If you are a property owner or considering buying a property, you should be aware of some new laws in place. This past September 2023, Governor Hochul signed into law a bill that significantly amended the NYS Property Condition Disclosure Act. These changes will be effective on March 20, 2024.
There are several disclosures a seller must complete when selling their property, the NYS Property Disclosure is one that should not be taken lightly. The questionnaire regards a property’s history including its age, features, and any material defects the seller is aware of; this disclosure must be given to any potential buyer prior to signing a contract of sale.
In the past, sellers have had the option to either complete the 48 questions or in lieu of completing, give a $500 credit at closing. Most attorneys have advised their clients to simply pay the $500, and most sellers took that path. The newly amended law has been one of “caveat emptor”, let the buyer beware, which allowed the seller the option not to disclose any details about a property till now, starting March 20, 2024, a seller must disclose.
How does the seller actually respond to these questions? The questionnaire’s option to answer is either “yes,” “no,”, “not applicable,” or “unknown.”. The seller must answer the questions based upon their actual knowledge at the time of signing the disclosure statement.
The seller is under no obligation to conduct any type of inspection of the property or to check public records in an effort to complete the disclosure statement. This is NOT a warranty and the disclosure statement strongly urges buyers to have a home inspection performed as well as other professional and environmental tests.
Some properties are exempt: new construction , condos and coops, foreclosed properties, multi-family dwellings ( 5 + units), vacant land, Transfer due to estate sale, bankruptcy, eminent domain.
New York is not the only state with this mandated disclosure, there are over 30 states with property disclosure laws. Additionally, and just as important, is another disclosure, the New York Flood History Disclosure, a seller must disclose if they have experienced flooding or is at risk of flooding in the future.
These seller disclosures ensure transparency and fairness in real estate transactions, all aiming to protect buyers from purchasing a property with undisclosed issues that could potentially affect its value or present risks in terms of safety including health concerns.