Everything You Need To Know About New York Real Estate laws

by ECL Writer
New Home Construction Defects in New York

New York real estate laws are complex and ever-changing. Whether you are a first-time home buyer, a seasoned real estate investor, or a landlord or tenant, it’s important to understand the laws that govern real estate transactions and property ownership in New York State. From zoning regulations and property taxes to landlord-tenant disputes and foreclosure proceedings, there is a wide range of legal issues that can arise in the course of owning or renting real estate in New York. In this article, Eastcoastlaws.com will provide an overview of some of the key New York real estate laws that you should be aware of so that you can make informed decisions and protect your rights as a property owner or tenant.

Table of Contents

Buying a House or Property in New York State

You Want Both a Lawyer and Real Estate Agent to Buy New York Home

Contrary to several jurisdictions, New York state and NY real estate law require you to hire an attorney to draft the contract of sale and represent you at the closing in addition to a real estate agent to market and negotiate offers on the property. So, you’ll need both a real estate agent and an attorney in NY.

Real Estate Agent’s Role in a New York Home Purchase

Although using a buyer’s agent is optional when buying a house, many buyers do so in order to aid in the home search and offer writing process. A buyer’s agent can help you find and view properties that fit your needs, provide you advice on “comps,” or the prices at which properties similar to yours recently sold, and assist you in setting the offer price.

The basic parameters of the deal will then be negotiated by your agent on your behalf with the sellers’ agency. These conditions cover the purchase price, whether the closing is subject to your securing a mortgage, and any personal items or fixtures that will not be included in the transaction. Your agent can assist you in completing a one-page offer form that the sellers’ agent provides; the form will vary from firm to firm. The offer form is not a binding contract, as it would be in some other jurisdictions, and you are not required to complete the purchase.

Your realtor will go with your home inspector when they inspect your house once the seller accepts your offer, and they will let you know if any issues are found. Moving forward, your agent will also collaborate with your attorney to talk to the sellers, settle any problems with the contract’s wording, and help arrange a close. (Remember that until that contract is signed, the seller is not required to proceed with the transaction.)

Attorney’s Role in a New York Home Purchase

In New York, it is typical for the sellers’ attorney to draft the initial version of the purchase agreement. The majority of sellers’ lawyers begin with a standardized form and then add a rider with additional provisions that need to be discussed with the purchasers. Also, your attorney will probably add a new rider to the contract containing conditions that need to be worked out with the sellers.

You and the sellers will sign the contract after the lawyers have finished working on it, and you will send the sellers’ lawyer a down payment that you could lose if you walk away from the deal without a reason specified in the contract (this is similar to what is known as “earnest money” in other states). The sellers’ lawyer will usually deposit the down payment into an escrow account, which is typically 10% of the purchase price in New York State.

Your attorney will need to take a number of steps to get ready for closing after the contract is signed. To check if there are any difficulties that sellers need to settle prior to closing, the lawyer will initially order a title report. Liens or infractions against the property may be among them.

Second, your lawyer will assist you in supplying the data and paperwork that lenders will need in order to process your mortgage applications. Third, your lawyer will determine the sums you owe to the sellers, the sellers’ lender, the title firm, and other parties at closing.

Finally, your lawyer will act as your representative at the closing, evaluating and advising you on the paperwork you’re signing, including the mortgage documentation, transfer tax returns, and deed, as well as making sure that all payments are completed appropriately.

Seller Disclosure Requirements in New York

You want a real estate agent who is knowledgeable about New York state real estate laws and who can respond to your inquiries about New York real estate law when you are buying a home in New York and are choosing from top real estate agents in New York and from real estate law companies in NYC. The seller disclosure obligations give rise to some of the most crucial legal issues. The seller is required to list all known flaws in the home in the disclosure statements that are required under the New York Property Condition Disclosure Act, or PCDA. If this is not done, the seller will automatically owe the buyer $500 at closing.

Moreover, even if the seller pays the $500 and waives disclosure, the seller may still be responsible to the buyer for any losses brought on by the lack of disclosure. But neither a home inspector nor an investigator is required to be employed by the seller. Once more, the seller is merely required to disclose the property’s known flaws.

Home Inspections in New York

The process of purchasing a home in New York State can significantly alter one’s life, and one of the crucial phases is home inspection. If the plumbing, electrical, and appliance systems are up to code, whether the appliance has been installed correctly, and other issues are all possible to find during a home inspection. The cost of a house inspection is borne by the buyer. Before a contract is signed, the inspection must be finished if you decide to have one. Visit the websites of the American Society of House Inspectors or the New York State Association of Home Inspectors to find one, or ask friends, coworkers, your agent, or an attorney for recommendations.

Contracting Procedures in The State of New York

For instance, when you make an offer to buy a house in New York and the seller accepts it, nothing legally prevents either side from withdrawing, essentially for any reason, unlike in many other states. When the two of you have signed a formal contract, or are “in contract,” which normally happens at least one week after the seller accepts your offer, you and the seller will really be legally obligated to finalize the property acquisition. You, the buyer, will need to submit what’s known as a “downpayment” when signing the contract, which is normally 10% of the purchase price. This is another significant distinction from the procedures in many other states. Contrast this with the down payment, which is normally an additional 10% of the purchase price and will likely be requested by your mortgage lender at the closing. This is more analogous to the earnest money deposit paid in other states, which serves as liquidated damages in the event that you break the agreement and cancel the transaction.

What it Means to be “in Contract” When Buying a Home in New York

In New York, submitting an offer to buy a house often involves filling out a brief offer form that the selling broker provides. You are not required to sign a sample contract when you make your offer, in contrast to other jurisdictions. It’s obviously wonderful news if the New York seller accepts your offer because it shows that the seller is genuinely eager in moving forward with the transaction. The seller’s broker may only verbally inform you or your broker, if you have one, of the seller’s acceptance. Even though this is fantastic news, neither of you is yet obligated to complete the property transaction.

As a result, it’s crucial that you and your lawyer move as fast as you can to complete and sign a contract of sale with the sellers when your offer is approved. All of the conditions of the deal, including the price, contingencies, and closing date, will be spelled out in this contract. You should have the property inspected before signing such a contract in New York, and if you’re buying a coop or condo, your lawyer should evaluate the building’s books and records, including financial statements. The contract of sale will be drafted and negotiated by both your attorney and the sellers’ attorney. You can sign the contract once these procedures are finished.

Delivering the Downpayment After Signing the New York Home Purchase Contract

You will also be required to present 10% of the total cost of your new New York home when you sign the contract and give it to the sellers’ attorney. A certified check, wire transfer, or personal check payable to the seller’s lawyer or firm and deposited in an escrow account may be acceptable forms of payment. Your personal lawyer will provide you with detailed instructions. The down payment will be subtracted from the purchase price, with the remaining balance being payable at closing.

Check that you have enough money in your account to meet the down payment before paying via personal check. In many contracts, if a down payment check is returned unpaid, the sellers have the right to cancel the agreement. The sellers will then sign and give your attorney their signing pages. You and the sellers are currently “in contract,” which means that neither party can leave without committing a breach and assuming legal responsibility.

At present time, the home sellers are not permitted to use the downpayment funds for personal purchases. Your down payment must be kept in an attorney escrow account by the sellers’ attorney while the sale is ongoing. The account utilized will typically not pay interest.

Using the Downpayment at Closing

You should arrange the required mortgage financing during the escrow period, and your lawyer will check the title to make sure there are no liens or other obstructions against the property. If everything goes according to plan, there will be a closing where you will receive the home’s title and money will be exchanged. The remaining amount of the purchase price will subsequently be required from you in the form of a certified or bank check. You’ll probably pay 10% more of the purchase price at this point than you did when you signed the contract, on top of the 10% you already spent. The remainder will be covered by the mortgage lender.

The down payment will probably be used by the sellers’ attorney to cover closing costs. Real estate transfer taxes, broker fees, and legal costs for the sellers’ attorney are a few examples. If any of the down payment is still owed, the seller will get the balance from the seller’s attorney.

Using the Downpayment as Liquidated Damages If the Deal Doesn’t Close

You and your attorney should try to convince the sellers to agree to terminate the contract and restore your down payment if, after signing a contract, you decide (without a reason supported by the contract) that you no longer wish to buy the home. The sellers might be able to keep your down payment if they refuse to agree to this and you back out of the deal. In New York, the majority of residential real estate contracts include language allowing sellers to retain the down payment as “liquidated damages” in the event that the buyer defaults. If you decline to close for a cause that is not specified in the contract, there has been a default.

However, rest assured that if your contract has contingencies, or conditions based on which the agreement may be terminated without either party being in default, and you are terminating based upon one of those contingencies, your downpayment will not be at risk. You won’t be in default and should be able to terminate the contract without facing any repercussions if, for instance, you included a mortgage commitment contingency and ultimately weren’t able to obtain a mortgage.

But, the sellers will let you know that they need the down payment if you actually default, for instance, if your plans change and you decide to stay in your current home or relocate to a different city. The seller’s attorney cannot release the downpayment to his or her clients unless you object within ten days. Instead, you’ll probably find yourself involved in a legal dispute over who gets to keep the down payment.

Co-op Purchase Contracts

When you purchase a co-op apartment, you are actually purchasing stock in the company that owns the building rather than the unit itself. In return, the business will provide you with an exclusive lease so that you can live in the apartment. The contract of sale must address various difficulties than it would if you were purchasing a condo unit or a home since purchasing a co-op is not a conventional real estate purchase.

What Your Co-Op Contract Might Say About Co-op Board Approval

The owner-board corporation of directors must likely give its permission before you may purchase a co-op apartment. As a result, the co-op contract will outline the actions you need to do to get the co-op board’s approval as well as any timeframes for doing so, as a backup plan before the deal may close. The standard form contract for New York co-ops, for instance, mandates that buyers submit an application on a form provided by the board and pay any application fees levied by the board. The buyer is often required to provide comprehensive financial documentation with their application, such as pay stubs, bank statements, and income tax returns, as well as personal and professional references. The board will also request to examine the loan commitment letter that your bank has issued if you are applying for a mortgage.

The number of days you have to submit your application and the circumstance that will cause those days to expire are typically specified in co-op contracts. In New York, you normally have three business days from receiving a loan commitment letter and ten business days from delivery of the completely completed contract if you are seeking a mortgage.

Your co-op contract probably calls for you to participate in an interview with the board as part of the application process. The board’s decision about your application won’t likely be made until its subsequent monthly board meeting. Thus, if the board has not made a decision by the scheduled closing date, your co-op contract ought to permit the closing to be delayed.

The closing may be postponed by 30 days according to the typical New York co-op contract. Because time is of the essence in co-op sales in New York, this permission to delay the closing is expressed expressly. This means that in New York if the board has not made a decision after one 30-day postponement, either side may cancel the contract. Also, your contract should state that you will receive any down payment or deposit you paid if the board rejects your application.

What Your Co-Op Contract Might Say About Your Right to See Corporate Documents

The majority of co-op agreements have language saying that you reviewed the corporation’s records before signing the agreement or that you relinquished your right to do so. The offering plan, the certificate of incorporation, the bylaws, the proprietary lease, the house rules, the minutes of the meetings of the shareholders and directors, the most recent audited financial statements, and the most recent statement of tax deductions available to the shareholders of the corporation are examples of such documents.

Never give up this right! Before you sign the contract, your lawyer should carefully analyze these documents to evaluate the corporation’s financial situation and the building’s physical condition. For instance, these documents can indicate that the company plans to make significant capital renovations, such as repairing an elevator or painting a brick façade, which could result in a shareholder assessment if the company doesn’t have enough reserve cash.

These records will also show if the cooperative levies a “flip tax.” A “flip tax,” which the seller pays to the corporation at closing in many co-ops, is imposed. The method used to determine that flip tax is specified in the corporation’s bylaws. It is probable to use one of two methods: a percentage of the purchase price, a percentage of the seller’s profit, or a fixed amount per share.

If there is a flip tax assessed by the corporation that owns the co-op apartment you are buying, your contract should state that the seller is responsible for paying it.

Co-Op Seller Information About Defects and Renovations

Last but not least, the seller should include a number of assurances in the contract regarding the state of the particular co-op flat you are buying. These assurances should state that there are no leaks or bedbugs in the apartment and that all appliances will be supplied at closing in a functional state. Consider this a warning sign that there might be an issue if the vendor declines to make one or more of these promises. Continue your research. To determine whether there might be a problem with the unit, your lawyer or broker should question the seller’s lawyer or broker. Before you sign the lease, if you haven’t done so already, contact an expert to inspect the unit. Depending on what you discover, you can choose to abandon the purchase, request a price reduction, or proceed with the deal as scheduled.

Additionally, the co-op seller must guarantee that any substantial improvements made to the apartment were done so in accordance with the law and with the co-op board’s approval. If they weren’t, the board can impose a condition on closing that the seller makes the apartment compliant, which might severely push back your closing date. If you need to finish the purchase soon, you might want to back out.

Selling A House Or Property In New York State

You Want Both a Lawyer and Real Estate Agent to Sell A New York Home

Contrary to several places, New York State and NY real estate law require you to hire an attorney to draft the contract of sale and represent you at the closing in addition to a real estate agent to market and negotiate offers on your house. So, you’ll need both a real estate agent and an attorney in NYC.

Real Estate Agent’s Role in a New York Home Sale

Selling your own house in New York State necessitates having a real estate professional on your side. The realtor will provide you advice on “comps,” or the prices at which similar properties have recently sold, and assist you in choosing the listing price for your home. Your real estate agent will also provide you with marketing tips, such as staging your property or making improvements or other modifications to increase the likelihood that it will sell quickly for the best price.

Your house will be advertised in many locations, including his or her firm’s website, local print, online newspapers, and online real estate listings. They will arrange for photographs of your home to be taken, and they will utilize those photographs in marketing materials. Your agent will be in charge of arranging for private viewings or open houses for prospective purchasers, receiving any bids from them, presenting the written contracts to you, and negotiating the fundamental conditions of the sale on your behalf.

These conditions cover the asking price, whether closing is subject to the buyer receiving a mortgage, any personal property to be included in the sale, and any fixtures to be excluded. A one-page offer form, which varies from company to company, will be provided by your broker to prospective purchasers so they may submit their offer to buy your house. In contrast to other states, New York does not consider the offer form to be a legal document that binds the buyer to complete the transaction.

After the buyer accepts your offer, your agent will inform them verbally of your acceptance, create a term sheet, send it to both your and the buyer’s attorneys, and accompany the buyer’s home inspector while they evaluate your house. Your agent and your lawyer will next collaborate to communicate with the buyer, resolve any problems that surface during the contract’s drafting, and enable the scheduling of a close after the home inspection is over.

Attorney’s Role in a New York Home Sale

Your attorney will draft the contract of sale when you sell your own home in the state of New York. The majority of seller’s attorneys begin with a basic form and then add a rider with extra stipulations that must be negotiated with the buyers. You and the purchasers will sign the contract after the lawyers have finished working on it, and the buyer will send your lawyer a down payment that they could lose if they walk away from the deal without a valid cause specified in the document. The down payment is typically 10% of the purchase price in New York State, and your lawyer will put this money into an escrow account under their supervision. Your real estate lawyer in NYC will need to take a number of actions to get ready for the closing after the contract is signed.

To determine whether there are any concerns that need to be resolved before closing, the lawyer will first go over the title report that the buyers’ attorney had requested. Liens or infractions against the property may be among them. The deed and transfer documentation, as well as any other closing papers, will be prepared by your attorney. Third, your lawyer will determine the sums due at closing, which may include closing costs for NYC coops, NYC condos, and NYC buyer condos.

Your lawyer will ask for a pay-off letter if you have a mortgage in order to figure out how much is owed to your lender. Your lawyer will also figure up the closing expenses you have to pay and the money the buyers owe you.

New York Sellers’ Duty to Disclose

Early on in the evolution of this legislation, New York courts established exceptions to the “caveat emptor” principle, raising the seller’s potential exposure to the buyer for faults. An unreported flaw may be the responsibility of a seller who has a particular trust relationship with the buyer, such as trustee-beneficiary, guardian-ward, agent-principal, or attorney-client.

Also, a vendor who purposefully hid a flaw can be held accountable by the customer for any harm the deficiency resulted in. According to Laxer v. Edelman, 75 A.D. 3d 584 (2d Dept. 2010), active concealment occurs when a seller interferes with the buyer’s efforts to inspect the property while also being aware of a fault that should have been disclosed.

Disclosure Requirements Under the Property Condition Disclosure Act

The New York legislature established the Property Condition Disclosure Act (the PCDA) (N.Y. Real Prop. Law 460-467) to supplement the court’s conclusions. It mandates specific disclosures from home sellers, or they must provide the home buyer a $500 closing-cost credit. In New York, the majority of house sellers, if not all of them, choose to pay the credit instead of completing the statement. Let’s examine what the PCDA disclosure requirements entail for New York home sellers in more detail.

Who Must Make Property Disclosures in New York

The law defines “residential real property” as a one- to four-family dwelling that is either already utilized as a home or residence by one or more people, or planned to be used as such a home or residence, in order to determine which properties are covered by the PCDA. Condominium units, cooperative apartments, undeveloped land on which the owner plans to build a home, and non-seller-owned property in a homeowner’s association are not included in the phrase. (N.Y. Real Prop. Law § 461(5).)

The law is applicable to all contracts for the acquisition of “residential real property,” including long-term installment contracts and leases that contain an obligation or an option to acquire the property in addition to regular purchase agreements.  (N.Y. Real Prop. Law § 461(4).)

Types of Disclosures New York Property Sellers Must Make

A copy of the standard form disclosure statement, which is required under the PCDA, is available on the website of the New York Department of State. The disclosure statement’s language, which is taken directly from the law, asks a number of questions regarding the property that are grouped by subject, such as:

  • General information: age, ownership, utility surcharges, and possession of the property
  • Environmental: whether the property is located within a flood plain, wetlands, or agricultural district, near a landfill; whether the property contains asbestos, lead pipes, or fuel storage tanks; whether a radon test has been performed on the property; or whether petroleum products or hazardous or toxic substances are known to have been spilled, leaked, or otherwise released on or from the property
  • Structural: water, fire, smoke, or insect damage and the condition of the roof, beams, and other such elements, and
  • Mechanical systems and services: utilities, water source, and quality, sewers, drainage, flooding.

The disclosure statement also asks you to mark any appliances or structural elements of the property that have known flaws, including plumbing, heating, cooling, hot water, security and other detection systems, walls, sump pumps, flooring, chimneys, patios, decks, and driveways. In the spaces provided on the form, please provide a detailed description of any malfunctioning systems or components. (N.Y. Real Prop. Law § 462.)

Are You Exempt From the Disclosure Law?

There are some types of property transfers that are excluded from the PCDA and do not need you to complete and send the disclosure statement, including the following:

  • transfer ordered by the court in a lawsuit such as a probate, mortgage foreclosure, bankruptcy, legal partition, or divorce
  • transfer to your lender to satisfy your mortgage or prevent a foreclosure
  • transfer made to distribute the property of a decedent’s estate or trust, or made during the administration of a guardianship or conservatorship
  • transfer to another co-owner of the property, or to your spouse or a relative from a common ancestor, such as a parent, grandparent, child or grandchild
  • transfer that has not been ordered by a court, but is part of the settlement of a divorce, annulment, or legal separation
  • transfer to the state of New York, or any other unit of local government, whether part of a condemnation, or not, and
  • transfer of newly constructed property that has never been inhabited.

(N.Y. Real Prop. Law § 463.)

Procedure for Completing and Delivering the Disclosure Statement

You must be reminded of your disclosure obligations under the PCDA by the real estate broker, agent, or salesperson who is representing you in the sale of your home. This person is typically referred to as the listing broker, and they will likely provide you with a copy of the standard form disclosure statement. Every unrepresented buyer must also receive this information from the listing broker. Any listing broker who neglects to alert you or the buyer to the PCDA may be held responsible for this breach by both of you.

The disclosure statement must be completed by thoroughly addressing any known flaws in the product in the space provided on the form or on a separate piece of paper that you attach. The certification is then signed, and it is positioned near the bottom of the final page. By signing the form, you certify that all of your responses and any supporting information are accurate and up-to-date as of the date indicated.

Before the buyer signs the final purchase contract, the disclosure statement must be completed and delivered to them. The buyer or the buyer’s agent will typically get the completed disclosure statement from the listing broker. You can give the disclosure statement to the buyer or the buyer’s agent directly if there is no listing broker. The final step is for the buyer to acknowledge receipt and understanding by signing the form’s acknowledgment section. The final, signed purchase contract should include a copy of the form that has been filled out.

Required Disclosures: Risks and Penalties

If you fail to timely complete and deliver the disclosure statement, you will owe the buyer a $500 credit toward the purchase price at the closing. (N.Y. Real Prop. Law § 465(1)). Numerous New York sellers’ lawyers view this relatively light fine as a chance for their clients to opt out of the PCDA by paying the $500 instead of submitting the form, and they see this as a way to reduce the possibility of future responsibility for omissions on the form.

Paying the $500 statutory remedy, however, will not shield you from liability under the aforementioned case law caveat emptor exceptions. Hence, before deciding not to fill out the form or not to otherwise reveal a substantial flaw in the property, you should speak with an attorney. Ask the buyer to confirm in writing that the $500 credit was accepted in place of the disclosure statement if you choose to give it instead.

If a disclosure statement is timely sent, whether or not it includes a correction or update, you could be held legally responsible for the buyer for “willful failure to perform” the obligations. (N.Y. Real Property Law, Section 465(2)) The term “willful failure to perform” as used in the PCDA has been strictly defined by New York courts. It’s likely that you won’t be held accountable to the buyer for a disclosure statement error unless the error genuinely stops the buyer from learning about the flaw via routine inspections or the problem could not reasonably have been detected during an inspection.

You may be obliged to cover the buyer’s actual losses brought on by the defect if you are found accountable to the buyer for a “willful failure to perform” the PCDA requirements.

Federal Law Requiring Lead Disclosure

The Home Lead-Based Paint Hazard Reduction Act of 1992, generally known as Title X, requires compliance if you are selling a home constructed before 1978 (U.S. Code 4852d). You have to

  • disclose all known lead-based paint and hazards in the house
  • give buyers a pamphlet prepared by the U.S. Environmental Protection Agency (EPA) called Protect Your Family from Lead in Your Home
  • include certain warning language in the contract as well as signed statements from all parties verifying that all requirements were completed
  • keep signed acknowledgments for three years as proof of compliance, and
  • give buyers a ten-day opportunity to test the house for lead.

As a penalty for failure to comply with Title X requirements, the buyer has the right to sue you for triple the amount of damages actually suffered.

What the Listing Broker Must Disclose

A little background first. When you hire the broker, they will ask you to sign a contract giving them and one or more of their sales agents permission to list the property for sale at a specific price (the “asking price”) and outlining the fee structure. The contract also gives the broker and salesperson permission to list the property with a multiple listing service (an electronic database of information about properties offered for sale, often called the MLS). The broker and sales representatives are referred to as the “listing broker” and the contract is known as the “listing agreement.”

The listing broker will assist you in setting the asking price, liaising with potential purchasers and their brokers (known as buyers’ brokers), and generally assisting you with the contracting, inspection, and closing processes. In order to carry out these duties, the listing broker frequently receives thorough information on the property through appraisals, inspection reports, and surveys and gets to know the property’s condition.

In order to identify houses and serve as a guide during the purchasing process, a potential buyer may also hire a broker. The buyer will frequently query both brokers about the property’s condition—specifically, whether it has any recognized flaws—during the search for a property, the inspection, and the contract negotiations. Does one or both of the brokers have an obligation to disclose known flaws to the buyer or take steps to find and report defects? Let’s take a closer look at what the selling broker and the buyer’s broker are required to learn about the property and reveal it to the buyer.

Background on New York Listing Broker’s Limited Duty to Disclose

The long-standing practice of New York courts to treat real estate transactions under the “caveat emptor” or “let the buyer beware” rule is evolving. Caveat emptor states that it is the buyer’s responsibility to check the property for flaws before making a purchase, and that listing brokers are generally not obligated to provide information regarding flaws in the property.

But, New York’s legal system has historically included exceptions. However, only if the misinformation or omitted information was crucial to the buyer’s decision to buy the property and the buyer relied on the listing broker’s statements when making the final purchase decision. If the listing broker passed information about the property from the seller to the buyer that the broker actually knew was false, or if the listing broker omitted material facts about known defects, the broker may be liable to the buyer for damages. The buyer could not assert reliance on the broker’s statements if the buyer’s inspection turned up any information that would have identified property issues.

The “caveat emptor” principle as it relates to brokers has been softened by more recent court decisions. The New York legislature also introduced some disclosure requirements to the legislation governing real estate broker licensure (in 2002), and further disclosure requirements were added with the enactment of the Property Condition Disclosure Act (the PCDA). (N.Y. Real Prop. Law § § 460-467.)

New York Listing Brokers’ Disclosure Requirements Under the PCDA

Prior to the buyer signing the real estate purchase contract, the listing broker is required to inform the seller of the PCDA’s disclosure requirements. Although it is not required by law, the listing broker normally gives the seller a blank disclosure statement form to fill up. If the buyer is not represented by a broker, the listing broker must also inform the buyer about the PCDA. A listing broker who completes these tasks on time won’t be held responsible for any PCDA infractions.

What New York Listing Brokers Must, and May Not, Disclose to Buyers

New York real estate brokers and agents who engage in fraud or fraudulent practices or dishonest or misleading advertising face fines or revocation or suspension of their license. This comes from Article 12-A of the Real Property Law. (N.Y. Real Prop. Law §§ 440-443) as administered through the Department of State Division of Licensing. (N.Y. Real Prop. Law § 441-C).

According to the legislation, a broker is not typically obligated to check the property to find flaws or to independently confirm the seller’s assertions about it before relaying those details to the buyer. Nonetheless, the broker is required to properly disclose any pertinent facts to the buyer or the buyer’s broker if the broker is aware of a serious fault or believes that the seller has misrepresented the property’s condition. (N.Y. Real Prop. Law § 443.)

Also, the broker must confirm any assertions made by the seller that are included in any marketing or advertising materials for the property.

The New York legislature changed the legislation governing broker licenses in 1995 to relieve brokers of any disclosure obligations in order to end a growing problem with what was referred to as “stigmatized properties”

  • that a previous owner or occupant of the property had or was suspected of having, HIV, AIDS, or other unspecified diseases unlikely to be easily transmittable through occupancy of a dwelling place, or
  • that the property was the site of a felony such as a homicide, a suicide, or another death.

This means that buyers can’t sue brokers who fail to disclose the excluded matters; nor can the brokers face discipline over such acts. (N.Y. Real Prop. Law § 443-A.)

However, the buyer may make a written inquiry to the seller’s agent, or directly to the seller, for this information. The seller can choose not to respond to the inquiry. If the seller chooses not to respond, the listing broker shall not respond.

New York Buyer’s Broker Disclosure Requirements

A New York buyer’s broker is just the buyer’s representative, protecting the buyer’s interests alone, unlike a listing broker or a dual agent. The buyer’s broker owes the buyer undivided allegiance and is required to give the buyer a full disclosure of all information known about the property. A buyer’s broker is not, however, compelled to conduct their own independent inspection of the property to discover any flaws. It is still the buyer’s responsibility to engage inspectors and conduct the necessary research on the property.

Consult a knowledgeable real estate attorney for further information on the disclosure obligations for real estate brokers in New York.

Owning a Home or Property in New York State

What Happens If I Don’t Pay Property Taxes in New York?

A tax foreclosure may result from not paying your home’s property taxes in New York. A New York tax foreclosure operates as follows: The delinquent sum, which includes the accrued taxes, interest, penalties, and charges as a result of the delinquency, becomes a lien on your house when you don’t pay the taxes. Liens are formal claims made against your property. The taxing body can then foreclose the lien in order to recover the unpaid sums. (A few locations in New York sell tax lien certificates, which means they do not foreclose on homes to recover unpaid taxes but rather sell the lien that is already in place on the property.

The process of foreclosing on taxes in New York is comparable to that of foreclosing on a home. In court, a petition (lawsuit) is presented. The court will enter a default judgment against the property if you don’t address the action and include a list of your defenses. If you don’t respond to the lawsuit, you immediately lose by “default judgment.” The property is then either sold at auction or simply transferred to the tax district.

But, you will have some time to make the necessary corrections to stop a tax foreclosure. Learn what kind of notice you’ll get if you’re facing tax foreclosure in New York and how to stop the procedure to keep your home from being taken away from you by reading on.

Notice of the Tax Foreclosure

A notice of foreclosure must be published in a newspaper at the time the foreclosure petition is filed (N.Y. Real Prop. Tax Law 1124). The enforcing officer shall give you notice of the commencement of the foreclosure via certified and first-class mail on or before the first day of publication. New York Real Property Tax Law 1125. The notification must include the redemption deadline, which must be at least three months from the date of this notice’s initial publication (see below). New York Real Property Tax Law 1124.

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