Prohibits the use of service agreements that are unfair to an owner of residential real estate who enters into such an agreement or to persons who may become owners of that real estate in the future.
S0133 creates a new chapter in Rhode Island property law to prohibit certain “unfair service agreements” tied to residential real estate. The bill targets contracts for services connected to the maintenance, purchase, or sale of one- to four-unit residential property when those agreements extend beyond one year and attempt to bind future owners, allow assignment without the owner’s consent, or create a lien, encumbrance, or other real property security interest. The legislation is aimed at preventing these agreements from clouding title and burdening future owners with litigation to clear the public record.
The bill also specifies several exclusions, including home warranties, insurance contracts, options or rights of first refusal, common-interest-community declarations and HOA maintenance agreements, mortgage-related agreements, UCC security agreements, regulated utility services, and certain low- and moderate-income housing monitoring agreements. It further preserves mechanics lien rights under existing law. If an agreement is deemed unfair, it is unenforceable, and if entered into with a consumer it is treated as a deceptive trade practice under Rhode Island’s deceptive trade practices law.
The bill adds a new chapter to Title 34 of the General Laws and directly affects how service providers, property owners, title holders, and future purchasers may structure and enforce residential service contracts. It bars recording of covered unfair agreements in land records, authorizes clerks to refuse such filings, removes any actual or constructive notice effect if recorded, and allows interested parties to seek a court order declaring the agreement unenforceable. It also creates a misdemeanor penalty for recording or causing the recording of a prohibited agreement and allows recovery of actual damages, costs, and attorneys’ fees against the service provider who recorded it.
The available voting history shows strong bipartisan support and no recorded opposition: the Senate passed the bill 35-0 on May 29, 2025, and the House passed it in concurrence 71-0 on June 10, 2025. With no committee transcript available, the overall sentiment appears broadly favorable, likely reflecting concern about abusive real-estate service contracts and the need to protect homeowners and title records.
The main policy issue addressed by the bill is the risk that certain long-term service contracts can function like hidden encumbrances on residential property, especially when they purport to bind future owners or create recorded interests. The bill’s exclusions suggest some potential sensitivity around avoiding unintended effects on legitimate financing, utility, HOA, warranty, insurance, and common-interest-community arrangements. However, the unanimous votes indicate little visible controversy in the legislative record provided.