Historically, those who wanted to sell a home had no duty to tell would-be buyers about any significant problems with the house.
The buyer would either just have to take on the risk of expensive, surprising and stressful problems or would have to negotiate with the seller for a warranty or for the option to have a property inspection.
To some extent, this is still true. However, New York law now and for the past several decades requires sellers in certain residential real estate transactions to provide information about the property to buyers before buyers sign a purchase agreement. They do so by filling out a form called the Seller’s Mandatory Property Condition Disclosure.
It is important for people to remember that commercial properties are exempt from this requirement, as sellers are new construction homes, condos and cooperatives, and multi-family units. Likewise, properties that have been foreclosed recently may be exempt from this requirement.
How can the Seller’s Disclosure help me if I discover a property defect?
It is also important to realize what a Seller’s Disclosure can and cannot do for a resident of Queens or one of New York’s boroughs who discovers his new home has a costly defect that may also reduce their home’s value.
If a seller does not provide the Seller’s Disclosure in a timely fashion, then the buyer can claim a $500 credit on the purchase price. Unfortunately, not providing the form does not automatically entitle a buyer to set aside a sale if the home turns out not to be what she expected.
On the other hand, an inaccurate Seller’s Disclosure, or a buyer’s refusal to provide one, can be valuable evidence if a buyer later needs to initiate litigation after discovering a property defect.
Whether one is a seller who is trying to complete the Disclosure accurately or a buyer who has questions about a sale, understanding this form and what it does and does not require is important.