For more than 20 years, home sellers in the state of New York have been required to furnish their buyer with a form known as a Property Condition Disclosure Statement (PCDS). It is a collection of several dozen questions that the seller is required to answer about the characteristics of the home. The law always allowed sellers to forgo the statement and credit their buyer $500 at closing instead, which is what sellers in this area did all the time. It was small price to pay for the theoretical shield of not making any representation that could be erroneous. As you can see, some questions are not easy to answer.
This is just a snippet from the 8 page, nearly 60 question form, but I can see why the advice was always to issue the $500 credit instead. Our housing stock around here trends older. How would someone know if there was ever a fuel tank on their property 100 years ago, or if there was ever a landfill there? The house I grew up in was on a former peach farm. That sounds harmless enough, but for all we knew there could have been a deep well, or a garbage pit, or a garage or fuel storage 100 years prior.
The law recently changed, and the following is the memo we got from our friends in Albany:
On September 22, 2023, Governor Hochul approved new legislation that provides significant
changes to the Real Property Condition Disclosure Statement (“PCDS”). The new law will go
into effect on March 20, 2024. This notice is intended to provide important information to real
estate licensees.
In advance of the change in law, the Department of State (the “Department”) has updated the
current PDCS, available on our website. Both the existing form and the future form will be
available until March 20, 2024. Real estate licensees are required to use the updated form, for all
transactions, starting on March 20th. Failure to use the correct form may result is liability to both
sellers and licensees. Accordingly, it is important to all parties to use the correct form starting
March 20, 2024.
In addition to new disclosure requirements, a key provision of the new law will be that sellers
may no longer forgo giving the PCDS in exchange for a $500 credit at closing.
The change has caused quite a stir, since there is no alternative to the statement anymore.
Here’s my advice to all home sellers:
Talk to your attorney.
That’s it. That’s my advice. And if you think I’m being glib or passing the buck, let me explain that this is a recent change to a law that requires new paperwork, and the proper source for legal matters and related paperwork is…your attorney, not your broker. It is ethically prohibited for us to give legal advice.
Like any change, this is causing consternation and stress in the real estate industry, and like most changes the angst is worse than the reality. This form was filled out all the time upstate where $500 was not small change, and I’ve never heard of it causing any issue.
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New York’s New Property Condition Disclosure Statement
For more than 20 years, home sellers in the state of New York have been required to furnish their buyer with a form known as a Property Condition Disclosure Statement (PCDS). It is a collection of several dozen questions that the seller is required to answer about the characteristics of the home. The law always allowed sellers to forgo the statement and credit their buyer $500 at closing instead, which is what sellers in this area did all the time. It was small price to pay for the theoretical shield of not making any representation that could be erroneous. As you can see, some questions are not easy to answer.
This is just a snippet from the 8 page, nearly 60 question form, but I can see why the advice was always to issue the $500 credit instead. Our housing stock around here trends older. How would someone know if there was ever a fuel tank on their property 100 years ago, or if there was ever a landfill there? The house I grew up in was on a former peach farm. That sounds harmless enough, but for all we knew there could have been a deep well, or a garbage pit, or a garage or fuel storage 100 years prior.
The law recently changed, and the following is the memo we got from our friends in Albany:
The change has caused quite a stir, since there is no alternative to the statement anymore.
Here’s my advice to all home sellers:
Talk to your attorney.
That’s it. That’s my advice. And if you think I’m being glib or passing the buck, let me explain that this is a recent change to a law that requires new paperwork, and the proper source for legal matters and related paperwork is…your attorney, not your broker. It is ethically prohibited for us to give legal advice.
Like any change, this is causing consternation and stress in the real estate industry, and like most changes the angst is worse than the reality. This form was filled out all the time upstate where $500 was not small change, and I’ve never heard of it causing any issue.