For years, real estate sellers in New York have had the option of giving a buyer a $500 closing credit instead of filling out the state’s Property Condition Disclosure Statement, wherein they have to list everything they know that might be wrong with the property.
As of March 20, 2024, however, that’s no longer an option. If you plan on selling your New York property any time soon, it’s important to understand what’s expected of you.
Too many bitter buyers, too many rising risks
The changes in the law basically transform the legal landscape between buyers and sellers from “buyer beware” to “seller be forthcoming.”
The changes are due partially to complaints from buyers that they were essentially tricked into agreeing to “as-is” properties and partially due to growing concerns about flood risks in the state. Indeed, many of the questions added to the updated Property Condition Disclosure Statement are focused on whether the property in question is located on a floodplain or subject to flood insurance requirements.
In the past, a lot of realtors advised sellers to give the $500 credit because the Property Disclosure Statement can be confusing and vague, and mistakes can lead to legal liabilities. Now, sellers really do not have a choice.
Real estate agents and brokers cannot (or should not) take the lead with these mandatory disclosures – since that could later be grounds for a lawsuit based on the idea that the realtor gave the seller legal guidance that they relied on to their detriment. A realtor is only required to make a seller conscious of their obligation – and many realtors are expected to suggest that their clients seek appropriate legal guidance to help them navigate compliance with this new rule.