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5/29/2025
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Senate passes LaMountain bill to protect homeowners from predatory real estate schemes
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STATE HOUSE — The Senate today approved legislation introduced by Sen. Matthew L. LaMountain (D-Dist. 31, Warwick, Cranston) to prohibit an unfair real estate practice that is often targeted at older homeowners, sometimes resulting in a lien against their property or other problems.
The bill (2025-S 0133A) would prohibit the use of service agreements that are unfair to an owner of residential real estate or to persons who may become owners of that real estate in the future.
“This stops real estate companies from offering a small cash payment to homeowners in exchange for the exclusive rights to list their home in a set period, sometimes up to 40 years, sometimes putting a lien on their property for that time, often with a penalty on the agreement that amounts to 3 percent of the total property value,” said Senator LaMountain, who chairs the Senate Judiciary Committee. “It leads to homeowners being trapped in binding contracts that they may not fully comprehend. This bill would stop a horrible predatory real estate practice.”
The act would also prohibit the recording of such agreements so that the public records will not be clouded by them, and future owners will not be put to the burden of bringing suits to remove them from their chains of title. It also provides remedies for owners who are inconvenienced or damaged by the recording of such agreements.
Matt Netto, associate state director of advocacy for AARP Rhode Island, testified in favor of the legislation, telling the Senate Judiciary Committee, “Older Rhode Islanders have spent a lifetime building equity in their homes. Their house is often their greatest asset. Without adequate protections against unfair service agreements, they could lose a significant portion of the equity they’ve worked so hard for. Older adults can be especially vulnerable and need extra safeguards in order to be protected from such an unfair, deceptive, and abusive practice. Furthermore, failing to disclose or misleading consumers about the way that these agreements for future services will slow or prevent a consumer from refinancing or tapping into their home equity — denying them either the opportunity to save money or to access much-needed capital.”
The measure now moves to the House, which has passed companion legislation (2025-S 5185A) introduced by Rep. Susan R. Donovan (D-Dist. 69, Bristol, Portsmouth).
For more information, contact:
Daniel Trafford, Publicist
State House Room 20
Providence, RI 02903
(401)222-1922
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