All About The Property Condition Disclosure Statement

Sellers, things have changed! A new law will go into effect in NY on March 20, 2024 that requires sellers to complete a Property Condition Disclosure Statement (PCDS) and repeals the $500 credit to the buyer in lieu of receiving a completed form.

The Property Condition Disclosure Act only applies to sellers who are selling residential properties that have up to four dwelling units. Sellers of estates, trusts, condos and coops are exempt from this process. This act requires sellers to provide a Property Condition Disclosure Statement (PCDS) to potential buyers. The PCDS must include all known defects related to the property The Property Condition Disclosure Statement is a 48-question statement that sellers must complete and deliver to the buyer before the buyer signs the contract.

Historically, the PCDA penalized sellers who elected not to provide a PCDS by requiring those sellers to give a $500 credit to the purchasers at closing. Many sellers chose to give a $500 credit rather than providing a PCDS and potentially exposing themselves to liability for any misrepresentation in their statements. 

In short, because of climate change and flooding events in New York, 3 significant changes were made to the PCDS to help buyers make informed decisions when buying a home. Sellers now need to disclose any information as it pertains to flood risk and mold history. And finally, sellers cannot choose to opt out of delivering the PCDS in exchange for issuing a $500 credit.