Bulletin February 3, 2003

 

1. Carbon Monoxide Detectors - Chapter 257 of the Laws of 2002, adding subdivision 5-A to Section 378 of the Executive Law, provides that every one-or-two family dwelling, including condominium and cooperative units, constructed or offered for sale after November 28, 2002 is required to have an operable carbon monoxide detector. Under Chapter 257, standards for the design, manufacture and installation of carbon monoxide detectors are to be established by the State Fire Prevention and Building Code Council. New York’s Department of State has taken the position that “the legal requirement to install a carbon monoxide detector will become effective only after final adoption of the new regulation by the Code Council”. It is anticipated that the Council will adopt a regulation in March, which would become effective in July, 90 days after notice of its adoption is published.

2. Property Condition Disclosure Act - An action was commenced by the buyers of residential property in Staten Island claiming that they closed their purchase in reliance on a Disclosure Statement that inaccurately reported the condition of a swimming pool and deck. The Disclosure Statement, required by the Property Condition Disclosure Act (Real Property Law Section 462), effective March 1, 2002, applies to the sale of real property improved by a one-to-four family dwelling used or occupied, or intended to be used or occupied, in whole or in part, as the home or residence of one or more persons. The Civil Court, Richmond County, dismissed the case on the grounds that no cause of action is created by the Act; the only remedy is to provide for a credit of $500 at closing if the seller does not provide a Disclosure Statement. There is no remedy under the Act if it is established that a seller does not disclose facts about which it has actual knowledge. The Court further held that any information contained in the Disclosure Statement merges into the contract of sale and into the deed at closing. Since the plaintiffs were unable to prove that the defendants had either actual or constructive knowledge of the property defects, they had also had no remedy at common law. Malach v. Chuang was reported in the New York Law Journal on January 10, 2003.

3. Uniform Commercial Code - The New York City Register’s offices will no longer accept termination statements for financing statements filed against collateral other than fixtures and cooperative interests. It is the Register’s position that the period under Revised Article 9 during which a non real estate-related financing statement could be transitioned by a further filing to the Department of State expired July 1, 2002. UCC Section 9-703 provides that a security interest perfected under former Article 9 remains effective only if it is perfected under revised Article 9 within one year of July 1, 2001 the effective date of Revised Article 9.