What Must Be Disclosed When Selling a House in New York State?

DISCLAIMER: As a friendly reminder, this blog post is meant to be used for educational purposes only, not legal advice. If you need assistance navigating the legalities of what to include on a home seller disclosure form in New York State, HomeLight always encourages you to reach out to your own advisor.

Selling a home in any state involves a checklist of must-do, should-do, and don’t-do items that can seem overwhelming. While many of those items are very similar regardless of where the property is located, there are also some state-specific rules and regulations to consider — one of the biggest of which is disclosures. If you’re preparing to sell a house in the state of New York, it’s important to understand what you’re required to disclose, what must be fixed or addressed before listing, and how disclosure laws could impact or impede the sale process.

Fortunately, you’ve come to the right place. We spoke to a number of experienced New York investors, appraisers, and other professionals to find out everything you need to know about real estate disclosures in The Empire State.

What is a seller’s disclosure?

When selling a residential property in the U.S., most states have laws mandating that sellers provide buyers with information about the condition of the house or specific features that may impact the sale.

In states like New York, the seller completes a disclosure form that answers specific questions about the property, and also includes areas to explain those answers.

The home seller is often legally required to share any issues or problems within their knowledge. Your listing agent should inform you about local disclosure laws and provide you with the appropriate disclosure forms to complete. We’ll cover New York’s disclosure laws in a moment.

When a buyer makes an offer on a property, that offer typically specifies a certain time frame in which the seller must provide disclosures. The buyer then has a certain period of time to review the disclosures and has the right to rescind the offer based on what is disclosed.

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When and how is the disclosure made?

If you are represented by a real estate agent, it is typically his or her responsibility to make you — and the buyer, if they don’t have agent representation — aware of the required disclosures. Your agent will most likely provide you with a copy of the disclosure form.

After you have completed the form and shared all known defects, you’ll sign the final page to verify that all information is thorough and accurate to the best of your knowledge. Your listing agent should deliver the completed disclosure statement to the buyer (or the buyer’s agent) before the purchase contract is finalized. The buyer also signs the disclosure to confirm receipt, and it is then attached to the signed purchase contract.

The difference between disclosures and inspections

It’s important to note that a disclosure form is not a substitute for a home inspection. However, the buyer and their inspector could potentially look further into areas of concern raised by the disclosure.

Sharon Quataert, a top real estate agent in Monroe County with 37 years of experience, points out that in the current competitive New York real estate market, many buyers are waiving inspections, which underscores the importance of disclosures.

“As our real estate gets older, and communities are reaching 50 or 60 years old, there are more potential issues emerging,” she explains. “When buyers waive inspections, they are less aware of defects with properties. That means sellers and real estate agents have a greater responsibility to point out things that they might not have had to in the past.”

The form also mentions that New York adheres to the principle of caveat emptor, or buyer beware, and says that the form is not intended to take the place of the buyer’s independent due diligence, and that the form does not serve as any sort of warranty on behalf of the summer.

Is a seller’s disclosure required in New York State?

According to N.Y. Real Prop. Law §§ 460-467, home sellers in the state are legally required to disclose any property defects of which they are aware. The disclosure statement must be provided to the buyer at least 10 days before the contract is signed.

However, if the seller does not wish to complete the disclosure, they also have the option to pay a credit of $500 to the home buyer at closing, per New York Real Property Law – RPP § 465. While many sellers typically opt to skip the disclosure and opt for the more convenient $500 payout, Quataert is seeing more buyers assuming the increased responsibility of completing disclosures in the competitive market.

“With limited inventory and greater competition from cash offers, buyers are trying to secure successful negotiations and want to get every advantage — and that can extend to disclosures,” she explains.

What disclosures are required in New York?

Below are some of the most common disclosures for New York real estate sales:

Property Condition Disclosure Statement

The Property Condition Disclosure Statement (PCDS) is required by law to be provided to potential buyers for all properties containing a dwelling unit that is being offered for sale in New York State. The PCDS must contain information about the property’s current condition, including any known or suspected defects or problems.

“This disclosure can help buyers protect themselves from any potential problems with the property,” explains Shaun Martin, a real estate investor and investment advisor based in Denver, Colorado, who has recently expanded his business to buy and sell properties in New York.

Environmental Disclosure Statement

Sellers are legally required to provide the Environmental Disclosure Statement (EDS) to potential buyers for all properties containing a dwelling unit in New York State. The EDS must contain information about the property’s past and present use, including any known or suspected environmental contamination.

“This disclosure is important because it can help buyers make informed decisions about whether to purchase a property and, if so, how to protect themselves from any potential environmental hazards,” says Martin.

Lead-Based Paint Disclosure Statement

For all properties built in New York since 1978, which is the year that lead paint was banned for residential use, sellers must provide the Lead-Based Paint Disclosure Statement. The LPDS must include any information about the presence of lead-based paint and/or lead-based paint hazards.

“This disclosure outlines the potential risks associated with lead-based paint and provides information on how to protect oneself from exposure,” says longtime property investor Zachary VanHeyningen.

Flood Hazard Disclosure Statement

If a New York property is located in a flood plain, the buyer is required to disclose that information to the seller. “This disclosure outlines the risks associated with flooding and provides information on how to protect oneself and one’s property from flood damage,” explains VanHeyningen.

Smoke Detector Disclosure Statement

New York law requires that the Smoke Detector Disclosure Statement (SDDS) is provided to potential buyers for residential properties. “The SDDS must contain information about the property’s smoke detector system, including any known or suspected defects or problems, to help buyers protect themselves from any potential fire hazards,” says Martin.

Elements of the Property Disclosure Form

General info

The first part of the Property Condition Disclosure Statement asks for basic information such as how long you’ve owned and occupied the property, the age of the property, whether anyone else has any claims to any part of it, whether any features are shared with adjoining landowners or an HOA, and the existence of any electric or gas utility surcharges for line extensions, special assessments or other fees.

Environmental

Sellers in New York are required to report any hazardous materials or conditions that can impact the safety of residents living on the property. The form specifically asks the seller to disclose the presence of the following:

• Petroleum products:
  • Gasoline
  • Diesel fuel, home heating fuel, and lubricants
• Hazardous or toxic substances:
  • Fertilizers
  • Pesticides and insecticides
  • Paint, including paint thinner and varnish remover
  • Construction materials such as asphalt and roofing materials
  • Antifreeze and other automotive products
  • Batteries
  • Cleaning solvents including septic tank cleaners, household cleaners, and pool chemicals
  • Products containing mercury and lead

The environmental section also requests that sellers disclose if the property is located in a floodplain, a designated wetland, or an agricultural district. You’re also required to indicate whether it has ever been the site of a landfill or contained fuel storage tanks. Additional environmental disclosures include the presence of lead plumbing and any radon testing that has been conducted.

Structural

This section of the Property Condition Disclosure Statement requires that the seller shares information about the following:

• Rot or water damage
• Fire or smoke damage
• Termite, insect, rodent, or pest infestation or damage
• Details on the roof/roof covering, including materials, age, defects, and warranty
• Defects in any of the property’s major structural systems

Mechanical systems and services

In this section, the seller must disclose the following:

• The property’s water source and water quality
• Details about the sewage system
• Information about the electric service provider and electrical specifications
• Standing water on any portion of the property
• Any known material defects in the plumbing system, security system, carbon monoxide detector, smoke detector, fire sprinkler system, sump pump, foundation/slab, interior walls/ceilings, exterior walls or siding, floors, chimney/fireplace or stove, patio/deck, driveway, air conditioner, heating system, or hot water heater.

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What happens if something breaks after the disclosure is provided?

According to the New York state law, sellers need to disclose the material defects to buyers that they are aware of or should have been aware of at the time of a property closing. If any problem emerges after the sale is done and the disclosure form is submitted, the seller can’t be held responsible for that. This means the buyer can’t sue the seller for an issue that emerged after the disclosure form is submitted.

However, Quataert points out that if something breaks or is discovered prior to closing, the seller is still legally bound to disclose that information to the buyer.

In this situation, VanHeyningen recommends taking action to keep the sale moving forward. “If there is something that needs to be fixed after the disclosure form is submitted, the seller should contact the buyer and arrange a time to fix it,” he says. “If the buyer is not available, the seller may need to get in touch with a real estate agent to help facilitate the repairs.”

But VanHeyningen adds, “This does depend highly on the contractual language in the purchase agreement and/or the level of detail that the disclosures are drafted by your legal team or lawyer.”

What happens if a seller fails to disclose something?

Whether it’s intentional or not, if a seller fails to disclose a significant defect with a property it can result in legal repercussions and even litigation.

In a worst-case scenario, the repercussions could be pretty serious — the sale may be voided, or the buyer may be able to sue for damages. The level of severity hinges on what was not disclosed, and whether or not the disclosure would have impacted the buyer’s decision to purchase the property.

For example, if a seller fails to mention that there is lead paint on the property and the buyer later finds out, the sale may be voided. The buyer could also sue for damages, as lead paint can be a health hazard. On the other hand, if a seller fails to mention that there was a small leak in the bathroom sink that has since been fixed, the repercussions would probably be much less severe.

VanHeyningen says the buyer could potentially sue the seller for damages. “If the buyer is able to prove that the seller knew about the issue and failed to disclose it, the seller could be on the hook for the cost of repairs, plus any other damages that the buyer incurred as a result of the issue,” he explains. “In some cases, the seller could even face criminal charges if the issue is serious enough.”

Is there anything that sellers don’t have to disclose in New York State?

There are a few things that home sellers are not legally bound to disclose in New York:

• Any known defects with the property that a standard inspection would not typically reveal
• Any issues with the septic system or well water
• Information about a house’s zoning or school district
• Violations of local building codes
• Any details about the people who previously resided in the house, unless it is linked to a potential health hazard

More tips about New York State real estate disclosures

• Disclosure statements are different from property reports. Property reports contain public information that is readily available, while disclosure statements contain information that is specific to the property and may not be easily accessible.
• VanHeyningen recommends hiring a lawyer who specializes in residential or commercial real estate transactions. “They will be knowledgeable about the potential risks that need to be mitigated in your local market, as disclosures can vary county to county,” he says.
• It’s important to remember that the required disclosures vary depending on the type of property being sold. For example, if you are selling a condo, you will need to disclose information about the building’s common areas, monthly maintenance fees, and any special assessments that may be in effect. If you are selling a co-op, you will need to provide information about the building’s financial condition, any pending litigation, and the terms of the lease.
• The seller has no obligation to revise or add to a disclosure statement if a new defect is discovered after closing or after the buyer has taken possession of the property. However, if an inaccuracy or new defect is found before that point, the seller must provide a revised disclosure to the buyer.

Are you ready to sell or buy a home in New York?

When looking to sell a house in New York, knowing what to expect — and knowing what is expected of you — is crucial to ensuring a smooth, stress-free transaction. As a seller, it’s important to know what you’re required to disclose in order to protect not only the deal itself, but also your own best interests.

By partnering with an experienced real estate agent who knows the ins and outs of New York disclosure laws, you’ll be equipped to take the next step with confidence.

HomeLight can connect you with top-performing agents in New York State who have the local market knowledge to guide you through every step of the home-selling or buying journey, from staging and showings to disclosures and closing.

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