Buyers of residential property in the state of New York are by law supposed to be furnished with a form known as a Property Condition Disclosure from the seller. It is a form with several dozen questions on the physical characteristics of the property, such as the roof, plumbing, and electric systems. One question asks if there was ever a buried fuel tank on the property. The law is about 10 years old and states that the seller is required to issue a $500 credit in the absence of furnishing the form. It is very clear. You zig or you zag. And it is up to the seller.
The choices:
- Filled out Property Condition Disclosure
- $500 Credit to the buyer
All real estate is local, and it is rare for buyers in the Metropolitan Area of New York City (5 Boros, Long Island, Westchester, Hudson Valley) to get the form, while a $500 credit is almost unheard of upstate. This might be due to the fact that New York area lawyers don't like volunteering information when a $500 credit is such a small percentage of overall proceeds to avoid it. It might be other reasons; I don't know. I cannot recall a transaction where a listing of mine provided the form. Once the predominant view of attorneys on the matter is one way or the other, the clientèle tend to agree.
This much I can say: The $500 credit is not not a sign that the seller is hiding anything or acting surreptitiously. Buyers are still protected by the law in cases where known defects are concealed. The $500 is not a get out of jail fee card or release from liability. it is simply an option, and an understandable one when you consider that in an area that has been settled for over 400 years, people really don't know what is under the ground, be it an ancient well or oil tank.
Buyers and sellers alike should understand this, and ask their New York attorney the pros and cons of the Property Condition disclosure and the $500 credit.
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- J. Philip Faranda, Broker-owner, J. Philip Real Estate, LLC. 2010 Vice President, Westchester-Putnam Multiple Listing Service.
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This is very interesting information of what is going on in New York. Here in Maryland we use a Disclosure vs Disclaimer form used per the seller's choice.
Phil,
Interesting. Totally different here. Ohio law requires Residential Property Disclosures be filled out and provided. Exceptions provided for bank owned, estate sales, etc.
Phil, having experienced a required disclosure vs. a credit, one advantage that I noticed (opinion) is that buyers had a bit more confidence in the process and house when the disclosure was provided vs. the stress of awaiting the results of the inspection- the disclosure didn't offer any guarantee, just a bit more peace of mind out of the gate. I didn't know that disclosures are used in parts of NY- very interesting.
Hmmm. Wasn't aware of that. I'll have to ask my dad about that, as he's an attorney - does estates and trusts and some types of real estate.
But, does the same thing apply if you live in an apartment? Trying to think where they would hide that oil tank. maybe in the aparment below? no, wait, what abt the garage? (sounds really safe).