Key Takeaways
- Rhode Island recognizes designated client representation (single agency) and dual agency with consent
- A designated client representative represents only one party in a transaction
- Dual agency requires written consent from both parties and limits what the agent can do for either party
- All licensees have duties to ALL parties including honesty and fair dealing
- Licensees must disclose personal interests in transactions to all parties
Rhode Island Agency Relationships
Rhode Island law (Chapter 5-20.6 - Relationships in Residential Real Estate Transactions) defines the types of agency relationships that real estate licensees may have with consumers.
Types of Agency Relationships
Designated Client Representative (Single Agency)
A designated client representative is a licensee who represents only one party in a transaction:
| Role | Represents |
|---|---|
| Seller's representative | Seller only |
| Buyer's representative | Buyer only |
| Landlord's representative | Landlord only |
| Tenant's representative | Tenant only |
Duties to client include:
- Loyalty to the client's interests
- Confidentiality of client information
- Full disclosure of material facts to client
- Obedience to lawful instructions
- Accounting for all funds
- Reasonable care and skill
Dual Agency
Dual agency occurs when:
- One licensee represents both buyer and seller in the same transaction, OR
- Two licensees from the same brokerage represent buyer and seller in the same transaction
Requirements for Dual Agency
| Requirement | Description |
|---|---|
| Written consent | Both parties must consent in writing |
| Disclosure | Full disclosure of the dual relationship |
| Neutrality | Agent must remain impartial |
| Limited advocacy | Cannot advocate for one party against the other |
Warning: Dual agency significantly limits what an agent can do for either party. Written consent and full disclosure are mandatory.
Duties to ALL Parties
Rhode Island law imposes certain duties on all licensees to all parties in a real estate transaction, regardless of which party they represent:
Universal Duties
| Duty | Description |
|---|---|
| Honesty | Deal honestly and in good faith with all parties |
| Fair dealing | Treat all parties fairly |
| Material facts | Disclose known material facts |
| Timely presentation | Present all offers in a timely manner |
| Account for funds | Properly handle all money and documents |
Confidentiality
Licensees must maintain confidentiality of:
- Client's motivation to buy, sell, or lease
- Client's financial information
- Terms the client is willing to accept
- Information requested to be kept confidential
Exceptions to confidentiality:
- Disclosure required by law
- Information becomes public knowledge
- Client authorizes disclosure in writing
Personal Interest Disclosure
A licensee must disclose when acting on behalf of:
- The licensee themselves
- The licensee's family members
- Any entity in which the licensee has a financial interest
Key Rule: Personal interest disclosure must be made to ALL parties to the transaction.
Compensation Disclosure
If a licensee receives compensation from more than one party:
| Situation | Requirement |
|---|---|
| Compensation from one party | Standard - no special disclosure |
| Compensation from multiple parties | Must disclose to ALL parties in writing |
What type of agency exists when one Rhode Island licensee represents both the buyer and seller in the same transaction?
Which duty does a Rhode Island licensee owe to ALL parties in a transaction?