Guidance for Real Estate Closings During COVID-19 Crisis

The following recommendations represent a compilation of suggestions from Vermont industry leaders to address issues related to the COVID-19 virus in the context of real estate transactions.  Practitioners should assess the application of these suggestions to their practices.  There may be other recommendations issued by the Centers for Disease Control, the VT Department of Health and other federal and state agencies.

PLEASE NOTE: The dangers related to the spread of COVID-19 are changing. PLEASE adjust your protocols as needed.

Presently, the recommendations coming from experts in public health suggest the best process for minimizing transmission of the COVID-19 virus is by minimizing social contacts. With that in mind, you should strive to reduce the number of persons in contact at any one time.

  1. To the extent possible and when allowed by the lender, every transaction that is suitable for closing via powers of attorney (POA) should be by POA.Preferably, each party’s respective attorney would be named as agent, which would limit the number of persons present at closing. POAs should include delegation language so the agent can delegate authority to another person to sign documents in connection with the transaction if needed.
  2. When there is a sale and purchase transaction, seller(s) should be encouraged to pre-sign transfer documents with their attorney. Pre-signed documents can be delivered to the settlement agent and held in escrow pending completion of the transaction. Even in the case of pre-signed seller documents, it’s recommended that seller(s) execute a POA to enable their attorney to sign any other documents that may arise in connection with the transaction.
  3. Non-signing parties and any person exhibiting respiratory ailments should not attend closings. To the extent people are required to meet to complete a closing, the smallest number of people should be in the same room at the same time. People should maintain at least six feet (6’) distance from each other during the closing.Realtors and attorneys should discuss disposition of the earnest money deposit for each transaction well in advance of closing so the check can be delivered to the settlement agent for proper disbursement prior to closing.REMEMBER: This is an opportune time for scammers and fraudsters. Be sure to: slow down and think (twice) before undertaking any action concerning the transfer of money. Your clients are likely more susceptible to fraud than ever before. Have a verbal discussion with all clients about your office’s wire procedures and specifically alert them about scam emails. Consider wire transfer of any kind as a last resort and instruct all clients to be EXTRA vigilant if they are asked to initiate a wire.