New York home sellers now must disclose information about flood risk, flood history and flood insurance to potential buyers under legislation recently signed by Gov. Kathy Hochul, further amending the requirements of the Property Condition Disclosure Statement (“PCDS”).
Under the prior version of the PCDS, a seller could “opt out” of executing and delivering a PCDS, and instead provide a credit to buyer of $500. The new legislation eliminates the “opt out” credit to the buyer but does not establish a penalty for the seller’s failure to disclose and is silent on the seller’s liability for failure to disclose.
The new law also establishes a flood risk “right to know” for homebuyers.
The new law, which takes effect in 180 days, will require the following questions be answered on the Property Condition Disclosure Statement:
- Is any or all of the property located in a Federal Emergency Management Agency (FEMA) designated floodplain?
- Is any or all of the property located wholly or partially in the special flood hazard area (“SFHA”; “100-year floodplain”) according to the Federal Emergency Management Agency’s (FEMA’s) current flood insurance rate maps for your area?
- Is any or all of the property located wholly or partially in a moderate risk flood hazard area (“500-year floodplain”) according to FEMA’s current flood insurance rate maps for your area?
- Is the property subject to any requirement under federal law to obtain and maintain flood insurance on the property?
- Have you ever received assistance, or are you aware of any previous owners receiving assistance, from the Federal Emergency Management Agency (FEMA), the U.S. Small Business Administration (SBA), or any other federal disaster flood assistance for flood damage to the property?
- Is there flood insurance on the property?
- Is there a FEMA elevation certificate available for the property.
- Have you ever filed a claim for flood damage to the property with any insurance provider, including the national flood insurance program (NFIP)?
It is also interesting to note that the legislation fails to include the recently added “mold disclosure” which was added to the PCDS on June 14, 2023.
View the revised legislation.
Harris Beach’s Real Estate attorneys are tracking this issue and related matters. Should you have questions, please reach out to attorney Melanie C. Marotto at (716) 200-5230 and mmarotto@harrisbeachmurtha.com, or to the Harris Beach attorney with whom you most frequently work.
This alert does not purport to be a substitute for advice of counsel on specific matters.
Harris Beach has offices throughout New York State, including Albany, Buffalo, Ithaca, Long Island, New York City, Rochester, Saratoga Springs, Syracuse and White Plains, as well as New Haven, Connecticut, Washington, D.C. and Newark, New Jersey.
