Property Condition Disclosure in the Sale of Residential Real Property
460. Short title
462. Property condition disclosure
462 (2) Property condition disclosure statement notice
466. Duty of an agent
§460. Short title
This article shall be known and may be cited as the “Property Condition Disclosure Act”.
As used in this article, the following terms shall have the following meanings:
1. “Agent” means a person who is licensed as a real estate broker or a real estate salesperson pursuant to section 440-a of this chapter and is acting in a fiduciary capacity.
2. “Binding contract of sale” means a real estate purchase contract or offer that would, upon signing by the seller and subject to satisfaction of any contingencies, require the buyer to accept a transfer of title.
3. “Knowledge” means only actual knowledge of a defect or condition on the part of the seller of residential real property.
4. “Real estate purchase contract” means any of the following:
(a) a contract which provides for the purchase and sale or exchange of residential real property;
(b) a lease with an option to purchase residential real property;
(c) a lease-with-obligation-to-purchase agreement for residential real property; or
(d) an installment land sale contract for residential real property.
5. “Residential real property” means real property improved by a one to four family dwelling used or occupied, or intended to be used or occupied, wholly or partly, as the home or residence of one or more persons, but shall not refer to (a) unimproved real property upon which such dwellings are to be constructed, or (b) condominium units or cooperative apartments, or (c) property in a homeowners’ association that is not owned in fee simple by the seller.
6. “Transfer of title” means delivery of a properly executed instrument conveying title to residential real property and shall include delivery of a real estate purchase contract that is a lease or installment land sale contract.
§462. Property condition disclosure statement
1. Except as is provided in section 463 of this article such as sale in event of mortgage foreclosure, every seller of residential real property pursuant to a real estate purchase contract shall complete and sign a property condition disclosure statement as prescribed by subdivision two of this section and cause it, or a copy thereof, to be delivered to a buyer or buyer’s agent prior to the signing by the buyer of a binding contract of sale. A copy of the property condition disclosure statement containing the signatures of both seller and buyer shall be attached to the real estate purchase contract. Nothing contained in this article or this disclosure statement is intended to prevent the parties to a contract of sale from entering into agreements of any kind or nature with respect to the physical condition of the property to be sold, including, but not limited to, agreements for the sale of real property “as is”.
2. Real Property Disclosure Statement form. When a residential property is sold in New York State, the seller has the option of completing a Property Disclosure Form with 48 questions about the property pertaining to environmental, structural and mechanical systems.
As the seller may not know all the answers, there is an option to indicate unknown. Some sellers attorneys though to avoid future litigation for possibly incorrect or misleading answers about known conditions, advise their clients to NOT complete the Prioperty Disclosure Form but in lieu of the form have the seller complete the Property Disclosure Waiver Form and give the buyer a $500 credit at the closing.
Which form a seller fills out at the time the contracts are completed should be discussed with your attorney as the statement is also signed and receipt is acknowledged by the buyer.