Seller Disclosures in New York: What You Are Legally Required to Reveal

When you sell your home in New York, the most important question isn't if you'll disclose information about its condition—it's what you must disclose and how you do it. Getting this wrong can unravel a deal and lead to costly legal battles long after you've handed over the keys. This is not an area for guesswork or casual advice from a neighbor who sold their house five years ago. The laws have changed, and the stakes have never been higher for sellers.

At the heart of this process is the Property Condition Disclosure Act (PCDA), the central piece of legislation governing these obligations for sellers of one- to four-family residential properties. For years, this law contained a well-known option that allowed sellers to sidestep making detailed disclosures. However, as of March 20, 2024, the old rules have changed dramatically. The game has shifted, and what was once a choice is now a mandate, placing a greater burden of transparency squarely on you, the seller.  

This shift in New York law reflects a broader trend in real estate, moving away from the historic doctrine of caveat emptor ("let the buyer beware") and toward a model of greater seller accountability. The law now recognizes that sellers possess the most intimate knowledge of their property's history and condition, and it compels them to share that knowledge.  

This guide will walk you through these new requirements step-by-step. We will translate the dense legal jargon into a clear, understandable action plan. My goal as your Hudson Valley real estate advisor is to arm you with the information you need to protect yourself, your sale, and your financial future.

The New Mandate: Why the Property Condition Disclosure Statement (PCDS) is No Longer Optional

The single most significant change to New York real estate law in recent memory is the elimination of a long-standing loophole in the disclosure process. Understanding this change is the first and most critical step in preparing your home for sale.

The End of an Era: The $500 Credit is Gone

Effective March 20, 2024, the option for a seller to provide a $500 credit at closing in lieu of completing the Property Condition Disclosure Statement (PCDS) has been eliminated by an amendment to the Property Condition Disclosure Act.  

For over two decades, since the PCDA was enacted in 2002, this $500 credit was a popular strategy. Many sellers, often on the express advice of their attorneys, chose to pay the credit to avoid the potential liability of making an error, omission, or misstatement on the detailed disclosure form. It was widely viewed as a simple "cost of doing business"—a small price to pay to minimize the risk of a post-closing lawsuit. Attorneys, particularly in downstate markets, recognized that the vague wording of some questions could expose a well-meaning seller to future claims, making the credit a prudent, defensive choice.  

That choice is now off the table. The new reality is that completing and delivering the Property Condition Disclosure Statement (PCDS) to a buyer before they sign a binding contract of sale is a mandatory legal duty. This applies to nearly all sellers of residential one- to four-family homes. It is important to note, however, that there are still key exemptions. The PCDS is generally not required for transfers involving:  

·         Condominium units or cooperative apartments  

·         Newly constructed property that has never been inhabited  

·         Transfers by a fiduciary in the course of administering an estate, guardianship, conservatorship, or trust  

·         Transfers pursuant to a court order (e.g., foreclosure, bankruptcy, divorce)  

The legislative reasoning behind this monumental change was rooted in consumer protection. Lawmakers came to believe that the $500 credit was a negligible penalty that actively undermined the PCDA's original goal of ensuring buyers were fully informed. This concern was amplified by the increasing frequency of extreme weather events and the growing importance of flood risk disclosure, an area where buyers were often left in the dark. The state legislature decided that a buyer's right to critical information about a property's condition and history outweighs a seller's desire to limit liability through a simple payment.  

This legal change fundamentally transfers risk. The information asymmetry that once favored the seller, who could purchase their silence for $500, has been corrected in favor of the buyer. This forces a significant behavioral change, compelling sellers and their agents to be more diligent, transparent, and legally prepared from the very beginning of the sales process. The pre-listing consultation with a real estate attorney is no longer just about pricing and marketing; it is now, more than ever, about risk management and legal compliance.

Decoding the PCDS: A Guided Tour of the Mandatory Form

With the $500 credit gone, every seller must now become familiar with the Property Condition Disclosure Statement (PCDS) itself. While it may seem intimidating, understanding its structure and purpose is the key to completing it accurately and with confidence.

What's on the Form? A Look Inside the PCDS

The PCDS is a detailed questionnaire (formerly 48 questions, now expanded with a greater focus on flood-related issues) that requires you, the seller, to make representations about the property's condition based on your "actual knowledge".  

This phrase—"actual knowledge"—is your most important guideline and your primary legal protection. The law does not require you to be an engineer, a surveyor, or a home inspector. You are not obligated to conduct any new inspections, perform tests, or search public records to complete the form. You are simply required to answer truthfully based on what you personally know from your time owning and living in the property.  

Furthermore, the form itself explicitly states that it is "not a warranty of any kind" by the seller or any agent in the transaction. It is not a substitute for the buyer's own due diligence, which should always include independent professional inspections and tests. This language is critical; it reinforces that you are providing a statement of your personal knowledge, not a guarantee of the property's future performance. An honest "Unkn" (Unknown) answer to a question is perfectly acceptable and legally far safer than guessing "No" and being wrong. Speculation is where legal trouble begins.  

To make this legal document more accessible, you can view the official, most current version of the Property Condition Disclosure Statement on the New York Department of State website. The form is broken down into several key sections:

The distinction between your "actual knowledge" and a "warranty" is the central legal shield afforded to an honest seller. While completing the PCDS is now mandatory, the state is not asking you to be an expert on every component of your home. The most crucial piece of advice is to be rigorously honest about what you know and, just as importantly, what you don't know. This understanding should empower you to complete the form accurately without feeling pressured to provide answers that fall outside your direct experience.

The "As Is" Myth and the Defects You Can't Ignore

Many sellers believe that including an "as is" clause in their sales contract is a magic shield that absolves them of all responsibility for the property's condition. This is one of the most dangerous and persistent myths in New York real estate.

The Common Misconception: Selling "As Is"

Let's be perfectly clear: an "as is" clause does not give you a free pass to hide known problems. While selling a property "as is" generally signifies that the seller will not make or pay for any repairs requested by the buyer, it does not protect a seller from liability for fraud or what the law calls "active concealment" of a known, significant defect.  

The mandatory PCDS now creates a direct and unavoidable tension with the "as is" concept. The PCDS forces you to make specific, written representations about the property. This creates a legal record that can be used to directly challenge the broad, sweeping protection a seller might think they are getting from an "as is" clause. If your signed PCDS says there are no known water issues, but you knew about a recurring leak, the "as is" clause in your contract will likely offer you no protection in a subsequent lawsuit. A court would almost certainly view the specific, legally mandated representation on the PCDS as trumping the general "as is" clause, making it far easier for a buyer to prove fraudulent misrepresentation.  

Active Concealment and Material Latent Defects

The legal concept you must understand is that of a material latent defect.

·         A defect is a problem with the property.

·         A material defect is a significant one—a problem that would likely affect the property's value or a reasonable person's decision to purchase it. A dripping faucet is a defect; a cracked foundation is a material defect.  

·         A latent defect is one that is hidden and not discoverable through a normal, competent home inspection.  

Therefore, a material latent defect is a significant, hidden problem. "Active concealment" occurs when a seller knows about such a defect and takes steps to hide it from the buyer.  

Here is a classic Hudson Valley example: Imagine you know your fieldstone basement gets a foot of water during every heavy spring rain. In the dry autumn season, you strategically apply a fresh coat of waterproof paint over the high-water marks and then list the house for sale. You fail to mention the water issue on the PCDS. A buyer's inspector comes through on a sunny day and sees a clean, freshly painted basement. That is a textbook case of active concealment of a material latent defect. An "as is" clause will not protect you from a lawsuit when that buyer's basement floods for the first time the following April.

Disclosures Beyond the PCDS: Federal and Stigmatized Property Rules

While the PCDS is the primary disclosure document for New York State, it is not the only one. Sellers must also comply with specific federal laws and understand the state's unique rules regarding "stigmatized" properties.

Disclosures You Can't Avoid, No Matter What

These requirements are separate from and in addition to the New York State PCDS. They apply regardless of any state-level exemptions.

Federal Lead-Paint Disclosure

This is a non-negotiable federal requirement. For any residential property built before 1978, the Residential Lead-Based Paint Hazard Reduction Act requires sellers to perform three specific actions :  

1.      Provide the Pamphlet: You must give all potential buyers the official EPA pamphlet, "Protect Your Family From Lead in Your Home".  

2.      Disclose Known Hazards: You must disclose the presence of any known lead-based paint and/or lead-based paint hazards in the home. You must also provide the buyer with any available records or reports you have pertaining to lead-based paint in the house.  

3.      Offer an Inspection Period: You must provide buyers with a 10-day period to conduct their own lead-based paint inspection or risk assessment. The buyer can choose to waive this right, but you must give them the opportunity.  

These federal rules are strictly enforced, and failure to comply can result in significant penalties.

"Stigmatized Properties": Death, Crime, and Hauntings in New York

One of the most common questions sellers ask is, "Do I have to disclose that someone died in the house?" This falls under the category of "stigmatized property" disclosures.

Under New York Real Property Law § 443-a, events that may psychologically impact a property—such as a homicide, suicide, felony, or even suspected paranormal activity—are not considered material defects. This means you, the seller, have no legal obligation to proactively volunteer this information.  

However, there is a critical exception that creates a delicate strategic dance. The law states that if a buyer submits a written inquiry asking about such events, you must respond. You have two choices: respond truthfully if you have knowledge, or choose not to respond at all. You cannot lie. This provision is a powerful but often underutilized tool for buyers. A seller receiving such a request is put in a difficult position. Answering "yes" could scare off the buyer. Refusing to answer, while legally permissible, is often interpreted as a "yes" anyway and can also kill the deal. This is precisely why you must discuss a potential response strategy with your attorney  

before you list your home, so you are not caught off guard by such a request during sensitive negotiations.

Your Disclosure Process: A Strategic Blueprint

Navigating these complex requirements should not be a reactive, last-minute scramble. The best way to protect yourself is to adopt a proactive, systematic approach. Treat the disclosure process as a formal risk-mitigation project, not just another piece of paperwork to sign.

Milestone 1: The Attorney Consultation

Your absolute first step, before your home is even listed, should be to engage a qualified New York real estate attorney. This is not a corner to cut to save money. Your attorney's role is to be your primary legal shield. They will advise you on your specific disclosure obligations, help you interpret the questions on the PCDS, and craft a strategy that minimizes your liability. Your real estate agent's job is to market and sell your home; your attorney's job is to keep you out of court.  

Milestone 2: The Honest Home Audit

Before you ever look at the official PCDS form, conduct your own private, honest home audit. Walk through your property, from the attic to the basement, and make a detailed list for your own records. Note every known issue, every past repair, every quirk, and every improvement. When did the roof last leak? Is the dishwasher temperamental? Did you have a pest control company treat for carpenter ants three years ago? Write it all down. This document is for you and your attorney's eyes only; it is your raw data for completing the PCDS accurately.

Milestone 3: The Document Gathering

Now, build the evidence file to support your audit. Create a binder or digital folder and gather all relevant paperwork that substantiates your home's history. This includes:

·         Permits and certificates of occupancy for any renovations or additions.

·         Warranties for major appliances, the roof, windows, or mechanical systems.

·         Receipts and invoices for significant repairs (e.g., new HVAC system, foundation work, septic pump-out).

·         Any previous home inspection reports you may have from when you purchased the property.

·         Utility bills if they show anything unusual that needs explanation.

This file is not just for your reference. It is your defensive record. Should a buyer ever claim you "willfully" failed to disclose a defect, this file serves as contemporaneous proof of your state of knowledge at the time of the sale and demonstrates that you acted in good faith.

Milestone 4: The Final Execution

With your audit complete and your documents gathered, you are now prepared to execute the final step. Sit down with your attorney to meticulously complete the official Property Condition Disclosure Statement. Use your audit list and supporting documents as a guide to answer each question truthfully and accurately. Your attorney will help you phrase your explanations for any "Yes" answers in a way that is factual and minimizes ambiguity. This collaborative effort ensures that your final, signed PCDS is both compliant with the law and protective of your interests.

What Happens If a Seller Lies on the PCDS?

With the PCDS now being a mandatory, signed affidavit of your knowledge, the consequences of dishonesty have become far more severe. The form itself warns that a "knowingly false or incomplete statement by the seller on this form may subject the seller to claims by the buyer prior to or after the transfer of title".  

Previously, a buyer suing a seller had to overcome the high legal bar of proving the seller knew about a latent defect and actively concealed it. Now, the buyer has a signed document where the seller has made explicit representations. This document dramatically lowers the barrier for a buyer to bring a lawsuit and significantly improves their chances of success. It effectively shifts the burden of proof. It's no longer just the buyer's word against the seller's; it's the buyer's evidence (an expert report, a repair invoice) against the seller's signed, legal statement.  

The potential legal and financial consequences for willful inaccuracy are severe:

·         Lawsuits for Actual Damages: The most common outcome is the buyer suing you for the actual cost to repair the defect you failed to disclose. A new roof, a foundation repair, or a mold remediation project can easily run into the tens of thousands of dollars.  

·         Claims of Fraud and Misrepresentation: Lying on a legal disclosure document is not just a breach of contract; it can be considered fraud. These claims are more serious, harder to defend, and can sometimes lead to punitive damages.  

·         Skyrocketing Legal Fees: Litigation is expensive. You will be responsible for your own attorney's fees, and if you lose, you could be ordered to pay the buyer's legal fees as well.  

·         Rescission of the Sale: In the most extreme cases of fraud, a court has the power to rescind, or unwind, the entire sale, forcing you to take back the property and return the purchase price.  

LEGAL DISCLAIMER: The information provided in this guide is for educational and informational purposes only and does not constitute legal advice. I, Levan Tsiklauri, am a licensed real estate salesperson, not an attorney. The laws regarding property disclosure are complex and subject to change. You must consult with a qualified New York real estate attorney to understand your specific legal obligations and to receive advice tailored to your individual situation.

Conclusion and Your Next Step

Navigating New York's real estate disclosure laws has always been a critical part of a successful home sale, but the recent changes have raised the stakes considerably. The key takeaways are clear: the law now mandates full disclosure via the Property Condition Disclosure Statement. The old $500 credit shortcut is a thing of the past. In this new landscape, transparency, honesty, and professional guidance are not just best practices—they are your best legal protection. A successful, secure, and legally-sound sale is a partnership between you, your real estate agent, and your attorney.

Properly navigating your legal disclosures is the critical first step in a comprehensive selling strategy. If you're considering selling your home in the Hudson Valley and want an expert guide to manage every detail with confidence—from legal prep to final closing—let's talk. Click below to schedule your Free, No-Obligation Seller Consultation with me, Levan Tsiklauri.

Levan Tsiklauri (LT) | Realtor®| [ Book a Consultation▸]

(917) 905-7923 | Levan@realtylt.com | www.realtylt.com

RealtyLT | United Real Estate | 1097 Route 55, Suite 9, Lagrangeville, NY 12540