New York State has recently made significant changes to the Property Disclosure Act which

governs Property Condition Disclosure Statements (PCDS). Governor Kathy Hochul, on

September 22, 2023, signed into law a bill which will become effective on March 20, 2024 at

which time two major changes will go into effect.

First, the $500.00 credit that a purchaser could obtain if sellers choose not to provide a PCDS

will be eliminated from the law. Thus, moving forward, a PCDS will be required for any party

who is subject to them absent another law in place that exempts them, such as when an estate

sells property. This law was advanced because a number of sellers believed that it was better to

simply provide the $500.00 credit as opposed to a PCDS to a purchaser. In upstate New York,

most sellers would provide a $500.00 credit; however, toward New York City/downstate, a

PCDS was almost never provided. Sellers attorneys in the Metropolitan Area of New York likely

saw this as a way to avoid potential liability for their clients, and the $500.00 that their client

would give up was not significant with the high property values in the New York City area.

In upstate New York and the Adirondacks, most sellers would provide a PCDS, as many realtors

and purchasers’ attorneys would suggest to their clients that if there was not one provided, it was possibly because the seller was purposefully not making any representations about the property.

It was possible that a seller had actual notice of some issues with the property that they did not

want to be compelled to share. The culture and custom at least in the northeastern part of New

York that developed after the PCDA was initially passed was to provide a PCDS, but clearly, this

was not the case in all parts of the state.

Starting March 20, 2024 however, sellers will be required to share these things if they are

required to provide a PCDS and not escape making representations with a $500.00 credit.

Another significant change to the PCDS starting on March 20, 2024 is that questions will be

added such that discuss flood hazards and flood plane issues. This will be a significant addition

and require some information be provided by a seller on these issues. The questions will include

whether the property is located wholly or partially in a 100-year flood plane, a 500-year flood

plane and whether the property is subject to any requirement under Federal Law to obtain and

maintain flood insurance on the property, if there is flood insurance on the property currently and whether the seller has ever filed a claim for flood damage, in addition to some other questions. This will be another significant piece of information that prospective purchasers will have on property moving forward.

Prior blog posts from our office have indicated the importance of closely reviewing and

providing an accurate PCDS as a seller and also analyzing same closely as a purchaser. This law

will only strengthen the need to do so on both sides.

If you have any questions on this topic, please don’t hesitate to contact our office.