ALBANY-Realtors in New York State suffered a major legislative setback when Governor George Pataki announced that he had vetoed the long sought after Sellers’ Property Conditions Disclosure Bill. Realtors have been trying for a number of years to get a disclosure bill passed into law and had seen the measure receive the unanimous approval of both the State Assembly and Senate earlier this year.

Governor Pataki in his veto message said that the proposal, which would have required sellers to fill out a Property Condition Disclosure Statement prior to the acceptance of a contract of sale, has a number of flaws. “The proponents of the bill contend that New York would remain a ‘caveat emptor’ state because sellers would, as under contract law, not be liable for defects that buyers could have discovered by the exercise of ordinary due diligence,” he contends. “If this would be that case, however, the bill should expressly so provide.”

“In any event, the bill would, at the very least, expose sellers to claims of fraud–and the attendant costs of litigation–that cannot be brought under current law,” he continues. “I have not been persuaded that such a significant expansion of the liability of sellers is warranted.”

Among his other criticisms of the measure, the governor related that the proposal failed to provide any remedy in the case when a seller did not fill out a Property Conditions Disclosure Bill. “Accordingly, prudent and well-counseled sellers, especially given the potentially enormous consequences stemming from completion of a PCDS, might well determine that the sounder course is to refuse to complete a PCDS.” Pataki said that he has directed his staff to work with the bill sponsors and interested parties “to correct the technical defects and ambiguities” in the bill.

Officials with the New York State Association of Realtors expressed disappointment concerning Pataki’s veto of the measure. “Real Estate professionals and lawmakers have spent nearly a decade developing a uniform property disclosure program to benefit the state’s consumers,” says NYSAR President George K. Wonica. “We will not allow this veto to stop the momentum that was built this year.”

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