For example, parties may consider adding force majeure provisions and certain conditions to closings, such as:

• Provisions that due diligence periods are deemed extended for the period of such delay or closure;
• Financing contingencies;
• Conditions that banking systems and institutions located where the client is located and where the applicable property is located are operating as normal and are able to transfer, send, receive, and confirm funds in an ordinary course and time frame; and
• Requirements that the title company will (1) be committed to deliver a title policy at closing subject only to the exceptions approved by the buyer, and (2) have the ability to (a) complete a date-down search prior to the closing, and (b) cause the deed and any satisfactions of required cure liens to be recorded (and obtain confirmation of same) within a reasonable time after the closing.

• E-recording: Certain title companies have noted that if a recorder’s office is closed to the public but retains the ability to accept and record documents electronically, the title company will be able to perform closings and issue title policies so long as the ability to properly search title continues.
• Gap indemnity: Certain title companies are considering accepting gap indemnities or stand-alone indemnities to address the potential delay in recording required deliverables (for example, satisfactions, deeds, mortgages, etc.) in order to issue title policies, so long as the ability to properly search title continues.
• Reed Smith office resources: Reed Smith’s offices are currently maintaining office resources that can be useful to mitigate the burden on clients working remotely.

For example, Reed Smith offices can print documents or signature pages for clients to review and sign and can also include return overnight mail envelopes to facilitate with delivery.

Next steps and monitoring resources

• We suggest that parties increase the frequency of communications with third-party providers (for instance, title companies, surveyors, zoning consultants, etc.) to confirm that the providers are not experiencing delays as a result of government closures or shelter-in-place orders, given that the status of closures is changing on a daily basis.
• It will be important for clients to be mindful of any delays as soon as possible in the event contract or loan requirements cannot be timely met.
• There are several online resources that continue to be updated to reflect closures of recording offices:
  • CSC has made this resource available: erecording.com/disruptions-due-to-covid-19.
  • Certain municipalities are also updating their websites to reflect specific closures.

Client Alert 2020-156