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On March 20, 2024, a new law came into effect which significantly modifies the New York Property Condition Disclosure Statement (PCDS) which replaces and modifies a law that has been on the books since 2002. This law applies to sales of residential real estate, (residential real estate means a 1-4 family dwelling used or intended to be used as a residence; unimproved land, condos, coops and HOA sales are not covered.)
Several new questions related to flooding and mold issues were added to the typical structural and mechanical ones contained in the prior PCDS.
Previously, the PCDS could be exempted or basically ignored by a seller if the seller gave the buyer a credit of $500 in place of completing and delivering a PCDS. This provision has now been eliminated. That credit was basically a discharge of liability on the part of the seller. The elimination of the $500 credit could have legal implications for a home seller who intentionally deceives or provides false statements in the PCDS since the new law requires its delivery prior to the execution of the contract. The law is clear – A knowingly false or incomplete statement by the seller on this form may subject the seller to claims by the buyer prior to or after the transfer of title-. We can assume that lawyers representing buyers would like the PCDS to be added to the contract of sale. It is uncertain if the requirement can be waived.
It is very important to keep in mind that the PCDS is not a substitute for any professional inspections or tests that buyers should conduct prior to buying a house. It is also not a warranty of any kind by the seller or its agents. The PCDS is mandatory and cannot be avoided except in very limited situations.
We all have questions regarding how this law is going to impact the industry. It is too early to tell. The only suggestion we have for our selling clients is fill out the PCDS to the best of your knowledge. Include evidence of any improvements, repairs or claims pertaining to the property. If you owned and maintained your property with pride, chances are you have nothing to worry about.
