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HB 7840

AN ACT RELATING TO BUSINESSES AND PROFESSIONS -- REAL ESTATE BROKERS AND SALESPERSONS

2026 Regular Session Introduced by Jackie Baginski and 2 co-sponsors

Rhode Island HB 7840 creates a new licensing and consumer-protection framework for real estate wholesaling, including disclosures, three-day rescission rights, and penalties.

06/23/2026 Signed by Governor
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WeVote Research Nonpartisan
Bill Summary · HB 7840

Summary of HB 7840 (Rhode Island, 2026) – Real Estate Brokers and Salespersons

Overall purpose

HB 7840 would expand licensing requirements and introduce new regulatory provisions for individuals and entities engaged in certain real estate activities, with a particular focus on wholesaling of real estate. The bill clarifies who must be licensed, creates a new public chapter on wholesaling, and establishes consumer protections, disclosure duties, cancellation rights, and penalties for violations. It takes effect January 1, 2027.

Key provisions and changes

Amendments to existing Real Estate Brokers and Salespersons chapter (Chapter 5-20.5)

  • Definitions expanded: The bill refines terms such as “real estate broker,” “real estate salesperson,” and “opinion of value,” and reiterates that the real estate professional scope includes leaseholds and various estates in land, both in-state and out-of-state.
  • Director and exemptions: The “Director” is defined as the Director of the Department of Business Regulation. It preserves existing exemptions from licensing (e.g., certain property management activities by owners or employees, and certain non-brokerage activities) but clarifies the scope of who is excluded from mandatory licensing.
  • Association broker and salesperson roles: The definitions apply to licensees acting as associates or salespersons under licensed brokers.

New Chapter: Wholesaling of Real Property (Chapter 34-51)

A new statutory framework dedicated to real estate wholesaling, including:

  • Definitions (34-51-1):

    • “Wholesaler” means someone who facilitates the sale of a property’s equitable interest prior to taking legal title for financial gain (more than once in a 12-month period).
    • “Wholesale contract” and “assignment contract” defined to describe agreements where the wholesaler does not take title but coordinates sale to a third party.
    • Broad definitions of “real estate” and “person.”

  • Licensing requirements (34-51-2):

    • Wholesalers must hold a valid Rhode Island real estate license or qualify for exemptions under the existing licensing chapter (5-20.5-2).

  • Contract disclosures and protections (34-51-3 to 34-51-4):

    • Wholesale contracts must disclose that the contract may be assigned for compensation.
    • Contracts must include a three-business-day right for sellers to consult an attorney and cancel without penalty (deposit refunded, if any).
    • Assignment contracts must similarly disclose equitable interest and include a three-business-day consulting/cancellation period.

  • Rights of cancellation (34-51-5):

    • Transfers or assignments may not occur until the respective three-day cancellation periods have expired.
    • The cancellation right cannot be waived.
    • If essential disclosures are missing, parties may cancel without penalty, with deposits refunded.

  • Penalties (34-51-6):

    • First offense: $500 fine; subsequent offenses: $1,000.
    • Civil liability for any money received in violation (amount not less than the fee received and up to three times that amount).

Affected parties

  • Wholesalers and buyers/sellers of real estate interests: Those engaged in securing, negotiating, or facilitating the sale of equitable interests via wholesale or assignment contracts.
  • Real estate licensees: Those who operate as brokers or salespersons, or who facilitate wholesaling, must hold appropriate licensing and adhere to disclosure and cancellation requirements.
  • Property owners in Rhode Island: Provided enhanced protections in wholesale transactions, including mandatory disclosures and cooling-off periods.

Timelines and effective date

  • The bill provides that the act shall take effect January 1, 2027.
  • The current action history shows committee consideration and scheduling activities in 2026, with referral to House Corporations and subsequent committee actions.

Implications

  • Creates a clearer regulatory pathway for real estate wholesaling, closing potential loopholes by requiring licensing and explicit consumer protections.
  • Introduces mandatory disclosures and a three-day right to rescind for both wholesale and assignment contracts, curbing aggressive or unclear wholesale tactics.
  • Establishes penalties and potential civil liability to deter noncompliance.

If you’d like, I can provide a side-by-side comparison with existing Rhode Island real estate licensing rules or draft a one-page briefing for stakeholders.

Compiled from official sources — confirm details with the bill’s official record.

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