Changes to the New York State Property Condition Law

New York State lawmakers have made changes to the New York State Property Condition Law which takes effect March 20^th, 2024.

There was a change to the law which took effect on June 14^th, 2023 in which home sellers must provide disclosure of known indoor mold on a New York State Property Condition Disclosure Statement (hereinafter referred to as “NYS PCD”).

Under the current NYS PCD law, sellers have two options:  1.  A home seller can complete a NYS PCD and provide that disclosure to a prospective purchaser prior to them making a purchase offer.  2.  In lieu of providing a NYS PCD, a home seller may credit the buyer $500.00 against the purchase price at the time of closing.  Effective March 20^th, home sellers will have only one option available to them:  They must provide a NYS PCD to a prospective purchaser. 

On March 20^th, 2024, two new changes to the NYS property condition disclosure law include the requirement that sellers of residential real estate up to four units must disclose flood risk information on the property. 

Some of the questions relating to the flooding section of the disclosure read “Is any or all of the property located wholly or partially in the special flood hazard area…” to “Has the structure experienced any water penetration or damage due to seepage or a natural flood event such as from heavy rainfall…”. 

It is the second change to the NYS PCD law which may be more compelling to some home sellers. 

On March 20^th, 2024, all home sellers are required to provide the NYS PCD.  No longer can a home seller credit a purchaser $500.00 against the purchase price at the time of closing.  The revision to the law removes the seller’s option to provide a credit to the purchaser of their home. 

There may be negative aspects and unintended impacts to the removal of the seller provided credit option.  Not having any provision to “opt-out” may place an inadvertent effect on sellers of property in circumstances where the seller has no or little associated history with the property such as inherited property.  What of an unfortunate circumstance of a property seller who has diminished memory or impaired cognitive ability?

When posed with the question what options does a seller have in such circumstances, one attorney whose practice includes real estate law quipped “Sure, sellers may now have no option other than to provide a NYS PCD, yet, nothing prevents a seller from answering each question as “Unknown”.