On September 22, 2023, Governor Kathy Hochul signed legislation (A.1967/S.5400) amending the Property Condition Disclosure Act (“PCDA”), which effectively eliminates a seller’s option to provide a residential homebuyer with a $500 credit in lieu of a Property Condition Disclosure Statement (“PCDS”). The amendment further requires sellers to disclose property information regarding flood risk, flood history and flood insurance. This consequential shift is consistent with Gov. Hochul’s implementation of her comprehensive resiliency plan to protect New Yorkers from extreme weather. The amendment goes into effect on March 20, 2024.
This bill goes a long way towards helping give homebuyers the information they need to make informed decisions about one of the biggest financial investments of their lives — their home.
Joel Scata, Natural Resources Defense Council Attorney for Water Initiatives
Elimination of “Opt-Out” Provision
The New York legislature enacted the PCDA to supplement the information provided by professional inspections and tests and searches of the public records conducted by residential homebuyers (New York Sponsors Memorandum, 2001 Ch. 456). The PCDA was also a response to adherence seen in New York’s case law to the doctrine of “caveat emptor” or “buyer beware,” which has long permitted a residential seller to remain silent as to most matters that are not actively concealed by the seller. Consequently, buyers ended up with the burden of thoroughly inspecting the premises, searching public records and asking sellers the “right” questions about the property. Despite the introduction of the PCDA, sellers were given the opportunity to “opt out” of providing buyers with a PCDS, if they were willing to pay the price – $500. Unsurprisingly, the $500 credit to the purchaser became the standard, and not the PCDA.Continue Reading Disclosure Revolution: Legislation Makes Property Condition Disclosure Statements Mandatory, Adding Flood Risks, and Waving Farewell to the $500 Credit