On November 13 2001 New York Governor George Pataki signed the Property Condition Disclosure Act which, effective March 1st 2002, legally requires a seller of a one to four family home to provide a potential buyer a statement of all known defects of the property. This legislation was intended to provide buyers a measure of protection from sellers knowingly hiding damage previously done, or still being done to a property. While it does offer some protection, it was not intended to replace a home inspection. In fact, as stated within the act, it serves to highlight the importance of retaining the services of a professional home inspector.
“ This act is not intended to and does not diminish the responsibility of buyers to carefully examine the property which they intend to purchase and public records pertaining to the property and, in fact, highlights the importance of professional inspections and environmental tests. This act is not intended to and does not limit existing responsibilities” **
The disclosure statement itself is a series of yes or no questions, with a couple of lines for explanation, on a range of topics relating to the current and past state of the property. Sample questions include “15. Is there asbestos in the structure?”, “20. Is there any rot or water damage to the structure or structures?” and “22. Is there any termite, insect, rodent or pest infestation or damage?” Any false declarations by a seller can result in full compensation to the buyer for any work needed to restore the property to the condition previously agreed upon in the disclosure statement. However, often a drawn out legal battle is required, costing additional legal expenses to both parties.
While the act does offer a measure of protection to potential buyers, it also offers a ‘buyout’ option to seller. For as little as 500 dollars given to the buyer, a property disclosure statement can be forgone, as well as the legal responsibilities of the seller. In essence, a seller who knows of a problem which could lower a homes value in excess of thousands of dollars, can simply choose to ignore it, and pass the costs on to the unaware buyer for a mere 500 dollars. Be wary of any seller who refuses to provide a disclosure statement, and definitely retain the services of a home inspector if you wish to continue with a purchase. While the act is a step in protecting the rights of both the buyer and seller of residential real estate, it is far from complete legal coverage and should stand to emphasize the importance of thorough investigation into any potential sale.
A copy of the Property Condition Disclosure Act can be obtained from the Department of State website.
home-inspection
