Rhode Island Real Estate Contracts: What the Exam Tests

Rhode Island contract law follows general real estate principles with state-specific features around judicial foreclosure and lead hazard disclosure.

Essential Elements Offer and acceptance, consideration, legal capacity (18+), legal purpose, in writing (Statute of Frauds).

Earnest Money - Salesperson delivers to broker by next business day; broker deposits promptly - 5-year record retention - Retained by seller if buyer defaults; returned to buyer if seller defaults or within contingency period

Rhode Island Mortgage and Judicial Foreclosure Rhode Island is a **mortgage state** — lenders use mortgages (not deeds of trust). The borrower retains legal title during the loan.

If a borrower defaults, the lender must pursue judicial foreclosure — a court-supervised process that is slower than the non-judicial trustee sales used in deed-of-trust states. This is a frequently tested Rhode Island distinction.

Transfer Tax in Contracts RI transfer tax ($2.28 per $500) is typically a seller's cost but can be negotiated. Contracts should address who pays the transfer tax and recording fees.

Lead Hazard Disclosure in Contracts For pre-1978 properties sold for use as rental housing, sellers/landlords must address lead hazard mitigation compliance in the transaction. Buyers purchasing rental property should confirm compliance status.

Common Exam Question **Q**: A Rhode Island lender wants to foreclose on a defaulted mortgage. What process must they use? **A**: Judicial foreclosure — Rhode Island requires court supervision of the foreclosure process.

[Practice Rhode Island contract questions at CARealestate.com/states/rhode-island](https://carealestate.com/states/rhode-island)