Property Management
In Rhode Island, what is 'key money' and is it legal?
AA fee for providing building access keys; it is legal
BAn under-the-table payment demanded by a landlord or manager from a prospective tenant as a condition of renting; it is generally prohibited✓ Correct
CA security deposit alternative
DA cleaning fee for the unit
Explanation
Key money is an illegal payment demanded by a landlord or their agent as a condition of renting a unit—essentially a bribe. It is prohibited under Rhode Island law and fair housing regulations, as it can also be used to discriminate against protected classes.
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Key Terms to Know
Earnest Money
A deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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