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Bill would bar long exclusive ‘‘service agreements’’ that lock homeowners into future listings
Summary
House Bill 5185 would bar real-estate service agreements that the sponsor and advocates say are unfair to homeowners and can restrict refinancing or transfers.
House Bill 5185 would prohibit residential real-estate service agreements that the sponsor and advocates characterized as unfair to homeowners, particularly older owners. Chairwoman Donovan told the House Judiciary Committee that agreements offering upfront cash in exchange for exclusive listing rights for extended periods — up to decades in some cases elsewhere — can impede refinancing or inheritance transfers and impose large penalties for early termination.
Matt Neto of AARP Rhode Island testified that the practice can be a ‘‘bait-and-grab’’ and cited examples where a homeowner who accepts a cash payment of a few thousand dollars could face termination fees equal to 3 percent (or more) of home value when seeking to refinance or transfer the property. Neto said similar laws have passed in roughly 30 states as of October 2024 and that industry groups collaborated on model language.
Donovan and witnesses said the bill is intended to protect older homeowners who may be targeted by aggressive marketing and complex contract terms. There were no objections recorded in committee testimony; the committee concluded oral testimony and placed the bill in play for future consideration.
