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Yes, even though New York is a caveat emptor (Latin for buyer beware) state vs a disclosure state, and even though sellers typically opt to credit $500 to buyers at closing vs filling out a property condition disclosure form, disclosure is still required if there is a material latent defect.
Just want is a material latent defect?
A defect is "material" if it will have a significant impact on the buyer, and it's something that a reasonable buyer would want to know. A defect is "latent" if it is not readily observable. A perfect example of a material latent defect is a leaky basement that only leaks when it rains. The fact that the basement leaks is a material fact. However, because it only leaks when it rains, it is not readily or easily observable by the buyer. As a result, a leaky basement that only leaks during heavy rain is something that is required to be disclosed even in New York.
The Glazer Case
This is an interesting case where the buyer sued both the listing agnet and the seller for not disclosing that a convicted child molester lived across the street. This undisclosed fact was ruled to be material, but the courts decided that it was not latent. Why? Because the buyer could have easily found out about the child molester by searching on the internet. There are lots of registries for this sort of thing!
The Ghost Case
The buyer sued the seller because the seller didn't disclose that the house had been stigmatized by the seller as a haunted house. While the court doesn't exactly believe in ghosts, the seller did in fact stigmatize the property because the seller ran haunted house tours. The Court of Appeals in NY (the highest court in the state) ruled that it was in fact material because the house had been stigmatized, and also latent because there wasn't much press on the haunted house tours the seller had been running, and thus it wasn't readily observable to the buyer to find out about this.
Homicides and Communicable Diseases
Whether there has been a homicide in the property, or if someone with a communicable disease lived in the property is not considered a material latent defect in New York. This carve-out was enacted due to the AIDS crisis in the 1980's when it wasn't readily apparent yet to the general public how the disease was transmitted. Apparently, a lot of people were refusing to buy homes where people previously lived who had AIDS.
Keep in mind all of this is only in regards to what you must proactively disclose to the buyer. It's a different story if the buyer asks you directly whether someone had died in the apartment. When asked directly a question like that, you should not lie and should tell the truth of course.
Here's an egregious example we've heard. A Chinese buyer had a wife who was superstitious and didn't want to live in a home where someone had died. The listing agent was extremely nefarious and outright lied to the buyer, saying that the seller is in Florida. However, the buyer's broker and attorney looked at the death certificate which showed that the seller had already died, and that the place of death per the death certificate was the apartment! Amazingly, the listing agent continued the charade and tried to explain to the buyer that the seller had moved to Florida and then died there, despite what the death certificate stated. Truly incredible...
P.S. If you do have a material latent defect, you're supposed to "announce" it to the buyer, even though the law doesn't disclose the form of how you do so. Obviously this should be done in writing, and better still to have it announced in the contract itself.
Just want is a material latent defect?
A defect is "material" if it will have a significant impact on the buyer, and it's something that a reasonable buyer would want to know. A defect is "latent" if it is not readily observable. A perfect example of a material latent defect is a leaky basement that only leaks when it rains. The fact that the basement leaks is a material fact. However, because it only leaks when it rains, it is not readily or easily observable by the buyer. As a result, a leaky basement that only leaks during heavy rain is something that is required to be disclosed even in New York.
The Glazer Case
This is an interesting case where the buyer sued both the listing agnet and the seller for not disclosing that a convicted child molester lived across the street. This undisclosed fact was ruled to be material, but the courts decided that it was not latent. Why? Because the buyer could have easily found out about the child molester by searching on the internet. There are lots of registries for this sort of thing!
The Ghost Case
The buyer sued the seller because the seller didn't disclose that the house had been stigmatized by the seller as a haunted house. While the court doesn't exactly believe in ghosts, the seller did in fact stigmatize the property because the seller ran haunted house tours. The Court of Appeals in NY (the highest court in the state) ruled that it was in fact material because the house had been stigmatized, and also latent because there wasn't much press on the haunted house tours the seller had been running, and thus it wasn't readily observable to the buyer to find out about this.
Homicides and Communicable Diseases
Whether there has been a homicide in the property, or if someone with a communicable disease lived in the property is not considered a material latent defect in New York. This carve-out was enacted due to the AIDS crisis in the 1980's when it wasn't readily apparent yet to the general public how the disease was transmitted. Apparently, a lot of people were refusing to buy homes where people previously lived who had AIDS.
Keep in mind all of this is only in regards to what you must proactively disclose to the buyer. It's a different story if the buyer asks you directly whether someone had died in the apartment. When asked directly a question like that, you should not lie and should tell the truth of course.
Here's an egregious example we've heard. A Chinese buyer had a wife who was superstitious and didn't want to live in a home where someone had died. The listing agent was extremely nefarious and outright lied to the buyer, saying that the seller is in Florida. However, the buyer's broker and attorney looked at the death certificate which showed that the seller had already died, and that the place of death per the death certificate was the apartment! Amazingly, the listing agent continued the charade and tried to explain to the buyer that the seller had moved to Florida and then died there, despite what the death certificate stated. Truly incredible...
P.S. If you do have a material latent defect, you're supposed to "announce" it to the buyer, even though the law doesn't disclose the form of how you do so. Obviously this should be done in writing, and better still to have it announced in the contract itself.