On March 1, 2002, the New York legislature enacted the Property Condition Disclosure Act. In essence, the legislature found a compromise to the growing pressure for a seller to disclose defect within the knowledge of the seller and the common law rule of “buyer beware”. Under the common law rule, a seller is not obligated to disclose any defects relating to the property.
Under the new law, at the option of the seller, the seller could complete the property condition disclosure form or in the alternative, offer $500 credit toward the purchase price. If the form is completed, any type of false statements or misrepresentation could lead to a potential lawsuit against a seller, even after the deed has been delivered to the purchaser.
The form has 48 questions that a seller must answer pertaining to the property. The law applies only to one to four family homes and does NOT apply to sales involving cooperatives, condominiums, vacant land, new construction, spouses, co-owners, government entities, and estates.
The form can be located at the New York Department of State website:
http://www.dos.state.ny.us/forms/licensing/1614-a.pdf
What does “as is” mean?
“As Is” means the seller is transferring the property to you exactly in the state that you see it in and the seller is not willing to do any repairs.
If the Seller completes the disclosure form, do I still need to get a home inspection?
A completed property condition disclosure form is not a substitute for a home inspection, so be sure to obtain a home inspection. A home inspection, prior to the execution of the contract of sale, gives purchasers the information necessary to fully evaluate the property to determine whether the property is suitable.
The seller refuses to complete the disclosure form, what should I do?
Just because a seller has not completed the form or refuses to do so, does not necessarily mean that there is something wrong with the home or that the seller is lying about the condition of the home. Remember, it is at the seller’s election to complete the disclosure form.
The seller completed the disclosure form and there is something wrong with the septic tank, do I have any recourse?
The answer is maybe. If the seller failed to disclose any known defects or concealed any defects at the time of completing the form, the purchaser may have a cause of action, even after the closing.
The seller did NOT complete the disclosure form and there is something wrong with the septic tank, do I have any recourse?
It depends on whether the seller willfully misrepresented any known defects which representations were incorporated into the contract of sale.