Per New York’s Property Condition Disclosure Act (PCDA), sellers of residential real estate must disclose known material defects or other relevant information about the property to the potential buyer. Otherwise, a buyer may follow through on this transaction while being misinformed. In turn, the seller may soon find themselves in significant legal trouble. Without further introduction, please continue reading to learn what happens when there is a failure to disclose in real estate transactions and how an experienced New York City purchase & sale attorney at Zimmet Law Group, P.C. can help you avoid this misstep.
What are typical examples of failures to disclose?
Namely, known material defects are considered any significant issues within the residential real estate property that may affect its value and/or the buyer’s decision to purchase it. Such issues must be truthfully and completely stated within the Property Condition Disclosure Statement (PCDS) form, prepared by the seller for the buyer to review. More specific examples of issues worth mentioning here are as follows:
- Structural defects to the property: cracks in the foundation, persistent leaks in the roof, poor plumbing, faulty electrical wiring, etc.
- Previous damage to the property: a history of flooding, flood damage, or if the property is located in a flood zone, etc.
- Environmental hazards surrounding the property: presence of asbestos, lead-based paint, mold, radon gas, etc.
- Repairs to the property: the history of repairs done to the property and its outstanding maintenance issues, etc.
What happens when a seller fails to disclose in a real estate transaction?
Regardless of whether a buyer intentionally or unintentionally fails to disclose material defects, doing so may lead to serious legal consequences. The buyer may have grounds to take legal action against the seller if they believe they suffered financial harm and other damages due to this misinformation. Specifically, they may sue for fraud if they think the seller participated in an active concealment or had superior knowledge of the material defect(s).
Or, they may sue for negligence if they feel the seller failed to conduct a proper inspection or research of the property before filling out the PCDS form. But with this claim, you may have the chance to argue that the buyer holds a similar duty before following through on the transaction.
Given the circumstances, a best-case scenario may be that the buyer simply backs out of the purchase agreement and asks the seller to return their down payment. But overall, to avoid this failed real estate transaction, it is in your best interest to employ a real estate agent from early on. They may work to ensure you identify and disclose all these issues before it is too late.
If you require further clarification on this issue, a skilled New York City real estate attorney from Zimmet Law Group, P.C. is willing to offer it. So please do not hesitate to seek out our services. We look forward to helping you.
