Broker Fiona in Rhode Island operates a flat-fee limited service brokerage. She charges sellers a flat fee of $1,500 to list their property on the MLS and provides no other services. A seller signs Fiona's limited service listing agreement and later complains that Fiona did not assist with negotiations. Under Rhode Island law, which statement is most accurate?
Correct Answer
B) Fiona's flat-fee model is permissible, but she must disclose in writing the specific limited services she will provide
Rhode Island law permits limited service and flat-fee brokerage arrangements. However, under R.I. Gen. Laws § 5-20.5 and the agency disclosure requirements of § 5-20.6, brokers offering limited services must clearly disclose in writing the specific services they will and will not provide. As long as Fiona's agreement clearly defined the scope of services as MLS listing only, she has fulfilled her contractual and legal obligations.
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Related Topics & Key Terms
Key Terms:
Related Concepts
In real estate, the distinction between an independent contractor and an employee determines tax treatment, liability, and the level of control a broker may exercise over the agent's daily activities. Most real estate agents operate as independent contractors.
Florida real estate licenses must be renewed biennially, and sales associates have specific post-license education requirements for their first renewal.
License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
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