Did you have an ownership interest in a limited liability company (LLC)?   If you’re buying or selling real estate through a LLC, a corporation, other business entity or a trust, Rhode Island Commercial Licensing Regulation 230-RICR-30-20-2 requires you to disclose your ownership interest in writing to the buyer or seller on the other side of the transaction.

• Is disclosure required if I’m not being paid? Yes. The regulation requires disclosure even if there is no compensation.
• What is the deadline for disclosure? Disclosure must be made “at the first (1st) point of personal contact, but no later than making an offer to purchase.” The safest option is to disclose up front, but the regulation allows you to wait until the time that an offer or purchase and sales agreement is presented.
• How do I disclose my interest? The regulation only requires that the disclosure be in writing.You could use the RIAR Disclosure of Personal Interest or Family Relationship form and/or disclose in “Additional Provisions” in a purchase and sales agreement or letter of intent. If you are listing a property owned by a business entity in which you hold an interest and disclose this only in Multiple Listing Service, keep in mind that you will not be able to prove that the buyers ever saw your disclosure. Some REALTORS® have asked whether they can email or text a disclosure.   Whatever method you use, you will need to show that all buyers or all sellers received your disclosure.
• Must I disclose if I only own a tiny interest in the business entity? Yes. The regulation requires disclosure “regardless of the percentage or type ownership.”

For more information, please contact the RIAR Legal Department at 401-432-6945 or [email protected].