New York Real Estate Salesperson ExaminationProperty Condition and DisclosuresMedium
A buyer is purchasing a newly constructed home in New York. The salesperson presents the buyer with a Property Condition Disclosure Statement (PCDS) that indicates 'unknown' for most items. The buyer is concerned about the lack of specific information. What is the salesperson's most accurate advice regarding the PCDS for new construction?
- AThe seller of a newly constructed home is typically exempt from providing a PCDS, so 'unknown' responses are irrelevant.
- BThe PCDS is primarily for existing residential properties; for new construction, builder's warranties and punch lists are more relevant.
- CThe seller is legally required to fill out the PCDS completely and accurately, so 'unknown' is unacceptable.
- DSellers of new construction often opt to provide a $500 credit to the buyer instead of completing the PCDS.
Show answer & explanationAnswer & explanation
Correct answer: D. Sellers of new construction often opt to provide a $500 credit to the buyer instead of completing the PCDS.
In New York, for residential properties with 1-4 units, sellers generally have the option to provide a completed PCDS or a $500 credit at closing. For new construction, sellers often choose the $500 credit since they may not have lived in the home and thus, would mark many items as 'unknown' or 'not applicable'.
Why the other options are wrong
- A. While not entirely exempt, new construction sellers often opt for the credit, making the PCDS less critical than builder warranties.
- B. The PCDS applies to 1-4 unit residential properties, including new construction, but the option for the credit makes it less central than for existing homes where sellers have lived.
- C. Sellers have the option of providing a credit in lieu of the PCDS, so 'unknown' is not always 'unacceptable' if the credit is chosen.
NY Property Condition Disclosure Statement (PCDS)
A form required in New York for sellers of 1-4 unit residential properties to disclose known defects. Sellers can opt to provide a $500 credit to the buyer instead of completing the form.
- Applies to 1-4 unit residential properties.
- Seller provides known defects.
- Seller can opt for $500 credit instead.
- Agent ensures seller makes the choice.
Memory trick: PCDS in NY: Disclose your flaws, or give $500, no pause!