Who knows the most about your house? Its history, its features, its quirks, its problems? The answer is you, the seller. As someone about to sell a New York home, consult your lawyer (not your realtor) about the Property Disclosure Statement. Under New York State Law, you have a decision to make– complete a 35 question exam about your house, or give a $500 credit for not disclosing to buyers.
This disclosure or admission is part of New York’s Property Condition Disclosure Act, which became law in 2002. The law applies to all land that is improved by one to four family dwellings that are used or intended to be used as residences. Condominiums, cooperatives, vacant land to be used for construction, and certain other forms of ownership are exempt from disclosure.
It sounds simple, but the law demands much more than saying, “My home is in excellent condition!” or “My home is great!” In fact, the Act requires sellers to complete a six-page form that includes questions ranging from the age of your house to whether your property ever contained a fuel storage tank to whether you have ever tested the water quality and flow.
We generally recommend that you do not attach the disclosure to your contract, and instead give the buyer a $500 credit at closing. Why? Because New York State remains a solidly caveat emptor (buyer beware) state where the buyer is charged with investigating the house. Why would a seller risk disclosing something that later becomes wrong. Cases are replete with examples of litigants claiming that something was not disclosed — post closing. Who wants the head ache of a litigation after selling the house, especially in this market.
The Bottom line- despite the best ntentions, an innocent mistake such as declaring your home lead-free can lead you to court if the buyer later learns otherwise and decides to sue, alleging a misrepresentation. Would you rather pay $500 toward the credit, or litigate that innocent mistake?