This year has brought unprecedented flooding to New York City and other parts of the state. This helped spur efforts by state lawmakers to craft legislation that would increase home sellers’ responsibilities to disclose known flood risks to potential buyers. In September, Gov. Kathy Hochul signed this legislation into law.
The law amends the state’s Property Condition Disclosure Statement that all home sellers must completely thoroughly and truthfully when selling their home. It includes things like asbestos, hazardous waste, pest infestations, fire or smoke damage and more.
What information must sellers disclose?
The document now requires detailed information about flood risks – not just whether there have been any floods on the property. Specifically, sellers must disclose:
- That the property is located in a flood hazard area or a FEMA-designated floodplain
- That the property has had “flooding, drainage, or grading problems that have resulted in standing water….
- If the property owner is required to have flood insurance
- If they or previous owners had any flood damage claims or received government assistance after a flood.
The new law also removes the option for sellers to waive the requirement to disclose a history of flooding if they pay a penalty to the buyer of $500.
An official with the Natural Resources Defense Council (NRDC) says the new law “goes a long way towards helping give home buyers the information they need to make informed decisions about one of the biggest financial investments of their lives — their home.” The NRDC had been highly critical of the state’s lack of flood disclosure requirements. It noted that New York was the only state where sellers could “opt out” of providing any information about flooding in their disclosures by giving the seller a credit towards the purchase price.
Whether you’re on the buying or selling end of a residential real estate transaction, it’s crucial to understand the change to the disclosure law. This is just one reason why having experienced guidance can help you avoid unnecessary legal issues.