Adam Leitman Bailey, P.C. Finds Creative Ways to Close Real Estate Transactions During COVID-19
Adam Leitman Bailey, P.C. recently closed two real estate transactions simultaneously for properties located over 100 miles apart by utilizing new closing procedures authorized by Governor Andrew Cuomo to fight the novel COVID-19 virus which facilitate “virtual” and “mail” real estate closings. The closings for both properties, which have an aggregate value of approximately $2,000,000.00, were seamless despite ongoing challenges that the New York real estate industry is facing caused by restrictions on non-essential, in-person gatherings.
The first property, a lake house located in Rock Hill, NY, went into contract on March 10, 2020, only a few days before the United States began to understand the imminent crisis caused by the COVID-19 pandemic. The transaction faced numerous roadblocks that required creative lawyering by attorneys at Adam Leitman Bailey, P.C. Specifically, because the buyers were unable to inspect the air-conditioning system at the premises due to restrictions on travel, Adam Leitman Bailey, P.C. negotiated a post-closing agreement whereby funds were held in escrow pending buyer’s confirmation that the air-conditioning system is in working order within 60 days of closing.
The second property, a multi-family property located in Upper Manhattan that went into contract in January 2020, required Adam Leitman Bailey, P.C. to negotiate and memorialize a $50,000.00 purchase price reduction on behalf of their client-buyers because the pandemic lowered the fair-market-value of the subject premises prior to closing.
Both transactions were made possible by Executive Order 202.7 which was signed on March 7, 2020, by Governor Andrew Cuomo. The Executive Order permits virtual notarization to help facilitate, among other things, real estate closings to be conducted virtually and by mail. The Executive Order permits notaries to utilize audio-video technology provided that the following conditions are met:
The person seeking the Notary’s services, if not personally known to the Notary, must present valid photo ID to the Notary during the video conference, not merely transmit it prior to or after;
The video conference must allow for direct interaction between the person and the Notary (e.g. no pre-recorded videos of the person signing);
The person must affirmatively represent that he or she is physically situated in the State of New York;
The person must transmit by fax or electronic means a legible copy of the signed document directly to the Notary on the same date it was signed;
The Notary may notarize the transmitted copy of the document and transmit the same back to the person; and
The Notary may repeat the notarization of the original signed document as of the date of execution provided the Notary receives such original signed document together with the electronically notarized copy within thirty days after the date of execution.
Andrew C. Jorges, Esq., of the Transactional Department at Adam Leitman Bailey, P.C. handled both transactions. The firm looks forward to developing creative new ways to keep real estate transactions moving forward while adhering to social distancing measures implemented by state and local government officials.