When it comes to buying homes in New York State, purchasers tend to hear the terms “buyer beware” or “caveat emptor”. Under New York State law, a seller of residential real property either has to answer a forty-eight-question disclosure or they could “opt out” of providing the disclosure and give the purchaser a $500 credit at closing – until March 20, 2024, that is.
Sellers generally provide the credit on just about every non-exempt transaction since most are usually advised that purchasers have the responsibility of conducting their own pre-purchase due diligence regarding the condition of the home, i.e., their own inspection. Absent an active concealment or an intentional misrepresentation, the seller’s obligation to disclose anything related to the condition of the home is limited. However, a purchaser’s lack recourse against a seller for defects is likely coming to an end.
Changes to the State Property Condition Disclosure Act
In a change from New York’s longstanding rule of caveat emptor, on September 22, 2023 Governor Hochul signed into law a bill amending the state Property Condition Disclosure Act (“PCDA”). Effective March 20, 2024, sellers of non-exempt residential real property will be required to provide disclosures to all purchasers regarding the condition of the home and will no longer have the ability to “opt out” by providing the $500 credit.
In the disclosure statement, the seller is expected to detail all known defects relating to the property. A new version of the form adds seven new questions regarding flooding-related information. For example, whether the home is in a FEMA flood zone, required to be covered by flood insurance, and subject of claims made for flood damage. New York may now be known as “seller beware” jurisdiction.
However, the law expressly excludes cooperatives and condominium units – for now.
