Governor Pataki in his veto message said that the proposal,which would have required sellers to fill out a Property ConditionDisclosure Statement prior to the acceptance of a contract of sale,has a number of flaws. "The proponents of the bill contend that NewYork would remain a 'caveat emptor' state because sellers would, asunder contract law, not be liable for defects that buyers couldhave discovered by the exercise of ordinary due diligence," hecontends. "If this would be that case, however, the bill shouldexpressly so provide."

"In any event, the bill would, at the very least, expose sellersto claims of fraud--and the attendant costs of litigation--thatcannot be brought under current law," he continues. "I have notbeen persuaded that such a significant expansion of the liabilityof sellers is warranted."

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