What is a property condition disclosure statement?

The New York State Senate’s website notes that residential real estate sellers must give buyers a property condition disclosure statement. Before you sign a purchase agreement, you have a right to discuss the disclosure statement as part of the sale. When completing the transaction, both you and the seller must sign the statement and include it with your contract.

Even if a seller lists property for sale in an “as is” condition, a buyer has a right to know about certain issues. Without a property condition disclosure statement, a buyer may receive a $500 credit against the sale price, as reported by Nerdwallet. Incomplete or false disclosure statements could result in a buyer filing a claim for damages in the future.

Information and conditions that sellers must disclose

Before engaging in a transaction, you may inspect a home for potential problems to help avoid future issues. New York State laws require sellers to note the year builders completed the structure. Homes constructed before 1978 may contain hazardous compounds such as lead paint or asbestos.

Sellers must disclose environmental issues such as toxic substances. If there are hazardous materials stored on the property or nearby, buyers must know about them. Any previous spills or contamination from toxins, such as oil or gas, require documenting. Buyers also need to be aware of a property’s proximity to a flood zone.

Common issues disclosure statements describe

Material defects that buyers must learn about include problems with a home’s plumbing, electrical and HVAC systems. If a home has a leaking roof or flooding basement, sellers need to disclose it. Issues with neighbors such as boundary line disputes also need disclosing.

Real estate transactions generally undergo inspections and discussions before parties reach an agreement. New York’s statutes also require disclosing information about a property’s condition and known issues.