Condo Media - May 2018 - 48

The Region

RHODE ISLAND

Pressing
Matters

The Rhode Island LAC
has an Eye on These Laws
[by Frank Lombardi, Esq., CCAL]

For this month's Rhode Island
article, I would like to present a status
report regarding CAI's Rhode Island
Legislative Action Committee's
(RILAC) work on the 2017 and 2018
legislative sessions with regard to some
of the more significant bills that may
affect Rhode Island condominiums.
2017 H5097 CONDOMINIUM
DISPUTE RESOLUTION BILL
This bill would establish a mandatory
arbitration process to resolve certain
condominium disputes. The RILAC
committee opposed this bill out of
the gate and asked to meet with the
sponsoring state representative. The
representative listened to our objections and asked us to rewrite the bill
with language that would be more
palatable. After we forwarded our
proposed re-drafted bill to him, the
representative informed us that the
bill was being withdrawn. This was a
win for Rhode Island condominium
associations. Although this bill is withdrawn for now, it may not be gone for
good, and the RILAC will continue to
monitor for any resubmission.
2018 H7259 MANAGEMENT
CONTRACTS
This bill would require condominium
association board members to verify
that management agents or companies retained by the association are
insured with respect to the services
they provide to the condominium. In
particular, the bill's aim is to address a
concern regarding board member and

48

CONDOMEDIA

property manager theft of association
funds. While the RILAC does not
generally object to the idea of making
sure that all condominium associations and their respective property
managers have appropriate insurance
covering these thefts, the RILAC
opposed the bill because of language
imposing personal liability on board
members for their ultimate failure
to ensure this insurance coverage is
in place.  
Though the bill is well intentioned,
the RILAC believes that procedurally
it goes too far and may have a "chilling" effect on whether or not future or
existing board members will continue
to volunteer to serve on the board.
In other words, associations have a
hard enough time securing volunteers
to serve without having yet another
sword of Damocles, in the form of unnecessary liability exposure, hanging
over their heads. Accordingly, the RILAC objected to the bill in writing and
will present its arguments in person at
the hearing at the Legislature scheduled for late March or early April.
Initial hearings before the House Corporations Committee were postponed
and now the RILAC was advised that

the bill is currently in the hands of
the House Judiciary Committee for
review and scheduling.
2018 H7564/S2431
RESALE CERTIFICATES
This bill would impose a penalty
against the association for failing to
deliver a Resale Certificate (Rhode Island's version of Massachusetts's 6-d
certificate) within 10 days of a request
by a unit owner and establishes a
maximum fee of $125 for compiling a
resale certificate. The RILAC objected
to this bill for the simple reason that
due to the complexity of issues that
face many associations, for example,
lawsuits, major contract negotiations
involving substantially large amounts
of money, FHA and FNMA compliance and the like, very often an association must refer the matter to legal
counsel, which as many know can be
time consuming and expensive.
Given that this bill was introduced
at the behest of a Rhode Island realtor's group, we suspect that the main
impetus was not to have the resale
certificate hold up a closing on a unit's
sale. Again, while this is a laudable
goal, given the penalties already



Table of Contents for the Digital Edition of Condo Media - May 2018

Contents
Condo Media - May 2018 - Cover1
Condo Media - May 2018 - Cover2
Condo Media - May 2018 - Contents
Condo Media - May 2018 - 2
Condo Media - May 2018 - 3
Condo Media - May 2018 - 4
Condo Media - May 2018 - 5
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Condo Media - May 2018 - Cover3
Condo Media - May 2018 - Cover4
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