Q. What is a condominium and how is it formed?
In Rhode Island, a condominium is any real estate project that includes individually owned units (i.e., a residential unit) and common elements (i.e., general common elements and limited common elements) owned by the owners of the unit as tenants in common.
A condominium is created in Rhode Island by registering a condominium declaration with the appropriate office in the city or town where the project is located. The declaration must be drafted in accordance with the Rhode Island Condominium Law (the “Law”) for all condominiums created after July 1, 1982.
Q. What are bylaws?
The bylaws are the rules of the condominium. The statutes are enforced by the elected officials of the association. The statutes can be changed with a certain percentage of votes of the owners of the units of the association. A buyer should always review the bylaws carefully before entering into a purchase and sale agreement. Buyers are sometimes surprised to learn that association representatives can enter the buyer’s unit; No pets allowed; o A buyer may not alter the exterior of their unit without the association’s permission.
Q. What is a condominium unit? What is a general common element? What is a limited common element?
A condominium unit (ie, residential living space) is the area in which the owner of a unit has exclusive ownership interests.
A general common feature is owned by all unit owners as tenants in common with each other and all unit owners have the right to use and enjoy a general common feature (ie, a road).
A limited common element of a condominium is owned by all unit owners as tenants in common with one another. However, only one unit owner or a specific, limited group of unit owners is entitled to use and enjoy a limited common element (ie, a patio, driveway, or porch).
Q. What is a condominium purchase agreement?
A condominium purchase agreement is a contract to buy and sell a unit. Many residential sellers will use a standard purchase and sale agreement form. However, there are many different buy and sell contracts available. It is always a good idea to have an attorney experienced in condominium law review or draft a sales contract prior to signing the contract.
Q. What is a public offering statement?
A public offering statement is a summary of the statement and includes important information related to the condominium. A public offering statement must be completed in accordance with the Rhode Island Condominium Law for all condominiums created after July 1, 1982. A buyer has the right to cancel the purchase and sale agreement within 10 days after receipt of the public offering statement. A seller who is required to provide a public offer statement to the buyer will face the penalties prescribed by the Act if the seller fails to provide a public offer statement.
Q. Is a public offering statement required prior to closing for all condominiums?
A public offer statement is required by any declarant or person who is in the business of selling real estate when said declarant or person offers a unit for sale on their own account to a purchaser of a condominium unit.
A public offering declaration is not required in the following cases: i. if the condominium contains 12 units or less, is not subject to further development rights, and the declarant has owned the units for more than 2 years from the date of first sale; and ii. non-residential projects where all units are non-residential or in residential projects where waived by agreement; and in the following cases: transfer or transfer by donation; short order; by a government agency; foreclosure or in lieu of foreclosure; disposition or transfer to a person in the real estate business who intends to resell the unit; and when the sales contract can be terminated without penalty by the buyer.
Q. What is a condo resale certificate? When is a pre-closing resale certificate required?
The association prepares a resale certificate at the request of a unit owner who is selling their unit. The resale certificate contains important information and must be drafted in accordance with the Rhode Island Condominium Law.
A resale certificate is required for all sales where a public offering statement is not required. However, a resale certificate is not required if a public offering statement is exempt as explained in the previous question.
