3.1 Property Condition Disclosure Statement
Key Takeaways
- New York requires sellers of 1-4 family residential property to deliver a Property Condition Disclosure Statement (PCDS) before the buyer signs the contract.
- The old $500 opt-out credit was ELIMINATED effective March 20, 2024 (Senate Bill S5400) — sellers can no longer pay $500 in lieu of disclosing.
- The amended PCDS now contains 56 questions, including 7 new flood-risk questions tied to FEMA flood insurance rate maps.
- Disclosure duties survive an 'as is' sale: a seller who actively conceals a known material defect can still be sued for fraud.
- Exempt transfers (estate, foreclosure/REO, court-ordered, between co-owners) do not require a PCDS.
The Property Condition Disclosure Act
New York's Property Condition Disclosure Act (PCDA), found in Real Property Law (RPL) Article 14, requires a seller of residential real property to deliver a completed Property Condition Disclosure Statement (PCDS) to the buyer before the buyer signs a binding contract of sale. The statement is the seller's written representation of known conditions.
Real Estate SalespersonFree exam prep with practice questions & AI tutor
The Biggest 2026 Exam Change: $500 Credit Eliminated
For years New York let a seller skip the PCDS by giving the buyer a $500 credit at closing. Senate Bill S5400 repealed that option effective March 20, 2024. Older prep books still teach the credit — it is now a wrong answer.
| Era | Seller's choice |
|---|---|
| Before 3/20/2024 | Deliver PCDS or give buyer a $500 credit |
| 3/20/2024 onward | Must deliver the PCDS — no $500 opt-out |
The same amendment expanded the form from 48 to 56 questions, adding 7 flood-risk questions keyed to FEMA flood insurance rate maps (100-year and 500-year floodplains, federal flood-insurance requirements, prior FEMA claims, and elevation certificates).
When the PCDS Is Required
| Property Type | PCDS Required? |
|---|---|
| 1-4 family residential (house, condo, co-op share) | YES |
| Commercial / 5+ unit apartment building | NO |
| New construction sold by builder | NO (covered by implied housing-merchant warranty) |
| Vacant land | NO |
Statutory Exemptions
Even for residential property, the PCDA exempts certain transfers:
- Sale by a court-appointed referee, executor, or trustee (estate sales)
- Foreclosure / REO sales by a lender
- Transfers between co-owners or to a spouse/relative
- Transfers by operation of law (bankruptcy, eminent domain)
Worked scenario: A bank sells a foreclosed house. No PCDS is required because lender/REO transfers are exempt — but the listing agent must still disclose any latent defect the agent personally knows about.
What the 56-Question Form Covers
The PCDS groups questions into categories the candidate should recognize on the exam:
| Category | Sample questions on the form |
|---|---|
| General | Age, how long owned, occupancy, boundary disputes |
| Environmental | Asbestos, lead, radon, fuel/chemical storage, pest infestation |
| Structural | Roof, foundation, walls, settling, prior fire/smoke damage |
| Mechanical | Heating, cooling, plumbing, electrical, water heater |
| Water & sewage | Source of water, well, septic vs. municipal sewer |
| Flood (new in 2024) | FEMA flood zone, flood-insurance requirement, prior flood claims, elevation certificate |
The seller answers Yes / No / Unknown / Not Applicable and may attach explanations.
How Liability Works
The PCDS is a disclosure of known conditions — it is not a warranty and the seller need not investigate or hire inspectors. But knowingly false answers create liability.
| Situation | Outcome |
|---|---|
| Seller answers honestly, defect later found | Generally no PCDA liability (no duty to know everything) |
| Seller knowingly gives a false answer | Liable for the buyer's actual damages caused by the false statement |
| Seller actively conceals a defect | Common-law fraud exposure (separate from the PCDA) |
| Information changes before closing | Seller must deliver a revised statement |
'As Is' Sales and Caveat Emptor
New York generally follows caveat emptor (buyer beware) for ordinary defects a buyer could discover by reasonable inspection. An 'as is' clause does not erase the duty: a seller still cannot actively conceal a known material defect, and an honest PCDS is still required for covered residential property.
Trap: Candidates pick 'as is means no disclosure.' Wrong — 'as is' shifts repair responsibility to the buyer but does not license fraud or excuse the PCDS.
Agent Duties
| Duty | Description |
|---|---|
| Explain the PCDS | Help the seller understand the form |
| Ensure timely delivery | Buyer must receive it before signing the contract |
| Disclose own knowledge | Agent must reveal latent defects the agent personally knows |
| No independent inspection | Agent is not required to verify or test conditions |
Buyer Remedies and the Delivery Deadline
The statute is built around one timing rule: the seller must deliver the signed PCDS before the buyer signs the binding contract of sale. If the seller fails to deliver it, the buyer's leverage shifts.
| Buyer right | Detail |
|---|---|
| Receive the PCDS pre-contract | Mandatory delivery before signing |
| Recover actual damages | For a knowingly false answer that causes loss |
| Pursue fraud claims | Separate common-law remedy for active concealment |
| Receive a revised PCDS | If conditions change before closing |
Exam logistics anchor: The New York salesperson exam is 75 multiple-choice questions, administered directly by the Department of State at its own state test sites and scheduled through eAccessNY for a $15 fee; the passing score is 70%. Expect several PCDS and disclosure questions on it.
Putting It Together
Think of the PCDS as a known-conditions snapshot, not a warranty. The seller is liable only for what the seller actually knew and misrepresented, the buyer keeps the duty to inspect, and since March 2024 there is no escape hatch — the form must be delivered. Candidates who memorize 'the seller can pay $500 instead' will miss the most-tested update in this chapter.
Under New York law in 2026, what happens if a seller of a 1-4 family home does not provide the Property Condition Disclosure Statement?
A bank sells a foreclosed (REO) single-family house. What is true about the Property Condition Disclosure Statement?
How many questions does the amended New York PCDS contain after the 2024 update, and what category was added?