The Act instructs the seller to complete the form based upon the seller's "actual knowledge" of the property's condition and touches upon such information as how long the seller has owned and occupied property, the structure's age, whether there have been any claims made against the property, and whether there are any features "shared in common with adjoining land owners or a homeowners association, such as walls, fences or driveways." There are also questions regarding environmental and structural conditions, and any mechanical systems and services.
Should a seller fail to provide a PCDS, the purchaser is entitled to a credit of $500 off the purchase price. More importantly, should the document contain information the seller actually knows to be untrue, the seller is liable for the actual damages the purchaser suffers and any other equitable or statutory relief a court deems appropriate. A recent case decided by the Appellate Term, Second Department, reinforces that point.
In Ayres v. Pressman , a purchaser filed a small claims action to recover expenses incurred as a result of real-property transaction that went awry. The defendant had provided a PCDS, which asserted that no features of the property were shared in common with adjoining landowners, and that there was an existing septic system which had no known material defects. It was uncontroverted, however, that the septic system was both materially defective and partially located on a neighbor's property (which was also a violation of local law).
The trial court concluded that the seller had been aware of the septic system's location and defect, and deliberately refused to disclose that information. On appeal, the Appellate Term, Second Department, found no basis to disturb those findings.
As a result, the purchaser was entitled to recover his actual damages, which included the cost of the title search and mortgage application fees.
Ouch!
For a copy of the Appellate Term's decision, please use this link: Ayres v. Pressman