What Must I Disclose To Potential Buyers?
As a Seller you do not have to disclose detailed information to potential Buyers. This is because in New York, the rule or law is Caveat Emptor or “Buyer Beware”, which means that the Purchaser must diligently inspect the condition of the property and it is the Buyer’s obligation to identify any issues or concerns regarding the property. The risk falls on the Purchaser to inspect and evaluate all aspects of the property.
However, if there is any unsafe or hazardous condition, and it is intentionally omitted or hidden by the Seller, this would be an exception to this rule. When it comes to dangerous conditions or hazardous substances, you should remediate this condition and disclose the issue to the Buyer prior to signing the Contract of Sale.
In addition, you have the option to provide a Property Condition Disclosure Statement to the Buyers in New York State. The disclosure statement is a statutory form that the Seller must fill out advising the Buyers on various elements regarding the condition of the property. Here is a copy of the statute, Real Property Law Section 462, which contains the language in the Property Condition Disclosure Statement form:
In the New York City area and surrounding suburbs in NY such as Nassau County, Westchester County, and Suffolk County, most Sellers provide a $500 credit to the Purchaser at closing instead of providing the Property Condition Disclosure Statement. Providing the $500 credit instead of the Property Condition Disclosure Statement does afford the Seller some protection post-closing as the Purchaser may try to use this document to claim fraud or concealment of a dangerous condition after the closing. The reasoning behind giving the $500 credit instead of the statement is to protect against this possible post-closing occurrence and to help cut of Seller’s post-closing legal risks. However, in Connecticut and upstate New York, it is customary for the Seller to fill out the Property Condition Disclosure Statement. If you are a Seller and you need assistance making this choice, it is suggested that you confer with a real estate attorney and discuss your options in more detail.
Since the Buyer is responsible for doing their due diligence in obtaining much of the information regarding the condition of the property, it is a good legal advice for Sellers to minimize the amount of disclosure to the Buyer. There is a famous expression that “no good deed goes unpunished”. So, while you may want to provide the Buyer with documents and information that you think will be helpful, you should be aware of the possibility that this transparency may reveal a condition and the Purchaser may raise an objection based on your voluntary disclosure. For the sale of a house, it is customary and appropriate for the Seller to provide the Purchaser with the following information if in your possession:
- Existing Title Insurance Policy
- Marked Up Title Report from Sale
- One-Year worth of energy bills
- Existing Title Survey if you have one
You should discuss any disclosure with your attorney prior to sharing any documents or information with the Purchaser.
For more information on Disclosure To Potential Buyers Of A Property, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (800) 619-3570 today.
CALL NOW FOR A CONSULTATION
Toll Free: (800) 619-3570
New York City: (212) 786-7950
Westchester County: (914) 719-6970