On September 22, 2023, Governor Hochul signed into law a bill that significantly amended the state Property Condition Disclosure Act (PCDA). The changes become effective on March 20, 2024. A
The PCDA amends the traditional rule of caveat emptor which provides that a seller as no duty to disclose any information about a residential or commercial property absent a fiduciary relationship or some conduct that constitutes active concealment, affirmative misrepresentation or partial disclosure. The original version of the PDCA required sellers to deliver a 48-question Property Condition Disclosure Statement (PCDS) to the purchaser of residential property prior to signing a binding contract of sale or to give a $500 credit to the purchaser at the closing in lieu of providing the PCDS.
Soon after the law went into effect in 2002, a divide occurred in New York real estate transactions with real estate lawyer in the New York City metropolitan area advising sellers to give the purchaser the $500 credit rather than provide the PCDS and risk becoming liable for damages for misrepresentation or fraud if answers in the PCDS turn out to be incorrect.
The amendment to the PCDA eliminates the option of the seller to give a $500 credit to the purchaser for the failing to deliver the PCDS. It also adds 7 new questions asking for flooding-related information such as if the property is in a FEMA flood zone, if the property is required to maintain flood insurance and if any claims have been made for flood damage. A copy of the legislation which is known as chapter 484 of the laws of 2023 is available HERE
The legislation follows an amended PCDS issued in June by the Department of State requiring the seller of residential real property to disclose indoor mold history