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This content has been reviewed and updated on 2/18/2021

Under the Property Condition Disclosure Act (PCDA) of 2002, New York's real estate law requires sellers to reveal known issues with their properties. Learning more about its statutes can protect you from lawsuits as the home selling process unfolds. 

What Is the Procedure for Completing a Disclosure Statement? 

Every residential seller must complete a standardized disclosure form. Under state law, you must reveal the age of the home and previous owners. If there's a nearby flood plain that could impact living conditions, include it on the questionnaire. Inform buyers of any existing damage from water, smoke, or insects. Other areas to discuss include the home's drainage system, water quality, and roof condition. 

Once complete, your signature will certify that the disclosures are accurate as of the listed date. Deliver the completed statement to the listing broker, the buyer, or their agent. 

Is a Seller Allowed Not to Disclose?

New York State's real estate laws don't require sellers or buyers to hire a home inspector. Additionally, sellers don't have to inspect the home themselves. They can also provide buyers a $500 credit to skip the disclosure form, expediting the process. However, if both parties share a close relationship, like parent and child or attorney and client, the seller can be liable for the undisclosed defects. 

While an official inspection isn't necessary, sellers must still disclose any known property defects. The homebuyers are the ones who are urged to hire an inspector as the purchasing process unfolds. However, if the inspector determines that the sellers actively concealed home defects, they can face legal consequences. In New York, active concealment includes knowingly deceiving the buyer about issues with the property and impeding the buyer's attempts at discovering the flaws through inspection. 

What Are the Disclosure Exemptions? 

Court Orders

Home sellers are exempt from filing a disclosure statement if the property transfer happens under specific circumstances. The court can order a property transfer in bankruptcy, foreclosure, divorce, probate, or partition cases. Additionally, the seller doesn't have to file a disclosure statement if the property will be transferred to the state or local government.

Estate Planning

A decedent may wish to distribute the property in a trust or transfer it under a conservatorship or guardianship. In these instances, the seller doesn't need a disclosure form. 

Similarly, if the seller is transferring the property to a home co-owner or a spouse or direct relative, a statement doesn't need to be filed. 

Mortgage Changes

Some homeowners will transfer the property to their lender as mortgage compensation or to prevent a foreclosure on the house. While the transfer doesn't require a disclosure statement, sellers should contact a debt relief or home foreclosure attorney to streamline the process and mitigate the overall impact on their finances. 

 

Simplify the home selling process by working with Robert A. Schwartz of Rochester, NY. Serving the surrounding metropolitan area, this attorney has practiced real estate law since 1982. He recognizes the unique aspects of each case and ensures sellers are as protected from litigation as possible. With a thorough understanding of contracts, inspections, and negotiations, he's ready to help. Call (585) 334-4270 to set up a consultation, or visit his website to learn more about his work with real estate.

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