The impact of COVID-19 is rapidly evolving, and we are receiving an increasing number of closure notices from government offices that may impact closing logistics of financing and acquisition transactions.
Issues to be mindful of
Clients should be mindful that the closure of government offices or shelter-in-place orders could raise various issues in connection with closing logistics, including the following issues:
- The ability to record deeds, mortgages, satisfactions, or other loan or title commitment requirements may be limited;
- The ability of title companies to conduct date-down searches or municipal lien searches may be affected;
- The ability of lenders, borrowers, or buyers to fund transactions remotely may be impacted;
- The ability of surveyors to conduct site visits may be limited; and
- The ability to respond in a timely fashion to zoning inquiries may be affected.
Potential solutions
- Drafting of agreements: If parties are in the process of negotiating or drafting a purchase and sale agreement or letter of intent, we suggest adding certain provisions to protect a buyer’s deposit and ability to conduct due diligence in the event there are delays or closures as a result of COVID-19.