An Important Change in the Law that Affects Sellers and Buyers of Residential Real Property – The Property Condition Disclosure Statement Requirement

A recent amendment to the New York State Real Property Law (“RPL”) means that starting March 20, 2024, Sellers of residential real property in the state of New York will no longer be able to give their Buyer a $500 credit at closing in lieu of a completed Property Condition Disclosure Statement (“PCDS”).

Before the amendment, a Seller had the option to provide a Buyer with a completed PCDS – a form that lists any defects or conditions at the property to be sold that the Seller is aware of – or give the Buyer a $500 credit at closing instead of the completed PCDS. In New York City and surrounding counties “downstate” it is an extremely rare occurrence for a Seller to give the Buyer the completed PCDS and not the $500 closing credit.

Under the RPL as amended, virtually all Sellers of residential real property will be required to provide Buyers with a completed PCDS prior to signing a residential contract of sale.

Because a Seller may be liable for incorrect information on the PCDS or information not disclosed on the PCDS, Sellers should seek attorney guidance before completing and delivering the PCDS and to insert “as is,” merger and non-survival clauses in their contracts to protect them against liability.

On the Buyers side, that a Seller provided a completed PCDS does not remove the Buyer’s duty to perform all necessary and appropriate property inspections and tests.

If you are selling or buying residential real property and have any questions regarding the amendment to Real Property Law Sections 465 and 467, please do not hesitate to contact us.

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