Silence, statements, and concealment
New York has traditionally followed caveat emptor in real estate, which means a seller's mere silence about a defect is generally not treated as fraud. The picture can change when the seller or someone acting for the seller makes an affirmative false statement or actively hides a problem, such as painting over water damage. Sellers of most one-to-four family homes must give buyers a property condition disclosure statement, and that statute was amended recently, so which version applied depends on when the contract was signed. Statements by brokers, inspectors, and appraisers raise their own questions about who is responsible.
What the contract may have already decided
Many purchase contracts say the buyer is taking the property as is and has not relied on statements outside the contract. Courts in New York often enforce those clauses, particularly when they address the specific subject of the alleged misrepresentation. A claim may also fail if the problem was something an inspection or a reasonable inquiry would have revealed. Commercial buyers are generally expected to investigate more than homebuyers. This is why the contract, the disclosure statement, and the inspection report usually get read before anything else.
Building the record
Gather the listing, the disclosure statement, the contract, the inspection report, and any messages in which the seller or broker described the property's condition or income. Photographs of the problem, repair estimates, and records showing when the problem started can help establish what the seller likely knew. Keep any repair invoices and keep damaged materials if a contractor replaces them, since they may be evidence. Our first look focuses on which statements were made and by whom, whether the contract limits the claim, and whether a demand, a negotiated credit, or a lawsuit fits the size of the loss.
