New York real estate transaction rules

Written buyer agency / buyer agreement: when it must be signed and what it must say

State law requires an agency disclosure form. We have not verified whether a statewide written buyer-agreement requirement exists.

• For residential property, agents must give the state agency disclosure form (DOS-1736-F) and get a signed acknowledgment (N.Y. Real Prop. Law § 443).
• We have not found a New York statute in force that requires a written buyer-broker agreement before touring or making an offer. A bill that would require one, A8910 (2025–26 session; same as S9564), was referred to the Assembly Judiciary Committee on July 16, 2025 and again on January 7, 2026. It has not been enacted (checked 2026-10-18).
• Separately, MLS participants are subject to post-2024 NAR settlement practice rules that require written agreements before touring.

Are escalation clauses allowed, and who may draft them?

No escalation-specific rule was found. DOS limits what brokers may write into contracts: they must not add provisions that require legal expertise.

• We found no DOS rule or memorandum that specifically addresses escalation clauses.
• DOS Legal Memorandum LI04 explains that, under Judiciary Law § 478 and the Duncan & Hill case, licensees may fill in the blanks of standard forms but may not insert provisions that require legal expertise. DOS recommends that contracts be made subject to attorney approval and use forms approved by bar association and Realtor committees.
• Whether a given escalation provision crosses that line is a legal question. This site does not answer it. Not verified yet.

Must a licensed attorney handle the closing?

Customary, but no statute requiring an attorney at closing was found. Non-attorneys can't be paid to draft deeds and similar instruments.

• Judiciary Law § 478 bars non-attorneys from practicing law. Section 484 bars non-attorneys from receiving compensation for drawing deeds or other instruments affecting real estate (as summarized in DOS Legal Memorandum LI04).
• DOS advises licensees to make contracts subject to attorney approval and not to charge a separate fee for preparing them.
• We found no New York statute or rule requiring that an attorney conduct the closing itself. Attorney participation is customary, but we have not verified a legal requirement. Not verified yet.

Who holds the deposit and how fast it must be deposited

Brokers who hold deposits must use a separate escrow account and deposit within 3 business days. In many deals, an attorney holds the deposit instead.

• A broker may not commingle money of a principal with the broker's own. Money held for others must go into a separate special bank account (escrow or trust account) in a federally insured institution within three business days of the signing of the contract or of receipt (19 NYCRR 175.1).
• Interest earned on escrow funds can't be applied to the broker's commission without the consent of all parties (19 NYCRR 175.1).
• In many New York deals, an attorney (often the seller's) holds the down payment as escrowee under the contract. That comes from the contract forms, which we couldn't access, and isn't a statewide rule we have verified. Not verified yet.

Can one broker represent both sides, and on what terms?

Allowed only with informed written consent from both parties. Designated sales agents are an option.

• Under RPL § 443 and the DOS disclosure form, dual agency requires the informed written consent of both buyer and seller. A brokerage that represents both sides may, with written consent, assign separate “designated sales agents” to each party. The brokerage itself remains a dual agent.
• DOS warns that consenting to dual agency means giving up the right to the agent's undivided loyalty, and it requires full disclosure before consent (DOS Legal Memorandum LI12).

Key required seller disclosures

A Property Condition Disclosure Statement (PCDS) is required before the buyer signs. The $500 credit opt-out ended Mar. 20, 2024.

• Unless exempt, sellers of residential property must complete and sign the PCDS and deliver it to the buyer or buyer's agent before the buyer signs a binding contract (RPL § 462(1)).
• Since March 20, 2024, sellers can no longer give a $500 credit instead of the PCDS, and the amended form adds flood-related questions.
• Agents must tell sellers (listing agents) and buyers (buyer's agents) about their PCDS rights and obligations in time (RPL § 466). NYSAR advises licensees not to help sellers fill out the form.
• Federal rule: for most housing built before 1978, sellers must give the lead-based paint disclosure.

The standard inspection, due diligence, or option period in the common state form

Not verified yet. There is no single statewide standard form.

• New York has no statewide regulator-promulgated purchase contract, and forms vary by region (for example, bar association forms used downstate and Realtor or bar forms upstate).
• We tried to review a bar-association residential contract form, but the download was blocked, and other versions are paid products. We have not verified a standard inspection or due-diligence period. Not verified yet.

No primary source yet, so this item is marked not verified.