For years most attorneys representing sellers of real estate in New York State have been counseling not to complete a Property Disclosure Statement. This recent case is an example of why, in New York, the Property Condition Disclosure Statements (PCDS) can cause trouble.
Sellers in New York are required to either “disclose” what they know on a 32 question Property Disclosure Statement, or give the buyers a $500 credit in lieu of such disclosure. The problem, however, is that these property “disclosures” are mini-representations, which can lead to all sorts of claims for misrepresentation, fraud, or concealment. The question for the disgruntled buyer is always whether, when completed and delivered, the owners-sellers may be liable for buyer actual damages stemming from any willful failure to describe the property conditions asked about on the “form.”
In one recent case, the the buyers purchased a residential property from the defendants in “as is” condition after having been given notice through the form PCDS that the Sellers (defendants) of a previous kerosene leak on the property. Shortly after taking possession of the property, however, the plaintiffs discovered that the septic system had failed, the heating system was inadequately established, debris had been left on the property, kerosene had spilled in the basement, and the house was infested with mice.