Escheat- When the state becomes the owner of your real estate and how to prevent it.

 

Escheat refers to the process by which property reverts back to the state or government when an individual dies without a will (intestate) and without heirs to claim the property or when certain types of property are abandoned. It's derived from common law traditions and exists to ensure that property is not left in "limbo" — it guarantees that all property will have a recognized owner.

According to Robert Scaralia Director of Education at the Real Estate Institute of Rhode Island the laws surrounding escheat vary from one state to another, but the underlying principle is the same: if property isn't claimed or passed on in a legally recognized way, it eventually goes to the state. This might include real estate, but can also encompass other assets like bank accounts, securities, and other personal property.

Importance of Preparing a Will:

1. Control Over Assets: A will is a legal document that dictates how an individual's assets should be distributed upon their death. Without a will, the state's intestacy laws will determine how assets are distributed. This might not align with the deceased individual's wishes.

2. Avoidance of Escheat: As mentioned, if someone dies without a will and without legal heirs, the property could escheat to the state. Preparing a will ensures that property goes to the intended beneficiaries rather than reverting to the government.

3. Minimize Family Disputes: A will provides clarity on the deceased person's wishes, which can help prevent potential conflicts or disputes among surviving family members.

4. Efficient Distribution: A well-prepared will can expedite the probate process, leading to a quicker distribution of assets to beneficiaries.

5. Designation of Guardians: For those with minor children, a will is vital to designate guardians in case both parents pass away.

6. Potential Tax Benefits: Depending on the jurisdiction, a properly structured will can also provide tax advantages or strategies for reducing estate tax liability.

In summary, escheat ensures that property always has a recognized owner in the absence of heirs or a will. However, to retain control over one's assets and ensure they're distributed according to personal wishes, it's essential to prepare a will. Not only does this safeguard an individual's assets from escheating to the state, but it also provides clarity, minimizes potential disputes, and can offer other benefits like tax planning.

For more information on real estate principles and practices contact the

Real Estate Institute of Rhode Island 401-943-8500 info@instituteRI.com www.InstituteRI.com

Common Questions about getting a Rhode Island Real Estate License

The top questions prospective students may want to know about Rhode Island real estate schooling and their answers:

1. What are the requirements for obtaining a real estate license in Rhode Island?

Answer: To become a licensed real estate agent in Rhode Island, you must complete a 45-hour pre-licensing course, pass a real estate exam, and submit an application to the Rhode Island Department of Business Regulation.

2. Are online real estate courses approved by the state of Rhode Island?

Answer: Yes, online real estate courses are approved by the state of Rhode Island. However, it's important to choose a reputable and accredited real estate school that is approved by the Rhode Island Department of Business Regulation.

3. How long does it take to complete the pre-licensing course?

Answer: The pre-licensing course offered by the Real Estate Institute of Rhode Island consists of 45 hours of instruction, you can choose day, night or weekend class schedules. The day classes can be completed in as little as 3 weeks.

4. What topics are covered in the pre-licensing course?

Answer: The pre-licensing course covers a variety of topics related to real estate, including contracts, property ownership, finance, appraisal, and real estate law.

5. Can I take the real estate exam online in Rhode Island?

Answer: Yes, the real estate exam can be taken online in Rhode Island through a state-approved testing provider.

6. What happens if I fail the real estate exam?

Answer: If you fail the real estate exam, you may retake the exam but you will need to pay the exam fee again for each retake.

7. Are there any continuing education requirements for real estate agents in Rhode Island?

Answer: Yes, licensed real estate agents in Rhode Island are required to complete 24 hours of continuing education courses every two years to maintain their license.

8. Can I complete my continuing education courses online?

Answer: Yes, you can complete your continuing education courses online through a state-approved provider.

9. What are the benefits of choosing the Real Estate Institute of Rhode Island?

Answer: The Real Estate Institute offers high-quality courses, experienced instructors, and access to student support services.

10. How much does it cost to go to school?

Answer: Tuition fee's typically range from $250-350 and often includes all books.

Ready to get started? Visit www.InstituteRI.com for more information.

Land Use Controls: A Dive into the Regulatory Framework of Real Estate Development

Understanding the Landscape of Land Use Controls

Land, as a fundamental component of the Earth's resources, plays a critical role in human sustenance, commerce, culture, and environmental equilibrium according to Robert Scaralia Director of Education at the Real Estate Institute of Rhode Island. As societies grow and urbanize, managing the use of land becomes indispensable. This leads us to the realm of land use controls.

What is Land Use Control?

Land use control refers to the policies and regulations set by local, state, or national authorities governing the use of land. This encompasses:

• Zoning ordinances, which categorize areas for specific uses like residential, commercial, industrial, or agricultural.
• Building codes, which specify structural requirements.
• Environmental regulations, designed to protect fragile ecosystems, maintain biodiversity, and ensure the sustainable use of natural resources.
• Historic preservation rules that protect cultural heritage.

Why Do Governments Have the Police Power for Land Use Controls?

1. Promotion of Public Welfare: The foremost goal of land use controls is the general welfare of the public. For instance, zoning ensures that noxious industries don't operate near schools or residential areas, thereby preserving public health.

2. Ensuring Sustainable Development: With increasing environmental concerns, governments employ land use controls to manage growth, reduce urban sprawl, and ensure that developments today don’t hamper the opportunities of future generations.

3. Economic Stability: Land use controls can stimulate or stabilize local economies by ensuring adequate commercial spaces, tourist attractions, and residential areas.

4. Preserving Aesthetic and Cultural Integrity: Historical preservation laws protect buildings and sites with cultural, historical, or architectural significance, thereby conserving the aesthetic and historical fabric of regions.

The Hierarchy of Control: Local, State, and National Levels

1. Local Level:

   • Zoning Ordinances: Local authorities define land use categories, and each category has specific permitted uses, conditional uses, and prohibited uses.
   • Building Codes: These codes ensure that structures are safe for occupancy and meet the region's specific needs.

2. State Level:

   • Environmental Regulations: States might enact laws protecting specific ecosystems, watersheds, or species.
   • Land Development Criteria: States might outline broader developmental goals or provide frameworks for local authorities.

3. National Level:

   • National Environmental Policy: This might include laws like the Clean Water Act or the Endangered Species Act in the United States, which provide broad guidelines for environmental protection.
   • Heritage and Historic Preservation: On a national scale, this can involve designating World Heritage Sites or other places of national importance.

Conclusion

Land use controls, though sometimes viewed as restrictive, are quintessential in ensuring that development aligns with broader societal, economic, and environmental goals. Balancing individual property rights with the collective needs of the community and the environment is no small task, but through comprehensive and adaptive land use controls, it becomes feasible. It's a testament to the foresight and adaptability of governance systems to ensure that land – the very ground upon which civilizations are built – is used judiciously and sustainably.

Author: Real Estate Institute of Rhode Island

Understanding Earnest Money Deposits: A Key Component in Real Estate Transactions

In our journey through the landscape of real estate, we're going to delve into a topic that is central to home buying yet often misunderstood - Earnest Money Deposits (EMD).

What is an Earnest Money Deposit?

According to Robert Scaralia, Director of Education at the Real Estate Institute the term may sound a bit obscure, but it's conceptually straightforward. An Earnest Money Deposit (also known as a good faith deposit) is an initial sum of money a buyer offers to demonstrate their serious intent to purchase a property.

In practice, after a buyer and a seller agree on a purchase price, the buyer will provide the EMD as part of their offer. The funds are typically held in an escrow account managed by the real estate brokerage, law firm, or title company until the transaction is finalized. The EMD is then typically applied towards the buyer's closing costs or down payment.

Why is Earnest Money Deposit Important?

There are several reasons why the EMD is a crucial component of a real estate transaction:

1. Assurance of Buyer's Commitment

The primary purpose of the EMD is to provide the seller with some level of confidence that the buyer is serious and committed to completing the transaction. It's an indication that the buyer isn't merely window shopping or making offers on multiple properties to see which one sticks. In a competitive market, a larger EMD can make an offer stand out to a seller who may have multiple bids.

2. Financial Protection for the Seller

If a buyer decides to walk away from the purchase without a legitimate reason (as outlined in the contract's contingencies), the seller has the right to keep the EMD as compensation for the time and opportunity lost. This helps to guard the seller against whimsical buyers and provides some financial protection for the time their property was off the market.

3. A Negotiation Tool for the Buyer

From the buyer's perspective, the size of the EMD can be a negotiation tool. A larger EMD might make a buyer's offer more attractive to a seller, especially in a competitive market. However, this should be balanced with the potential risk of losing that money if the deal falls through for a reason not covered by a contingency.

Remember, the terms and contingencies around the EMD should be clearly defined in the purchase agreement. Both buyers and sellers should understand these terms and be comfortable with them before signing.

In conclusion, an Earnest Money Deposit is an essential part of the real estate transaction process, providing assurance and protection for sellers while allowing buyers to demonstrate their serious intent. Understanding this concept can smooth your real estate transaction journey, whether you're a seasoned investor or a first-time homebuyer. As always consult with a real estate agent before giving a deposit.

Stay tuned for the Real Estate Institute of Rhode Island next deep dive into real estate concepts!

Till then, keep learning, keep growing.