New York's Seller Disclosure Law (RPL § 462): The $500 Escape Hatch Is Gone

For two decades, New York's seller disclosure regime had a famous escape hatch: rather than complete the Property Condition Disclosure Statement required by Real Property Law § 462, a seller could simply credit the buyer $500 at closing and skip the questionnaire. Nearly every seller took the deal. A 2023 amendment ended that practice: for contracts signed on or after March 20, 2024, sellers of one-to-four family residential properties must actually deliver the completed statement, and the form now includes specific flood questions, including whether the property is in a FEMA flood zone and whether it has experienced flood damage.

What the statement covers

The PCDS runs through the property's condition in the seller's actual knowledge: structural matters, water and rot damage, mechanical systems, environmental conditions, and now flood history and flood insurance claims. It is a disclosure of what the seller knows, not a warranty of condition, and it does not substitute for the buyer's own inspection.

Who is outside the statute

The regime covers one-to-four family dwellings. Condominium and cooperative units are outside it, as are vacant land and most estate, foreclosure, and other fiduciary sales. For those transactions, the buyer's protections come from the contract, the inspection, and the common law.

Where the real fights happen: concealment

New York remains a caveat emptor state for what the disclosure regime does not reach, but that doctrine has a hard edge: a seller may not actively conceal a defect. The recurring fact pattern is familiar to any real estate litigator: water damage behind fresh paint, a finished basement marketed as dry, a flood the neighbors remember but the listing forgot. Where the buyer can show affirmative steps to hide the condition, as-is clauses and merger clauses stop being the end of the analysis, and remedies from contract rescission to deposit recovery come into play.

What buyer's counsel should pin down early

The questions that decide these disputes are concrete. When did the damage occur relative to contract signing? What does the delivered PCDS actually say, and is a flood answer false? What did the inspection report note, and was access to the affected area impeded? Were there prior insurance claims or permit applications that show knowledge? The timeline usually matters more than the adjectives.

Casewise now carries the statutes and the appellate case law these disputes turn on: RPL § 462, the General Obligations Law, and Appellate Division decisions on concealment, deposit forfeiture, and specific performance. Its Case Prep workspace takes your facts and argues both sides with verified citations. Five free questions, no sign-up, at casewise.si.