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BLOG / 09.28.20 /

Socially Distanced Closings

The COVID-19 pandemic has greatly impacted the closing process in the real estate industry. Many offices that used to host typical real estate closings now prohibit or discourage in-person closings, and closing participants are reluctant to spend extended periods in conference rooms that can seem cramped and unventilated. The Covid-19 pandemic has forced the NY real estate industry to adapt and incorporate new procedures and methods to achieve social distancing to address its longstanding in-person, “wet” signature closing process.

Major changes to the pre-Covid-19 closing process have impacted preclosing preparations. Normally, once a closing date is confirmed, financial closing adjustments are made and title is cleared. However, due to the pandemic, in addition to the above, attorneys now need to plan the pre-signing of documents by their clients, draft escrow agreements and confirm the wiring of funds to the correct accounts.

Seller’s counsel, no matter the type of transaction, can have their client pre-sign closing documents, or counsel can act as Power of Attorney. When title companies are involved they can acts as escrow agent to accept and hold documents and checks until all requirements are met. Some title companies are even willing to send their title “closer” to the multiple offices to pick up pre-signed closing documents for recording, further streamlining the process. These pre-closing steps reduce the number of people needed to attend the closing and have the welcomed (but unintended) effect of saving time during the closing. Overall, these adaptations by the real estate industry have also led to a more efficient and streamlined closing process for both attorneys and their clients.

One lingering obstacle for closings with purchaser financing, however, is that most lenders still require in-person execution of loan documents by buyers/borrowers, with “wet” signatures on loan documents made in the presence of a notary public. The otherwise streamlined closing process is further slowed when lenders will not accept remote notarization in spite of the governor’s Executive Orders that specifically permit a remote notary.


Cooperative apartment closings have been affected most by the coronavirus especially when the transaction includes new financing and the payoff of an existing loan. Due to office closures and related restrictions, the limitation of the number of people allowed in an office and the limited use of title companies in these types of transactions the closing process has been adapted to pre-signing documents when available and the use of escrow agents. The transfer agent along with lender’s counsel (if applicable) must be able to coordinate the execution of all documents to ensure a successful closing. If there is a mortgage payoff, the payoff attorney, seller’s attorney and transfer agent must coordinate the delivery of the existing lender’s collateral (i.e., the seller’s co-op stock and proprietary lease) as well as the wire of the payoff to the lender. This must all be done even if a traditional sit-down closing will not be taking place. Most payoff attorneys have entrusted the designated escrow agent to hold the collateral in escrow until the payoff amount is transmitted and received. Wiring the payoff and any other amount due at closing has in our experience proved to be a safe and effective way to make sure all parties are paid on the day of closing.

Recently, as social distancing restrictions have loosened and Covid-19 cases have decreased in the metropolitan area, traditional in-person closings are taking place more often. However, the ability of the real estate closing industry to adapt during the recent “shutdown” has ensured that remote and/or reduced attendance closings will still take place if another shutdown occurs.

For more information contact:

Michael Coppa