All Things Real Estate: Pros and cons of the new property condition disclosure statement

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All Things Real Estate: Pros and cons of the new property condition disclosure statement
Philip Raices

For those realtors who have not yet signed up for the Property Condition Disclosure Statement presentation by our LIBOR  attorney, then they should sign up ASAP!

Most consumers and homeowners aren’t aware of the new revised and updated law which can greatly impact their sale and sale price.

Lastly, some know about the new Property Condition Disclosure Statement Law that was enacted, (replacing the original 2002 law) recently passed in the state Legislature.

Gov. Hochul signed it into law on Sept. 22, 2023.  It became effective on March 20, and situations have been radically altered for Realtors, sellers, and buyers; but favoring buyers considerably more.

The old law said that if a seller did not fill out the 48 questionnaire form on the previous Property Condition Disclosure Statement, (as most attorneys told them not to), they would have to pay $500 at the closing.

This didn’t protect them against future lawsuits by the purchaser due to defects in their home; especially since the disclosure wasn’t completed.

What’s now changed is that if your home wasn’t in a fully executed contract, (e.g. signed by the purchaser and seller) by that latter date, then the new and updated law now obligated all sellers of residential properties in New York State to fill out the new 55 question form; seven new questions were added concerning flood hazard issues.

Moreover, this was mandatory and had to be completed and provided to the seller or buyer’s attorney before emailing the contract.

Although there is some time spent by the seller to meticulously and carefully complete the PCDS, the bonus and icing on the cake enables them to earn and keep the $500.

The seller is no longer responsible for paying the additional monies at their closing.  Previously, not filling out the PCDS form was the only reason by law that a seller had to pay the $500 at the closing.

More importantly, most attorneys had advised their sellers, not to fill out the form, and pay the $500, so they wouldn’t open themselves up to potential lawsuits.

Personally and professionally, I thought it was not the best approach for the seller if they were candid, upfront, and transparent with properly answering the PCDS.

Furthermore, I also believe that most attorneys didn’t want to have to represent and deal with any after-the-fact and subsequent lawsuits against their former clients related to those non-completed PCDS.

What judge or jury would consider convicting a seller, if they had been truthful and forthright in their efforts to answer all the questions, paying the $500?

More importantly, if a lawsuit were to commence, I would surmise that the buyer and his or her lawyer would have to prove beyond a shadow of a doubt, that the seller had purposely and intentionally hid facts about defects in and around their home.

The bottom line is that the sellers are paid $500 per hour, as savings when filling out the mandatory and required form; which generally takes no more than 1 hour or less to complete.

However, there are 14 exceptions to the rule in certain specific situations and they are as follows:

∙Court transfer order by a probate court in dealing with the administration of a decedent’s estate.

∙Transfer under a writ of execution.

∙Transfer by a trustee in bankruptcy or debtor in possession.

∙A transfer as a result of exercising the power of eminent domain.

∙A transfer due to a decree for a specific performance contract or agreement by 2 or more persons.

There are nine additional exceptions to the new law, which you can ascertain and find at casetext.com under the N.Y.

Real Prop. Law § 463.

The new law protects the sometimes unwary purchaser from a few sellers who just might be hiding some serious issues or possibly might not even know what defects  might be in their home.

So hiring a home inspector might be your best, safest, and most prudent investment if your home is 20 years or older; to know and understand what issues there are in your home and fix and repair them, as well as decrease the opportunity for a purchaser in reducing their offer as well as avoiding any potential lawsuits in the future.

 

 

Philip A. Raices is the owner/Broker of Turn Key Real Estate at 3 Grace Ave Suite 180 in Great Neck.  For a 15-minute consultation, value analysis of your home, or to answer any of your questions or concerns he can be reached by cell: (516) 647-4289 or by email:  [email protected]or via https://WWW.Li-RealEstate.Com

 

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