New York's property condition disclosure statement: a seller's guide

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Kooky

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A house sale in New York State carries a piece of paperwork that sits apart from the contract, the inspection report and the title search: the property condition disclosure statement. It is a form set out word for word in the state's Real Property Law, filled in by the seller, and handed to the buyer before the buyer commits. Before the change, a seller who failed to deliver it owed the buyer a fixed credit. That credit was struck out of the statute by a bill signed in September 2023, and the same bill enlarged the part of the form that deals with flooding.

This guide walks through Article 14 of the Real Property Law, the part of New York's statutes known as the Property Condition Disclosure Act, as it is published on the New York State Senate's legislation pages. It covers which sales fall under the article, when the statement has to reach the buyer, what the form asks, what happened to the US$500 credit, the fourteen exemptions, the seller's liability and what the article expects of a real estate agent. It is a description of the general rule, not advice on a given sale: how the article applies to one property depends on the facts and on the contract.

Counts taken from sections 462 and 463 of New York's Real Property Law as published by the New York State Senate.

Seven sections, one form

The article index published by the New York State Senate lists seven sections in Article 14. Section 460 gives the short title. Section 461 holds the definitions. Section 462 creates the duty and contains the form itself. Section 463 lists the exemptions, section 464 deals with revising a statement already given, section 465 is headed "Liability" and section 466 is headed "Duty of an agent".

There used to be an eighth. The 2023 bill that changed the article, Senate bill S5400, amended sections 462 and 465 and repealed section 467, according to the Senate's bill page. The Senate's legislation site now returns no entry for that number. What section 467 said before its repeal was not read for this guide and is left aside.

The article is about what the seller knows. Section 461 defines "knowledge" as only actual knowledge of a defect or condition on the part of the seller, so the form records what one person is aware of on the day of signing.

Which sales the article covers

The duty in section 462 falls on a seller of "residential real property" under a "real estate purchase contract". Both phrases are defined in section 461, and both are narrower and wider than they first sound.

Residential real property means real property improved by a one to four family dwelling that is used or occupied, or intended to be used or occupied, as a home or residence. Three things are carved out of the definition: unimproved land, condominium units and cooperative apartments, and property in a homeowners' association that is not owned in fee simple by the seller.

A real estate purchase contract, for its part, is more than the standard contract of sale. Section 461 lists four kinds of agreement:

1. a contract for the purchase and sale or exchange of residential real property;
2. a lease with an option to purchase residential real property;
3. a lease-with-obligation-to-purchase agreement for residential real property;
4. an installment land sale contract for residential real property.

So a rent-to-own arrangement on a house is inside the article. The definition of "transfer of title" follows the same logic: it means delivery of a properly executed instrument conveying title, and it also covers delivery of a purchase contract that is a lease or an installment land sale contract. In those arrangements the moment that counts as transfer can arrive long before a deed changes hands.

When the statement must be delivered

Section 462 sets the timing in one sentence. The seller completes and signs the statement and delivers it, or a copy, to the buyer or the buyer's agent before the buyer signs a binding contract of sale.

"Binding contract of sale" is again a defined term. Under section 461 it is a real estate purchase contract or offer that would, once accepted and signed by the seller and once any contingencies are satisfied, require the buyer to accept a transfer of title. The test is therefore the buyer's signature on the document that will bind, not the closing and not the listing date. A statement that arrives at the closing table arrives after the point the statute names.

The section then says what happens to the paper. A copy of the statement carrying the signatures of both the seller and the buyer is attached to the real estate purchase contract. The form ends with two signature blocks for that purpose. In the first, the seller certifies that the information is true and complete to the seller's actual knowledge as of the date of signing. In the second, the buyer acknowledges receiving a copy and understanding that it is a statement of what the seller knows, not a warranty and not a substitute for inspections.

What the form asks

The form opens with a notice and a set of instructions before the first question. The notice tells both parties that the document is a statement of conditions and information known to the seller, that it is not a warranty of any kind by the seller or by an agent representing the seller, and that it is not a substitute for inspections or tests. The buyer is encouraged to obtain independent professional inspections and environmental tests and to check the public records for the property.

The instructions to the seller are short. Answer every question on the basis of actual knowledge. Attach additional pages, signed, where an answer needs explaining. Complete the form yourself. Where a question does not apply to the property, tick "NA"; where the answer is not known, tick "Unkn".

The questions run from 1 to 56 in six groups. The fifth, questions 40 to 55, is a checklist of sixteen systems and parts of the building, each with the same question: is there a known material defect?

The general questions are as much about title and use as about the building. They ask how long the seller has owned and occupied the property and how old the structure is, with a note urging buyers to look into lead-based paint where it was built before 1978. They ask whether anyone other than the seller has a lease, an easement or another right to use the property that is not in the public record, whether anyone else claims to own part of it, and whether anyone has denied the seller access or brought a formal legal challenge to title. They go on to shared features, to surcharges, special assessments and association fees, and to certificates of occupancy.

The mechanical group is where a buyer learns how the house is supplied. It asks about the water source and metering, and whether water quality or flow has been tested. For sewage it asks the type of system and, for a septic system, its age and pumping. It asks about the electric service. Two closing questions concern water again: flooding, drainage or grading problems that leave standing water, and water penetration or damage from seepage or a natural flood event.

The flood questions

Eight questions in the environmental group, numbers 10 to 17, deal with flood risk. The Senate's page for bill S5400 lists them among the questions the bill added or revised, together with question 39 on water penetration from seepage or a natural flood event and question 27 on testing for indoor mould.

The first three questions place the property on the federal flood maps. Question 10 asks whether any part of the property lies in a floodplain designated by the Federal Emergency Management Agency. Question 11 asks whether any part lies in the special flood hazard area, which the form glosses as the "100-year floodplain". Question 12 asks the same of the moderate risk area, the "500-year floodplain".

The next five turn to insurance and history:

• Question 13 asks whether the property is subject to any requirement under federal law to carry flood insurance. The form adds an explanation: homes in high-risk zones with federally backed mortgages are required to have it, the agency encourages flood insurance in every zone, and standard homeowner's policies usually do not cover flood damage.
• Question 14 asks whether the seller or any previous owner has received assistance for flood damage from the Federal Emergency Management Agency, the Small Business Administration or another federal disaster programme. The form warns that for properties that have received such assistance, the requirement to carry flood insurance passes to future owners.
• Question 15 asks whether there is flood insurance on the property, and asks the seller to attach a copy of the policy if there is.
• Question 16 asks whether a federal elevation certificate is available. The form explains that the certificate is prepared by a licensed surveyor or engineer and that a buyer may be able to use it when arranging insurance.
• Question 17 asks whether a claim for flood damage has ever been filed with any insurer, including the National Flood Insurance Program.

One point on dates. A copy of the Department of State's version of the form, numbered DOS-1614-f and marked as revised in June 2023, already asked at question 10 whether any part of the property was in a designated floodplain. The 2023 bill therefore built on an existing question rather than raising flooding for the first time, which is consistent with the bill page's wording of questions "added or revised".

The end of the US$500 credit

Before the change, section 465 opened with a fixed remedy. In the words of the Senate's bill page, the old first subdivision gave the buyer a credit of five hundred dollars where the seller failed to deliver the statement. The June 2023 copy of the Department of State form describes how it worked: if the seller did not deliver the statement before the buyer signed a binding contract of sale, the buyer received a US$500 credit against the agreed purchase price at the transfer of title.

Bill S5400 struck that subdivision. In its place, section 465 now begins with a statement that nothing in the article limits any existing legal cause of action or remedy at law, in statute or in equity. The current text of the section on the Senate's legislation pages contains no dollar amount at all.

The bill had a companion, A1967, in the Assembly. The sponsor's memorandum, as summarised on the Senate's bill page, described the credit as negligible. The Senate passed the bill by 42 votes to 21 on 9 June 2023. It was delivered to the governor on 19 September 2023, signed on 22 September 2023 and became Chapter 484 of the Laws of 2023.

The bill took effect on the 180th day after it became law. Counting from the signing date, that calculation gives 20 March 2024: eight days left in September, 31 in October, 30 in November, 31 in December, 31 in January and 29 in February 2024 make 160, and the remaining 20 fall in March. The Senate's legislation pages show a revision of section 465 dated 29 March 2024, with earlier versions dated 29 September 2023 and 22 September 2014.

Sales that are exempt

Section 463 lists fourteen kinds of transfer of residential real property for which no statement is required. The table below sorts them into six groups for reading; the grouping is this guide's, not the statute's.

The 2023 bill did not touch this section. The Senate's bill page lists only sections 462, 465 and 467 as affected, and the published version of section 463 still carries its 2014 date.

Keeping the statement accurate until closing

Weeks or months can pass between contract and closing, and a house does not stand still. Section 464 deals with that gap. If a seller acquires knowledge that makes a statement already provided to the buyer materially inaccurate, the seller must deliver a revised statement to the buyer as soon as practicable.

The duty has an end point. No revised statement is required after the transfer of title from seller to buyer or after the buyer takes occupancy, whichever comes first.

A worked example shows the mechanics. Assume a contract signed on 3 March, a closing set for 15 May, and no early occupancy by the buyer. On 10 April a spring storm puts water in the basement of a house whose seller had truthfully answered "no" to the questions on standing water and water penetration. The seller now knows something that makes those answers materially inaccurate, title has not passed and the buyer has not moved in, so section 464 calls for a revised statement as soon as practicable. Change one assumption, with the storm on 20 May, five days after closing, and the section no longer requires anything of the former owner. The dates and the storm are illustrative only.

What the article does not spell out is what the buyer may do on receiving a revised statement. That is a matter for the contract and for the general law, which section 465 expressly leaves in place.

What the seller is liable for

Section 465, in its current form, has two subdivisions, and they point in different directions.

The first, the text that replaced the credit, preserves everything outside the article: nothing in it limits any existing legal cause of action or remedy at law, in statute or in equity. The second sets the measure of liability under the article itself. A seller who provides a statement, or who provides or fails to provide a revised statement, is liable only for a willful failure to perform the requirements of the article. For such a willful failure the seller is liable for the actual damages suffered by the buyer, in addition to any other existing equitable or statutory remedy.

The notice at the head of the form puts the same point in plain terms for the person holding the pen: a knowingly false or incomplete statement by the seller may subject the seller to claims by the buyer before or after the transfer of title. A closing does not draw a line under the statement.

Section 462 also keeps one freedom for the parties. Nothing in the article prevents them from entering into agreements of any kind about the physical condition of the property, including an agreement for a sale "as is". The statement and an as-is clause therefore do different jobs. The first records what the seller knows; the second allocates the risk of condition between the parties. How the two interact in a dispute is a question for the courts on the facts of each case, and the article does not answer it.

The form asks a seller for knowledge, not for a guarantee, and it is the willful gap between the two that the statute attaches damages to.

What the article expects of an agent

Section 461 defines an agent as a person licensed as a real estate broker or salesperson under section 440-a of the Real Property Law, acting in a fiduciary capacity. Section 466 then gives that person a duty to inform, and it runs in both directions of the transaction.

An agent representing a seller as a listing broker has the duty to timely inform each seller represented of the seller's obligations under the article. An agent representing a buyer has the duty to inform the buyer of the buyer's rights and obligations under it. Where the buyer has no agent, the duty to inform the buyer falls on the agent who represents the seller and is dealing with the prospective buyer. In each case the buyer must be informed timely and, in any event, before signing a binding contract of sale, the same moment by which the statement itself has to be delivered.

The duty is to explain, not to fill in. The form instructs the seller to complete it personally, and its opening notice says that the statement is not a warranty by any agent representing the seller. Section 466 closes with a protection that matches: an agent who performs the duties the section sets out has no further duties under the article and is not liable to any party for a violation of the article. That sentence is limited to Article 14. It does not speak to an agent's obligations under other law.

Points the statute leaves open

Several questions a reader may bring to the article are not answered by the pages read for this guide, and they are better named than guessed at.

The published sections do not say what the later revisions of section 462 changed. The Senate's legislation pages show versions dated 29 March 2024, 4 October 2024 and 4 July 2025, after earlier ones in 2022 and 2023, and the question list described here is the one in the latest version. Anyone working from a printed form should compare its questions with the current section.

The effective date of 20 March 2024 given above is a calculation from the bill's 180-day clause and its signing date, not a date printed on the Senate's bill page. The bill page lists no chapter amendment.

The article does not set a penalty for a seller who delivers no statement at all in a sale that is not exempt. Section 465 speaks of a willful failure to perform the requirements of the article and of actual damages, and preserves other remedies; how a court measures the loss caused by a missing statement depends on the case.

Finally, the article covers only what it defines. Condominium and cooperative sales, vacant land and new homes never lived in are outside it. Section 465 leaves every other existing cause of action and remedy in place, so the statement sits alongside the rest of the law and does not replace it.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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