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.
Important: This section covers New York-specific law. For national disclosure concepts, see our Real Estate Salesperson exam prep.
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 Senate Bill S5400 repealed that option effective March 20, 2024.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?
The buyer automatically receives a $500 credit at closing
There is no remedy because the PCDS is voluntary
The seller has no compliant choice — delivering the PCDS is now mandatory and the old $500 opt-out was repealed in March 2024
The buyer must waive all inspection rights
A bank sells a foreclosed (REO) single-family house. What is true about the Property Condition Disclosure Statement?
The PCDS is required because the home is residential
Only the flood questions must be answered
The bank must provide a $500 credit instead
Foreclosure/REO transfers are statutorily exempt, so no PCDS is required
How many questions does the amended New York PCDS contain after the 2024 update, and what category was added?
48 questions; a new radon category
75 questions; a new title-insurance category
40 questions; a new financing category
56 questions; seven new flood-risk questions tied to FEMA maps
Sections you finish are checked off in the contents.