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H 7874Real Estate

Property - Oversight and Regulation of Management Committees

Establishes state registration, financial transparency requirements, and regulatory oversight for condominium management committees and property management companies.

Held for study
Population
Affected
28
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Introduced Feb 27, 2026Committee House Corporations

Plain-English Summary

This legislation establishes the "Oversight and Regulation of Management Committees Act" to regulate condominium management committees and property management companies. It requires these entities to file an annual registration with the Department of Business Regulation (DBR) and the local municipality, disclosing board members, budgets, and pending litigation. The bill mandates fiduciary duties, prohibiting financial misconduct such as embezzlement or commingling funds. Additionally, it grants condo unit owners the right to inspect records and file complaints. The DBR is empowered to investigate violations, issue subpoenas, and levy fines to ensure compliance.

For younger readers

This bill creates new rules for the groups of people or companies that manage condominium buildings (condos). A condo is like an apartment that you own. Sometimes, the managers don't do a good job or are not honest with the money the owners pay them. This law forces managers to sign up with the state government every year and share their budget. It also lets the people living there look at the records to make sure everything is fair. If the managers break the rules, the government can investigate them and fine them.

Who & Where It Applies

Impacted groups
Condominium Unit OwnersCondominium Management CommitteesProperty Management CompaniesCondo Board MembersDepartment of Business Regulation
Impacted communities
All

Constitutional & Fiscal Check

None Likely

Estimated cost
Amount unknown
Estimated revenue
Amount unknown

Bill Analysis

Both viewpoints
For Progressives
  • Protects condominium unit owners, who are often middle-class or working-class individuals, from financial exploitation and mismanagement by powerful management companies.
  • Increases transparency and accountability in housing governance by mandating open records and financial disclosures, ensuring residents know how their fees are spent.
  • Empowers the state government to intervene and investigate corporate malfeasance, providing a pathway for justice that does not rely solely on expensive private litigation.
  • May inadvertently increase administrative costs for smaller, self-managed condominium associations, potentially leading to higher fees for residents with limited incomes.
  • Relies on the Department of Business Regulation for enforcement, which may require increased public funding or resources to handle the new volume of oversight effectively.
  • Does not explicitly include provisions to stabilize housing costs or prevent management companies from raising fees to cover the cost of compliance.
For Conservatives
  • Strengthens the protection of private property rights by ensuring that the funds of unit owners are not embezzled or squandered by bad actors.
  • Upholds the rule of law by criminalizing fraud, forgery, and theft within property management, ensuring contracts and fiduciary duties are honored.
  • Promotes financial integrity and responsibility by requiring annual budgets and reserve studies, ensuring associations are managed with fiscal prudence.
  • Expands the size and scope of government by creating a new regulatory regime and giving the Department of Business Regulation broad investigative powers over private entities.
  • Imposes new bureaucratic red tape and reporting requirements on private associations and businesses, interfering with the free market operation of property management.
  • Grants the state government the authority to issue subpoenas and compel testimony from private citizens and board members, which may be viewed as government overreach.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 63 additions

SECTION 1. Title 34 of the General Laws entitled "PROPERTY" is hereby amended by adding thereto the following chapter: 34-36.2-1. Short title. This chapter shall be known and may be cited as the “Oversight and Regulation of Management Committees Act”. 34-36.2-2. Applicability. This chapter shall apply to any and all management committees in existence on or after July 1, 2026. 34-36.2-3. Definitions. The following terms and phrases are defined as follows:

(1) “Annual registration” means that registration required by § 34-36.2-4.

(2) “Condominium project” shall be defined as provided in § 34-36-3.

(3) “Department” means the department of business regulation.

(4) “Director” means the director of the department of business regulation.

(5) “Management committee” shall be defined as provided in § 34-36-3.

(6) "Property management company" means a person or entity hired by the management committee to manage operations.

(7) “Unit owner” shall be defined as provided in § 34-36.1-1.03. 34-36.2-4. Registration of management committees. Each management committee or its property management company shall file an annual registration with the department, a copy of which shall be filed with the office of land records for the municipality in which the condominium project is located. The annual registration shall include:

(1) Names and addresses of board members;

(2) Name of any property management company;

(3) Most recent annual budget;

(4) Most recent reserve study, if any; and

(5) A listing of any and all pending litigation in which the property management company, management committee, or any board member in his or her capacity as a member of the management committee, is involved. 34-36.2-5. Duties.

(a) Members of the management committee and/or agents of the property management company shall exercise the duties of good faith and loyalty in relation to unit owners.

(b) Members of the management committee and/or agents of the property management company are prohibited from:

(1) Failing, within a reasonable time, to account for or remit any monies coming into its possession which belong to unit owners;

(2) Conviction in a court of competent jurisdiction of this or any other state, of forgery, embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to defraud, or other like offense or offenses;

(3) Improperly commingling funds in an escrow or trustee account; or

(4) Commingling funds of different associations. 34-36.2-6. Transparency and access to records. The management committee and/or property management company shall maintain accurate financial and operational records of the condominium project, and unit owners shall have the right to inspect and obtain copies of records related to the condominium project. 34-36.2-7. Complaints, investigations, and enforcement.

(a) A unit owner may file a complaint with the department regarding violations of this chapter.

(b) In carrying out the provisions of this chapter, the director may conduct investigations, audits, or hearings as necessary; issue subpoenas; administer oaths; compel testimony; and order the production of books, records, and documents.

(c) If any person refuses to appear, to testify or produce any book, record, paper or document when so ordered, upon application of the department, a judge of the superior court may make such order as may be appropriate to aid in the enforcement of this section.

(d) The director may issue orders, fines, or corrective directives to ensure the compliance of management committees and property management companies with this chapter; provided, the director shall refer matters of a criminal nature to the office of the attorney general for investigation. 34-36.2-8. Rulemaking authority. The department is authorized to adopt rules and regulations necessary to implement this chapter. 34-36.2-9. Interpretation. The provisions of this chapter are intended to support, expand upon, and be consistent with the provisions of chapter 36.1 of title 34 (“condominium law”). To the extent there are any express conflicts between these chapters that cannot be resolved, the provisions of this chapter shall supersede any conflicting provisions in chapter 36.1 of title 34.

SECTION 2. This act shall take effect upon passage.