What Real Estate Practitioners Should Know About Properties Located in Agricultural Districts

In 1971 the New York State Legislature enacted Article 25-AA of the Agricultural Markets Law.

The law provided for the creation of agricultural districts throughout the State of New York.

In a report published by the New York State Comptroller’s Office, as of January 1, 2019 there were 174 agricultural districts in the state comprising 25,673 farms. In Nassau and Suffolk Counties there were 592 farms and 69 wineries totaling 31,000 farmland acres located mostly in Suffolk County.

Article 9, Section 333-c of New York’s Real Property Law imposes certain disclosure obligations with respect to the transfer of real property located in agricultural districts. It states, in part: “When any purchase and sales contract is presented for the sale, purchase, or exchange of real property located partially or wholly within an agricultural district established pursuant to the provisions of article 25-AA of the Agricultural Markets Law, the prospective grantor shall deliver to the prospective grantee a notice which states the following: It is the policy of this state and this community to conserve, protect and encourage the development and improvement of agricultural land for the production of food, and other products, and also for its natural and ecological value. This notice is to inform prospective residents that the property they are about to acquire lies partially or wholly within an agricultural district, and farming activities occur within the district. Such farming activities may include, but not be limited to, activities that cause noise, dust, and odors. Such disclosure notice shall be signed by the prospective grantor and grantee prior to the sale, purchase or exchange of such real property. Failure of the seller to provide such information to the buyer shall not prevent the recording officer from filing such deed.”

This section of the Real Property Law is silent on the responsibilities of any real estate agents that may be involved in these transactions, but does the Department of State (DOS) impose any obligations with respect to disclosure of properties located wholly or partially within agricultural districts?

Department of State regulations indicate: “New York Real Property Law 443 imposes the following obligation in dealing with the buyer, a seller’s agent should (a) exercise reasonable skill and care in performance of the agent’s duties; (b) deal honestly, fairly and in good faith; and (c) disclose all facts known to the agent materially affecting the value or desirability of property, except as otherwise provided by law.”

The DOS goes on to say: “Consistent with the above, knowing if the property is in an agricultural district affects the desirability of property and the broker/agent should make such disclosure. Accordingly, an agent representing the interests of the seller, in such a district, must disclose the same to a prospective buyer pursuant to the New York Real Property Law.”

It should be noted that the DOS has the authority to impose fines and other penalties including suspension, revocation of licensees, and denial of commissions if found to be in violation of Section 443 of New York Real Property Law.