qualify for an exemption before signing a wholesale or assignment contract. A wholesaler is someone who helps arrange a real estate sale mainly to transfer or sell an interest for financial gain before taking legal ownership, more than once in any 12-month period. Licensed or registered builders, developers, and contractors are excluded when transferring an interest in vacant land or property intended for new construction as part of bona fide development, financing, construction, or subdivision activity. The law takes effect January 1, 2027. The licensing rule takes effect January 1, 2027.

Wholesalers must give written disclosures and include notices in wholesale and assignment contracts about review and cancellation rights. Before entering a purchase contract, the wholesaler must tell the seller in writing that the contract may be assigned for payment. Before an assignment, the wholesaler must tell the buyer in writing that the wholesaler has an ownership interest but no legal title. The seller may cancel a wholesale contract during the three-business-day period without giving a reason or paying a penalty; any deposit the wholesaler provided must be returned. The buyer may cancel an assignment contract during its three-business-day period without giving a reason or paying a penalty. An assignment contract cannot prevent the buyer from choosing their own closing attorney, settlement agent, or owner’s title policy provider. If required wholesale contract disclosures are missing, the seller or buyer may cancel before the deal is completed without penalty. The property cannot be transferred or assigned until the relevant cancellation period ends.

A person who violates the listed disclosure, assignment-contract, or cancellation rules faces a fine and may owe additional money if they received money from the violation. The fine applies to violations of the chapter’s listed disclosure, assignment-contract, and cancellation rules. The fine is $500 for a first offense and $1,000 for each later offense. A person who received a fee, compensation, or profit because of a violation may also be ordered to pay between that amount and three times that amount. The penalty rules take effect January 1, 2027.