Introduction to the New Property Condition Disclosure Act in New York
The new Property Condition Disclosure Act set to go into effect on March 20, 2024, in New York, introduces several significant changes to residential real estate transactions, specifically with regards to seller disclosures and liabilities. This law mandates that sellers of residential properties, excluding cooperative apartments, condominium units and a few others, complete and provide a Property Condition Disclosure Statement (PCDS) to the buyer or the buyer’s agent before the signing of a binding contract of sale. Notably, it eliminates the option previously available to sellers to opt out of providing this disclosure by instead offering a $500 credit to the purchaser at closing.
Importance of Consulting a Real Estate Lawyer in New York
For more detailed guidance and to understand the full scope of the changes, consulting with a Real Estate Lawyer who is well-versed in New York real estate law is advisable. A qualified attorney can provide in-depth understanding and ensure compliance with the new regulations.
Expanded Queries in the Revised PCDS
The revised PCDS now includes expanded queries, particularly about flooding and leaks. Sellers must disclose whether the property is in a FEMA-designated 100-year or 500-year floodplain, if it is obligated to comply with federal flood insurance requirements, and the property’s flood insurance history, among other flood-related information. This change aims to arm buyers with more comprehensive information regarding the property they are considering purchasing, including its flood risk, indoor mold history, and the condition of its structural and mechanical systems.
Seller Liability Under the New Law
Regarding seller liability, the law specifies that sellers who willfully fail to provide the PCDS to a purchaser can be held liable for actual damages suffered by the purchaser. This means that if a seller knowingly omits or misrepresents information on the PCDS that results in a financial loss for the buyer, the seller could be responsible for compensating the buyer for those losses. However, it’s important to note that sellers are not required to conduct any inspections to answer the questions on the PCDS; they are only required to complete the PCDS to the best of their actual knowledge.
The Removal of the $500 Credit Option
The removal of the $500 credit option signifies a clear intent by New York lawmakers to ensure that buyers receive all pertinent information directly from sellers, thereby making informed decisions about their property purchases. New York Real Estate attorneys should keep up to date with these changes and advise their clients accordingly. Sellers and real estate agents must familiarize themselves with the updated PCDS form and requirements to ensure compliance and avoid potential liabilities.
Legal Considerations
The recent changes to the Property Disclosure Act in New York represent a significant shift in residential real estate transactions. Real Estate Lawyers in New York play a crucial role in helping clients navigate these changes. Sellers and real estate agents must familiarize themselves with the updated PCDS form and requirements to avoid potential legal issues. Contact Pun and Associates for a free consultation regarding these new changes in the Property Disclosure Act in New York.
