NYC Caveat emptor definition

Whoa...BIG question and probably best left to an attorney but I'll start.
As a basic matter of law going back to the first cave man who bartered a coconut for something, "buyer beware" has been the premise of all sales.

However, laws get passed to protect buyers in various ways over time. In NY State, for example, a "Property Condition Disclosure Statement" must by law be completed and presented to the Buyer of one to four family residential real estate (but excluding coops and condos importantly). Failure to present this Statement however only entitles the Buyer to a $500 credit at closing (I guess to pay for inspection).

Listing brokers are under an obligation to disclose known defects to a Buyer with certain exclusions.

As for what recourse you might have to a Seller who failed to disclose a material defect, might depend on the contract you enter into with the Seller but most contracts are going to provide that you're on your own once title passes. There are, naturally, certain presale conditions for which a Seller will be liable by law after closing despite the contract contents.....Environmental contamination is one where it is very hard to completely pass off a problem to the Buyer if the Seller was responsible and hid his knowledge.

Bottom line....this is what lawyers get paid for....and why it's called "due" diligence.