Closings, Courts and Covid
Here we are in the middle of June, COVID numbers statistically are down in New York and New York City has finally entered Phase 1 of the recovery. Walking around the City, you start to feel a buzz; people are anxious and ready to get back to some sense of normalcy.
A few weeks back, I had written about the effects of social distancing and the stay at home order on the closing process. A key and central theme to that discussion was communication and the parties working together to get the deals closed. While that notion still remains true, it’s become obvious this so called ‘new norm’ involving powers of attorney, closing in escrow pending receipt of wires, even having no parties present at the table and closing completely virtually is not completely beneficial to all but has actually in fact complicated the process.
Many I’ve spoken with recently, whether at the closing table or in zoom chats, have expressed frustration at this process. On one side, you have the non-appearing parties expecting the appearing parties to do all of the ‘heavy lifting’ while the non-appearing party is effectively ‘taking advantage’ of the situation. I’ve had numerous closings in past few weeks which took longer than normal or in effect were delayed because one or more parties were not present.
More often than not, with all parties not being present at the closing table, funds are being transferred by bank wire which leads to an entire other set of problems. Each bank has different protocols for sending wires, including but not limited to cut off times and security checks. This leads to closing in ‘escrow’ or a ‘dry closing’ wherein all documents are signed but the closing is not complete until the monies are transferred. In fact, in one recent deal, a wire to a payoff bank was delayed for an extended period of time as a digit was improperly transcribed on the wire request. The additional level of stress created by waiting for wires to hit, which in more cases than not is a result of not having all parties present and being able to tender a check to satisfy the closing obligations, is totally unnecessary.
On a different note, it appears Housing Court is getting ready to ‘open’ on some level in the next few weeks. Court personnel, including judges, court attorneys and clerks, began reporting to the courthouses this week. Several courthouse tours have been scheduled with court personnel and attorneys alike to address future protocols and courthouse procedures.
In the meantime, the Court continues to schedule ‘virtual’ conferences for ‘two-attorney’ unresolved cases in the hopes of lessening the burden on the Court when court reopens with anticipated flood of new court filings.
Directly, intertwined with the opening of Housing Court and the desire/need to commence non-payment proceedings by many Owners are two (2) Senate approved Bill awaiting review and signature by Governor Cuomo. Specifically, there is proposal 8419 which deals with providing rent vouchers to qualifying tenants; and 8192B which permits the issuance of money judgments but not judgments of possession to landlords for tenants affected during the COVID period. As of this date, 8192B still remains with the State Senate while 8419 was given to the Governor for signature on June 5, 2020.
On a daily basis we are having discussions with landlords and tenants advising all of any updates and to keep the lines of communication open.
As summer begins to kick in, a reminder to all: stay cool, stay safe and stay relevant. Have a great week.
