October 9, 2023

Changes to New York’s Property Condition Disclosure Act Applicable to Residential Property Other than Cooperative Apartments and Condominium Units

On September 22, 2023, Governor Hochul signed AB A1967 and SB S5400 into law, ushering in amendments to the Property Condition Disclosure Act ((RPL §462)(the “Act”). Effective March 20, 2024, these changes introduce significant modifications to the Property Condition Disclosure Statement (“PCDS”), including the removal of the seller’s opt-out option and the $500.00 credit.

The Act requires every seller engaged in the sale of residential real property other than a cooperative apartment or a condominium unit (and with exceptions for certain transferors) to complete and sign a PCDS. This statement must be delivered to the buyer or the buyer’s agent before the buyer signs a binding contract of sale, and a copy of the fully executed PCDS must be affixed to the real estate purchase contract. The Act does not prevent the parties from entering into various agreements concerning the physical condition of the property being sold, including “as is” agreements.

Previously, the Act allowed sellers to opt-out of this requirement by instead giving the buyer a $500.00 credit against the agreed-upon purchase price upon the transfer of title. However, this option will no longer be available starting March 20, 2024.

In addition, the PCDS will expand the scope of questions asked about flooding and leaks, for example, if the property is located in a 100-year or 500-year floodplain according to FEMA’s flood insurance rate maps, whether the property is subject to requirements under federal law to obtain and maintain insurance, and the property’s flood insurance history.

These revisions to the Property Condition Disclosure Act mark a significant shift in the legal landscape that will impact both sellers and buyers of residential property. If you have any questions about these changes, please feel free to contact your trusted SSRGA attorney.