Rhode Island 2025 Regular Session

Rhode Island House Bill H5185 Compare Versions

Version 1 (Old)

Version 2 (New)

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5		-	2025 -- H 5185 ~~SUBSTITUTE A~~
	5	+	2025 -- H 5185
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7		-	LC000749~~/SUB A~~
	7	+	LC000749
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9	9		S T A T E O F R H O D E I S L A N D
10	10		IN GENERAL ASSEMBLY
11	11		JANUARY SESSION, A.D. 2025
12	12		____________
13	13
14	14		A N A C T
15	15		RELATING TO PROPERTY -- PROHIBITION OF UNFAIR SERVICE AGREEMENTS
16	16		Introduced By: Representatives Donovan, Potter, Carson, Fogarty, Spears, McGaw,
17	17		Speakman, Shallcross Smith, Ajello, and Handy
18	18		Date Introduced: January 24, 2025
19	19		Referred To: House Judiciary
20	20
21	21
22	22		It is enacted by the General Assembly as follows:
23	23		SECTION 1. Legislative intent. 1
24	24		This act is intended to prohibit the use of service agreements that are unfair to an owner of 2
25	25		residential real estate who enters into such an agreement or to persons who may become owners of 3
26	26		that real estate in the future. The act also prohibits the recording of such agreements so that the 4
27	27		public records will not be clouded by them, and future owners will not be put to the burden of 5
28	28		bringing suits to remove them from their chains of title and provides remedies for owners who are 6
29	29		inconvenienced or damaged by the recording of such agreements. 7
30	30		SECTION 2. Title 34 of the General Laws entitled "PROPERTY" is hereby amended by 8
31	31		adding thereto the following chapter: 9
32	32		CHAPTER 50 10
33	33		PROHIBITION OF UNFAIR SERVICE AGREEMENTS 11
34	34		34-50-1. Definitions. 12
35	35		For the purposes of this chapter: 13
36	36		(1) “Service agreement” means a contract under which a person agrees to provide services 14
37	37		in connection with the maintenance of or purchase or sale of residential real estate. 15
38	38		(2) “Residential real estate” means real property located in this state which is used 16
39	39		primarily for personal, family, or household purposes and is improved by one to four (4) dwelling 17
40	40		units. 18
41	41		(3) “Recording” means presenting a document to a city or town clerk in the recorder of 19
42	42
43	43
44		-	LC000749~~/SUB A~~ - Page 2 of 4
	44	+	LC000749 - Page 2 of 4
45	45		deeds office for official placement in the public land records. 1
46	46		(4) “Service provider" means an individual or entity that provides services to a person. 2
47	47		(5) “Person” means a natural person, partnership, association, cooperative, corporation, 3
48	48		trust, or other legal entity. 4
49	49		34-50-2. Unfair service agreements. 5
50	50		(a) A service agreement is unfair under this chapter if any part of the service subject to the 6
51	51		agreement is not to be performed within one year after the time it is entered into and has any of the 7
52	52		following characteristics: 8
53	53		(1) The service agreement purports to run with the land or to be binding on future owners 9
54	54		of interests in the real property; or 10
55	55		(2) The service agreement allows for assignment of the right to provide service without 11
56	56		notice to and consent of the owner of residential real estate; or 12
57	57		(3) The service agreement purports to create a lien, encumbrance, or other real property 13
58	58		security interest. 14
59	59		(b) This chapter does not apply to: 15
60	60		(1) A home warranty or similar product that covers the cost of maintenance of a major 16
61	61		home system (for example, plumbing, HVAC or electrical wiring) for a fixed period; or 17
62	62		(2) An insurance contract; or 18
63	63		(3) An option or right of refusal to purchase the residential real estate; or 19
64	64		(4) A declaration created in the formation of a common interest community or an 20
65	65		amendment thereto; or 21
66	66		(5) A maintenance or repair agreement entered by a homeowners’ association in a common 22
67	67		interest community; or 23
68	68		(6) A mortgage loan or a commitment to make or receive a mortgage loan; or 24
69	69		(7) A security agreement under the UCC relating to the sale or rental of personal property 25
70	70		or fixtures; or 26
71		-	(8) Water, sewer, electrical, telephone, cable, or other regulated utility service providers; 27
72		-	or 28
73		-	~~(9) A monitoring services agreement associated with any unit or development qualifying~~ 29
74		-	~~as low-~~ ~~or moderate-income~~ ~~housing governed by chapter 53 of title 45 ("low and moderate income~~ 30
75		-	~~housing")~~. 31
76		-	~~(c) This statute does not impair the rights granted by the mechanics lien statute of this state,~~ 32
77		-	~~chapter 28 of title 34.~~ 33
78		-	~~34-50-3~~. ~~Unfair service agreements unenforceable.~~ 34
	71	+	(8) Water, sewer, electrical, telephone, cable, or other regulated utility service providers. 27
	72	+	(c) This statute does not impair the rights granted by the mechanics lien statute of this state, 28
	73	+	chapter 28 of title 34. 29
	74	+	34-50-3. Unfair service agreements unenforceable. 30
	75	+	If a service agreement is unfair under this chapter it is unenforceable. 31
	76	+	34-50-4. Deceptive practices. 32
	77	+	If a person enters into an unfair service agreement with a consumer, as defined in this 33
	78	+	chapter, that agreement shall per se be deemed a deceptive act under chapter 13.1 of title 6 34
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82		-	If a service agreement is unfair under this chapter it is unenforceable. 1
83		-	34-50-4. Deceptive practices. 2
84		-	If a person enters into an unfair service agreement with a consumer, as defined in this 3
85		-	chapter, that agreement shall per se be deemed a deceptive act under chapter 13.1 of title 6 4
86		-	(“deceptive trade practices”). 5
87		-	34-50-5. Recording prohibited. 6
88		-	(a) No person shall record or cause to be recorded an unfair service agreement or notice or 7
89		-	memorandum thereof in this state. 8
90		-	(b) Any person who records or causes to be recorded an unfair service agreement or notice 9
91		-	or memorandum thereof in this state shall be guilty of a misdemeanor. 10
92		-	(c) Notwithstanding the recording statute of this state, chapter 13 of title 34, the city or 11
93		-	town clerk in the recorder of deeds office may refuse to accept for recordation an unfair service 12
94		-	agreement as defined herein. 13
95		-	(d) If an unfair service agreement is recorded in this state, it shall not provide actual or 14
96		-	constructive notice against an otherwise bona fide purchaser or creditor. 15
97		-	34-50-6. Recording of court order. 16
98		-	If an unfair service agreement or a notice or memorandum thereof is recorded in this state, 17
99		-	any person with an interest in the real property that is the subject of that agreement may apply to 18
100		-	the superior court in the county where the recording exists to record a court order declaring the 19
101		-	agreement unenforceable. 20
102		-	34-50-7. Rights of recovery. 21
103		-	If an unfair service agreement or a notice or memorandum thereof is recorded in this state, 22
104		-	any person with an interest in the real property that is the subject of that agreement may recover 23
105		-	such actual damages, costs and attorneys’ fees as may be proven against the service provider who 24
106		-	recorded the agreement. 25
107		-	SECTION 3. This act shall take effect upon passage. 26
	81	+	LC000749 - Page 3 of 4
	82	+	(“deceptive trade practices”). 1
	83	+	34-50-5. Recording prohibited. 2
	84	+	(a) No person shall record or cause to be recorded an unfair service agreement or notice or 3
	85	+	memorandum thereof in this state. 4
	86	+	(b) Any person who records or causes to be recorded an unfair service agreement or notice 5
	87	+	or memorandum thereof in this state shall be guilty of a misdemeanor. 6
	88	+	(c) Notwithstanding the recording statute of this state, chapter 13 of title 34, the city or 7
	89	+	town clerk in the recorder of deeds office may refuse to accept for recordation an unfair service 8
	90	+	agreement as defined herein. 9
	91	+	(d) If an unfair service agreement is recorded in this state, it shall not provide actual or 10
	92	+	constructive notice against an otherwise bona fide purchaser or creditor. 11
	93	+	34-50-6. Recording of court order. 12
	94	+	If an unfair service agreement or a notice or memorandum thereof is recorded in this state, 13
	95	+	any person with an interest in the real property that is the subject of that agreement may apply to 14
	96	+	the superior court in the county where the recording exists to record a court order declaring the 15
	97	+	agreement unenforceable. 16
	98	+	34-50-7. Rights of recovery. 17
	99	+	If an unfair service agreement or a notice or memorandum thereof is recorded in this state, 18
	100	+	any person with an interest in the real property that is the subject of that agreement may recover 19
	101	+	such actual damages, costs and attorneys’ fees as may be proven against the service provider who 20
	102	+	recorded the agreement. 21
	103	+	SECTION 3. This act shall take effect upon passage. 22
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113		-	LC000749~~/SUB A~~ - Page 4 of 4
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114	110		EXPLANATION
115	111		BY THE LEGISLATIVE COUNCIL
116	112		OF
117	113		A N A C T
118	114		RELATING TO PROPERTY -- PROHIBITION OF UNFAIR SERVICE AGREEMENTS
119	115		***
120	116		This act would prohibit the use of service agreements that are unfair to an owner of 1
121	117		residential real estate who enters into such an agreement or to persons who may become owners of 2
122	118		that real estate in the future. The act would also prohibit the recording of such agreements so that 3
123	119		the public records will not be clouded by them, and future owners will not be put to the burden of 4
124	120		bringing suits to remove them from their chains of title and provides remedies for owners who are 5
125	121		inconvenienced or damaged by the recording of such agreements. 6
126	122		This act would take effect upon passage. 7
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