Beginning March 20, 2024, sellers of residential 1-4 family homes will no longer have the option to give purchasers a $500.00 credit in lieu of completing a property condition disclosure statement. The New York Real Property Law requires sellers of certain types of residential real property to complete a property condition disclosure statement and deliver it to a prospective buyer or buyer’s agent prior to the parties entering into contract. Customarily, sellers forgo this requirement and instead provide buyers with a $500.00 credit at closing to avoid the potential exposure to liability should an adverse condition arise post-closing and the buyer claiming misrepresentation.
It is important to note that the law does not apply to all sellers and not all types of transfers. Cooperative and condominium transfers and transfers made by fiduciaries continue to be exempt from its requirements. It is recommended that you speak to an attorney before you complete the property condition disclosure statement.
In September of 2023, Governor Kathy Hochul signed legislation that amends the law to include, among other things, disclosures regarding a property’s flood history and risks and repeals that provision of law that allowed sellers to provide the disclosure credit in lieu of disclosures.
The property condition disclosure statement is a list of a seller’s responses to questions regarding the property and its condition. The disclosures, made to the best of sellers’ knowledge, include information regarding a property’s structure, environmental condition, mechanical systems and rights of ownership, access and occupancy. A complete list of the questions can be found here: dos-1614-f-property-condition-disclosure-statement_01.2024.pdf (ny.gov). Although sellers will soon be required to deliver a property condition disclosure statement, buyers should not solely rely upon the statement but use it as an additional due diligence resource while continuing to hire professionals to perform the necessary inspections and title examinations.
Whether you are buying or selling, Daniels O’Connell PC can help you navigate the process, including the recent changes to the law concerning property condition disclosure statements. Contact us today regarding any questions you have relating to the sale or purchase of your home.