A New York residential real estate purchase agreement (“Contract for Sale and Purchase of Real Estate”) is a contract which commits a buyer to an offer to purchase real estate, according to specific terms agreed by the buyer and seller. Negotiated specifics include the purchase price, financing method, closing date, and more.
Do Sellers in New York Have To Disclose Property Defects?
New York does require real estate sellers to disclose any material defects with a property. In most cases, this is through a standardized disclosure form provided under the Division of Licensing Services by statute, but any disclosure which provides the required information is valid.
The seller always has a duty to disclose all material defects covered by the statutory requirement, even when the buyer agrees to take the property “as-is.”
Exceptions to the Disclosure Rules in New York
Any fact which might materially affect the value of a property potentially counts as a material defect, except for the following:
- Whether anyone at the property was ever diagnosed with HIV or another disease not related to management of real property
- Whether the property was ever the site of a death or felony
New York also exempts the following common transfers, among others, from the standard disclosure form requirement:
- Court-ordered sales and transfers
- Sales by foreclosure or other debt default
- Transfer as part of the execution of a will or estate
- Transfer to a spouse, parent, or child
- Transfers to or from a government entity
Required Seller Disclosures in New York
New York sellers of residential real estate must make the following disclosures, as appropriate, in order for a real estate purchase agreement to be considered legally binding:
- Property Condition Disclosure Statement: Discloses material defects with a property that are known to the seller at the time of sale, and details any potential issues and conditions that may affect the value of the property.
- Lead-Based Paint Disclosure: Any home constructed earlier than 1978 must come with a disclosure upon the transfer of the property which includes any information about the presence of lead on the premises, as well as educational materials that communicate the health risks associated with lead exposure.
Sources
- 1 N.Y. Real Prop. Law § 462(1)
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Except as is provided in section four hundred sixty-three of this article, every seller of residential real property pursuant to a real estate purchase contract shall complete and sign a property condition disclosure statement as prescribed by subdivision two of this section and cause it, or a copy thereof, to be delivered to a buyer or buyer’s agent prior to the signing by the buyer of a binding contract of sale. A copy of the property condition disclosure statement containing the signatures of both seller and buyer shall be attached to the real estate purchase contract. Nothing contained in this article or this disclosure statement is intended to prevent the parties to a contract of sale from entering into agreements of any kind or nature with respect to the physical condition of the property to be sold, including, but not limited to, agreements for the sale of real property “as is”.
- 2 N.Y. Real Prop. Law § 443(1)
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Notwithstanding any other provision of law, it is not a material defect or fact relating to property offered for sale or lease, including residential property regardless of the number of units contained therein, that:
(a) an owner or occupant of the property is, or was at any time suspected to be, infected with human immunodeficiency virus or diagnosed with acquired immune deficiency syndrome or any other disease which has been determined by medical evidence to be highly unlikely to be transmitted through occupancy of a dwelling place; or
(b) the property is, or is suspected to have been, the site of a homicide, suicide or other death by accidental or natural causes, or any crime punishable as a felony.
- 3 N.Y. Real Prop. Law § 463
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A property condition disclosure statement shall not be required in connection with any of the following transfers of residential real property:
1. A transfer pursuant to a court order, including, but not limited to, a transfer order by a probate court during the administration of a decedent’s estate, a transfer pursuant to a writ of execution, a transfer by a trustee in bankruptcy or debtor-in-possession, a transfer as a result of the exercise of the power of eminent domain, and a transfer that results from a decree for specific performance of a contract or other agreement between two or more persons;
2. A transfer to mortgagee or an affiliate or agent thereof by a mortgagor by deed in lieu of foreclosure or in satisfaction of the mortgage debt;
3. A transfer to a beneficiary of a deed of trust;
4. A transfer pursuant to a foreclosure sale that follows a default in the satisfaction of an obligation that is secured by a mortgage;
5. A transfer by a sale under a power of sale that follows a default in the satisfaction of an obligation that is secured by a mortgage;
6. A transfer by a mortgagee, or a beneficiary under a mortgage, or an affiliate or agent thereof, who has acquired the residential real property at a sale under a mortgage or who has acquired the residential real property by a deed in lieu of foreclosure;
7. A transfer by a fiduciary in the course of the administration of a descendent’s estate, a guardianship, a conservatorship, or a trust;
8. A transfer from one co-owner to one or more other co-owners;
9. A transfer made to the transferor’s spouse or to one or more persons in the lineal consanguinity of one or more of the transferors;
10. A transfer between spouses or former spouses as a result of a decree of divorce, dissolution of marriage, annulment, or legal separation or as a result of property settlement, agreement incidental to a decree of divorce, dissolution of marriage, annulment or legal separation;
11. A transfer to or from the state, a political subdivision of the state, or another governmental entity;
12. A transfer that involves newly constructed residential real property that previously had not been inhabited;
13. A transfer by a sheriff; or
14. A transfer pursuant to a partition action.
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