Following the issuance of Governor Pritzker’s March 20, 2020, “Stay at Home” Executive Order (“Order”) [include link here to Order No. 2020-10], individuals and companies with real estate closings in the pipeline suddenly, and quite justifiably, panicked: “Does this mean we can’t close our deal?” For now, the answer is yes, you can still close your deal, with precautions, good planning and an abundance of patience.
Title companies continue to remain open and are closing commercial and residential purchase and sale transactions and refinances, for the time being. Pursuant to Sections 12(f) and (r) of the Order, title companies and title services are considered “essential businesses” that are allowed to continue operating during this crisis. Despite what Shakespeare once declared (“The first thing we do, let’s kill all the lawyers”), attorneys are also deemed “essential,” so we are here to help.
Of course, being open does not mean “business as usual.” In order to maintain recommended social distance, many title companies are doing the following:
- offering cash transactions almost entirely electronically, using email and DocuSign (for now, Illinois still requires original, “wet” signatures on deeds and mortgages)
- encouraging “curb-side” closings where, if scheduled ahead of time, processors will email documents to buyers and counsel ahead of time, a notary will deliver the documents to the buyer’s home (taking all necessary, recommended CDC precautions) and will wait in the car for the buyer to complete signing. SFNR has participated in several of these “curb-side” closings and, using the wonderful world of technology, will video chat with the buyer to review documents for accuracy and explanation.
- encouraging the seller and buyer/borrower to obtain Powers of Attorney (for residential closings) and authorizing resolutions (for commercial closings) from their respective attorneys to limit the number of people at the closing table. SFNR recommends that you do this at least a week ahead of time to avoid any last-minute, unnecessary drama.
- consistent with existing practice, many closings are being conducted by overnight courier services. SFNR emails or overnights documents to the client for signature. Overnight courier services will pick up the return package by appointment. Our SFNR team will receive the package, scan all contents to the title company, with the original documents delivered by overnight courier to the title company. Additionally, transaction documents are scanned to the opposing counsel, and all loan documents are scanned to the lender. Above all, this process requires organization and pre-planning.
- wherever possible, using electronically submitted and signed documents (for the time being, Illinois still does not allow DocuSign for deeds or mortgages; a “wet” signature is required), but once delivered to the title company, “e-filing” is still utilized, even when the Recorder’s Office is closed.
A common concern is that City and County offices continue to announce closures due to the pandemic on a daily basis. Among those offices that are closed is the Cook County Recorder of Deeds. In addition, many local municipal offices are closed, making it difficult, if not impossible, to obtain transfer stamps. Once again, with adversity comes ingenuity: most title companies are allowing closings to proceed with measures similar to those typically used when documents or releases are not obtained in time for closing: title indemnifications and Gap coverage (insuring the time period between delivery and recording of the deed or mortgage) signed by the parties in order to allow transactions to close. Moreover, the State of Illinois, while late to the dance, is finally in the process of allowing “video notarization.” Governor Pritzker’s Executive Order 2020-14 provides the modernized processes and procedures by video conferencing for remote signing and notarization of documents, previously requiring in person acknowledgement of documents.
All of these measures cannot replace the one, tried and tested axiom of real estate closings: Be prepared…plan well ahead of time! Now more than ever, parties and counsel will need to have all “I’s dotted and T’s crossed” well in advance of a closing. SFNR recommends as best practices planning to have closing documents (when available) reviewed, revised, signed and ready to go at least a week ahead of the closing. As Benjamin Franklin so aptly penned, “Failing to plan is planning to fail!”
For more information, please feel free to contact Michael Friman or call (312) 648-2300.