New York Real Estate Salesperson ExaminationNew York State Specific Laws and RegulationsMedium
A real estate broker is preparing to list a single-family home for sale. The seller informs the broker that the basement occasionally floods during heavy rain, but they have always managed it with a sump pump. Under New York's Property Condition Disclosure Act (PCDA), what is the broker's primary responsibility regarding this information?
- AAdvise the seller to disclose the flooding issue on the Property Condition Disclosure Statement.
- BInstruct the seller to repair the issue before listing the property.
- CDisclose the information to potential buyers verbally, but not in writing.
- DKeep the information confidential, as it could negatively impact the sale price.
Show answer & explanationAnswer & explanation
Correct answer: A. Advise the seller to disclose the flooding issue on the Property Condition Disclosure Statement.
Under the PCDA, sellers are primarily responsible for disclosing known defects. A broker's duty is to advise their client (the seller) to comply with disclosure laws, ensuring the seller completes the Property Condition Disclosure Statement truthfully.
Why the other options are wrong
- B. While repairing an issue might be advisable, it is not the broker's primary responsibility under the PCDA; disclosure is the immediate legal requirement.
- C. Verbal disclosure is insufficient under the PCDA, which requires a specific written statement from the seller.
- D. Withholding known material defects is unethical and potentially illegal, violating the broker's duty to fair dealing and the PCDA's intent.
Property Condition Disclosure Act (PCDA)
A New York State law requiring sellers of residential real property to complete and provide a Property Condition Disclosure Statement to buyers, revealing known defects, or provide a $500 credit at closing.
- Applies to 1-4 family residential properties.
- Seller's primary responsibility to disclose.
- Licensees must advise clients on compliance.
Memory trick: Seller's secret, broker's advice, disclosure's price.