Farmingdale, Long Island – New homebuyers in Long Island now have a better chance of avoiding the unfortunate surprises that befell Ryan Schneider. After purchasing a house in 2017, Schneider discovered undisclosed flooding issues that forced him to relocate and shell out $90,000 in repair costs after a major storm last September. To address such concerns, a newly amended state law, passed last year and taking effect now, aims to provide greater disclosure about preexisting conditions of houses on the market. However, some believe that further measures may still be necessary.
The 2001 Property Condition Disclosure Act already required sellers to disclose past flooding and other problems to potential buyers. The recent changes to the law now mandate sellers to be more transparent about preexisting, serious conditions that could lead to post-purchase regrets like those faced by Schneider. In today’s competitive housing market, where diligence is crucial, buyers typically rely on inspections by engineers and reviews of title and maps by attorneys. Nonetheless, buyers can still be vulnerable, as unforeseen defects in a seemingly well-intentioned purchase can evolve into a financial nightmare.
Under the amended state law, sellers must now respond to 56 questions about their property, including inquiries about fire and flood damage history, as well as defects in electrical, heating, or plumbing systems. Although some property owners may find these requirements burdensome, real estate agents argued that the previous form was too vague. In fact, sellers and their attorneys previously could offer a $500 credit to buyers who skipped the disclosure review entirely. The amended law is designed to enhance accountability in what is often the largest financial transaction of many people’s lives.
These changes to property disclosure requirements come at a time when the residential real estate industry is already grappling with significant shifts in agent compensation practices. The recent settlement of claims against the National Association of Realtors alleging unfair fee fixing is expected to reduce costs for buyers. However, the full implications of these new rules remain uncertain, further complicating the process of buying and selling homes on Long Island.
With sellers now required to complete the updated disclosure form, buyers will be better equipped to take legal action if previously undisclosed or intentionally hidden issues emerge. However, concerns have been raised regarding the enforceability of this law, with agents and attorneys questioning its effectiveness. State legislators, along with Governor Kathy Hochul, who approved the changes last year, should closely monitor the implementation and impact of the amended law.
By addressing the need for improved transparency in real estate transactions, the amended state law attempts to safeguard homebuyers from potential pitfalls. However, its effectiveness and enforceability remain uncertain. As Long Island continues to navigate a challenging housing market, it is vital for both sellers and buyers to stay informed about their rights and responsibilities. Only with increased awareness and robust enforcement measures can the risks associated with undisclosed property conditions be minimized.