Capital Region Legal News

Sunday, December 11, 2016

What disclosures are required in residential real estate transactions?

Would you move into a house or apartment that was the site of a suicide, homicide or other violent crime? Do you think real estate agents are required to tell you if the home has been involved in some way with a death or violent crime?

These questions came up in a recent article published in the New York Times about New York residential properties and their sometimes troubled past.

When Julia Dahl and Joel Bukiewicz were looking for an apartment to rent in Brooklyn, their real estate agent felt compelled to disclose to them that the prior renter of the apartment they were about to view had committed suicide in the apartment. The couple was a bit uneasy, but ended up renting the place anyway because the price was right and they were in a bit of a bind.

The fact is, residential real estate in New York can be over a century old, and most have likely been the site of at least one death, whether from suicide or homicide. And, while real estate professionals have wrestled with the moral dilemma of whether or not to disclose that someone died in the home, they simply are not obligated by law to disclose such information.

What Disclosures are Required in New York?

In New York State, residential real estate brokers and sellers are required only to disclose material defects in the property. These disclosures are set forth in the Property Condition Disclosure Act of 2002 (the “Act”). The Act discusses 48 questions about residential properties and breaks it down into four categories:

  • General Information – including the building’s age, utility costs, ownership and property possession
  • Environmental Information – including things like leaky pipes, lead paint, asbestos, infestations, presence of radon and other hazardous substances, and proximity to landfills or floodplains
  • Structural Information – including the roof condition and whether there has been damage to the structure by insects, water or fire
  • Mechanical Systems and Services – including water sources, utilities, sewers, flooding and drainage issues

Limitations on Disclosures

The Act does exempt certain residential properties from these disclosure requirements. For example, certain properties that are transferred via probate or a lawsuit such as probate or bankruptcy, properties transferred via a trust or between family members, and newly constructed property that has not been inhabited.

Failure to make certain disclosures can result in the seller owing a $500 credit towards the purchase price at closing. However, paying the fee in lieu of disclosure does not necessarily protect a seller from liability under New York case law.

Interested in Real Estate in New York?

Whether you are considering buying or selling residential real estate in New York, having an experienced real estate attorney on your side can help keep you out of hot water. The attorneys at Ianniello Anderson, P.C. are responsive and respectful when our clients have questions and we are always ready to move fast when a deal needs to be done quickly. Serving clients in the Albany, Clifton Park, Glens Falls, Saratoga Springs, Troy, and the entire Northeastern NY areas at 518.350.7755.

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