Establishes a revised residential property condition disclosure statement; repealer

1 Co-sponsor

• Joseph P. Addabbo Jr.

Title of bill

An act to amend the real property law, in relation to property condition disclosure in the sale of residential real property; and to repeal subdivision 2 of section 462 of such law relating to the property condition disclosure statement

Purpose or general idea of bill

To revise the current property condition disclosure statement in order to make the statement more comprehensive and consumer-friendly.

Summary of specific provisions

Section 1 repeals subdivision 2 of section 462 of the real property law, the current property condition disclosure statement, and a new subdivision 2 is provided. The primary changes in the new form include the elimination of "Unknown" as a possible answer to the seller and the consolidation or New York State mandated disclosure requirements within the new statement.

Section 2 amends section 464 of the real property law to make clear that the seller is not required to provide a revised property condition disclosure statement solely because of receipt of an inspection report from the purchaser's inspector.

Section 3 amends subdivision 1 of section 465 of the real property law to clarify that a $500 credit is due to buyer if the buyer does not receive a "complete" property condition disclosure statement from the seller prior to the signing by the buyer of a binding contract for sale.

Section 4 provides for an effective date of the sixtieth day after it shall have become law, and shall apply to binding contracts for the sale of residential real property signed on or after such effective date.

Existing law

Current law requires the seller of residential real property to provide a property condition disclosure statement to a buyer or buyer's agent prior to the signing by the buyer of a binding contract of sale.

Justification

The current property condition disclosure statement was signed into law in 2001 and went into effect on March 1, 2002. Since that time, the legislature has heard from various parties on the effectiveness of the statute and has considered amendments on how to improve the intent of the original bill, which was to provide information to buyers regarding the condition of property they were considering purchasing prior to the signing of a binding contract for sale. Current law requires seller's to fill out the statement based on a standard of their "actual knowledge". This legislation improves upon the original intent of the law by removing the option of a seller to select the answer "Unknown" because under an "actual knowledge" standard the seller either knows the answer or does not. A new "Note to Buyer" section is also added in the revised statement reminding buyers that the disclosure statement is not a warranty of any kind and is not a substitute for inspections completed by licensed home inspectors. Buyers of real property are further encouraged to obtain their own independent professional inspections and environmental tests. New York State law requires seller's of real property to provide myriad disclosures about their property. This revised bill provides seller's with the opportunity to satisfy all statutory disclosure requirements for agricultural districts; utility surcharges; presence of utilities; and uncapped natural gas wells where applicable. PRIOR LEGISLATIVE HISTORY : None.

Fiscal implications

None.

Effective date

This act shall take effect on the sixtieth day after it shall have become law, and shall apply to binding contracts for the sale of residential real property signed on or after such effective date.