A buyer's agent in Rhode Island is representing a client purchasing a home that was recently renovated. During the transaction, the agent discovers that several subcontractors who worked on the renovation have not been paid and may file mechanics' liens. The closing is scheduled in two weeks. Which action should the agent advise the buyer to take to best protect the buyer's interests under Rhode Island law?
Correct Answer
D) Require the seller to provide lien waivers from all contractors and subcontractors, and ensure title insurance is obtained before closing
Under Rhode Island's Mechanics' Lien Law (R.I. Gen. Laws § 34-28), unpaid contractors and subcontractors can file liens against the property that may survive a sale and cloud the buyer's title. The best protection for the buyer is to require the seller to obtain lien waivers (signed releases) from all contractors and subcontractors confirming they have been paid, and to obtain title insurance that will protect against any undiscovered or improperly filed liens. This is standard practice in Rhode Island real estate transactions involving recent construction.
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