Disclosures In Real Estate: What Is A Seller Required To Disclose In A New York Property Sale?
Property sales are one of the most important – but complex – transactions one can be involved with. For the seller, there is the preparation and anxiety associated with putting a home on the market and getting it ready to show. For the buyer, there is the process of viewing homes and ultimately selecting what may be their “dream home”. Along the way, there are a number of important steps involved and information to be exchanged between both parties. Failure to complete certain responsibilities in a real estate transaction can lead not only to a broken deal, but to legal ramifications and added costs.
New York’s Law on Property Condition Disclosures
One critical responsibility for sellers is compliance with mandatory property condition disclosures under New York’s Property Condition Disclosure Act. This law requires sellers of property to disclose important information known to the seller during the sale of a home. The law only applies to sales of residential homes — residential property that holds one to four families and is intended to be used as a residence.
The PCDA involves disclosure of known hazards such as lead paint, pest infestations, foundational issues, electrical hazards, or toxic substances on the premises. It can also include disclosure of any disputed property boundaries, location on a floodplain, or other exterior issues a homeowner may face.
Knowingly making false statements to the buyer, or omitting information about known defects can violate this law and subject sellers to litigation under New York’s common law as well. The traditional rule of caveat emptor – “buyer beware” – only applies to defects unknown to both buyer and seller, or not readily discoverable upon inspection.
The property condition disclosure statement must be delivered to the buyer or their agent prior to closing. If a seller fails to submit disclosure statements to the buyer under New York’s PCDA, must pay the buyer a statutory fee of $500, usually as a credit at closing. Paying the $500 fee does not necessarily absolve the property seller of legal responsibility, should a known or latent defect later be discovered by the buyer. For example, a seller’s active concealment of a defect such as mold or flooding issues can subject a seller to legal liability – including actual damages incurred by the buyer.
It is important at this stage to discuss all options with an experienced real estate attorney that can discuss issues related to property disclosures. Whether you are a seller or buyer, speaking to someone with a firm knowledge of required disclosures and possible repercussions from non-disclosures can facilitate a smooth real estate sale.
Contact Our New York Real Estate Attorneys Regarding Real Estate Disclosures
Selling a home can be a detailed and time-consuming process for all involved, and this includes critical disclosures. If you are selling or buying, you need to know your rights and responsibilities. Our Real Estate Attorneys can help you get a better understanding of this aspect of the process, potentially saving legal headaches down the road. Call our Bronx office at 718-822-2203, or our Westchester office at 914-235-8500. You can also contact our Bronx & Westchester real estate attorneys online and request a consultation in our office today.