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May 29, 2020

Just a short time ago, prior to the COVID-19 outbreak, the antiquated nature of New York real estate closings was still something the real estate community just learned to accept. Each closing typically required in-person attendance to review, sign and notarize piles of paperwork in exchange for certified bank checks, original ownership documents and keys before the happy photos, congratulations, and handshakes and hugs all around.

When COVID-19 struck, all of us were forced to confront our normal social and professional customs and practices. Then Executive Order 202 closed all non-essential businesses, and we began to retreat to our physically distant home-now-work stations. This was an unprecedented occurrence which caused shock waves throughout the real estate community. First, we faced the obvious challenge: what did it mean for clients currently preparing for closings? There would be other challenges to follow, such as how new and existing contracts could be modified to account for practical and legal implications of a global pandemic. But first came the challenge of conducting closings. Thus, the nebulous concept of a “Remote Closing” was born.

Please note: Some attorneys will argue that a remote closing is mandatory, that it is the obligation to all parties in the contract to take whatever steps are necessary to effectuate a closing, no matter what level of inconvenience this might impose on some or all parties. Other attorneys will argue that there is nothing in the contract that obligates any party to close during a pandemic such as COVID-19. In fact, many attorneys will be in the position of arguing the former when representing a client who is eager to close and the latter when representing a client who is reluctant to close. As lawyers, it is our primary obligation to serve as a zealous advocate for our client’s individual needs in most instances.

The purpose of this article is not to make the arguments in favor, or against, the idea of a remote closing in the New York City area. This article focuses on the practical considerations involved in concluding a real estate transaction during the COVID-19 pandemic. Lawyers are often accused of “creating problems” in a transaction. What COVID-19 has shown, however, is that lawyers as a group are exceedingly good at solving problems.

The first thing to note is that there is no established definition of a “remote closing.” Most people have the image in their head of all parties signing into a group video conference, exchanging documents by electronic means, and concluding the closing from remote locations. If only it were that simple. There is presently no legal framework in NYC that would permit such a closing method. There are, however, many creative ways that practitioners can work together to conduct a closing under the unusual circumstances we currently face. If all parties are interested in working together to achieve the conclusion of the real estate transaction, these techniques might help in achieving that shared goal.


Of course, any discussion of legal rights and remedies should start with the specific contract at issue. As set forth above, this article assumes that the parties wish to work together to conclude the closing for whatever the reason. However, just because the parties wish to work together to close does not mean that all the other provisions of the contract have been abandoned. There are numerous contractual issues that need to be worked through in order to conclude a closing, including: signature and notarization of documents, walkthroughs and punch list inspections, exchange of documents, exchange of money, exchange of keys and possession.


Original signatures and in-person notarizations are still needed on many closing documents. Powers of attorney, transfer tax documents, many bank documents, and other closing documents often require notarizations. The recent “remote” notarization law, while temporarily allowed in New York, is not accepted by most banks and many title company underwriters. This means the parties may still be required to meet with a notary in-person in many circumstances, and not all clients are comfortable with this. Attorneys may go over the safety procedures being put in place (e.g., the notary to watch them sign from the curb a “safe” distance away) to let a client know their options.

PRACTICAL TIPS: Even if the parties are comfortable with the signature and notary requirements, care should be taken to think through even the most mundane aspects of this procedure. Who is printing what documents? Do they have a working printer? Do they have enough paper, and the right size paper? Where do the original documents get delivered? By hand or by mail? Is someone scanning the documents? If so, do they have a working scanner or do they need to download a scanning application onto their smartphone?


Confirming the property condition may be more difficult if access and walkthroughs are being prohibited. Access and walkthroughs are an incredibly important aspect of the transaction because the New York buyer may have only one chance prior to closing to raise any issue with their seller. After closing, absent an explicit provision in the contract to the contrary that expressly survives closing, the buyer may be responsible for any defective condition, such as nonworking outlets, nonworking appliances, leaks, and any potentially new damage caused while the parties were in contract.

In the case of new construction purchases from a developer, the contract most likely states that the buyer and the seller must both sign an Inspection Statement that explicitly outlines all punch list items that exist on the date of the inspection.

Due to COVID-19, brokers may be self-quarantined, buildings may have restricted access, and buyers may not feel comfortable going in person. If a closing is to occur during these times, a plan must be made to adequately address these issues.

PRACTICAL TIPS: The parties should discuss the option of virtual walkthroughs, where someone on the seller’s side may go through the premises turning on lights and showing everything working. If that is not acceptable to the buyer, then a plan for walkthroughs should include attention to social distancing rules, access, keys, etc..


During this phase of the remote closing, consideration must be given to where the original documents will be mailed and where the funds will be wired. In transactions involving houses, townhouses, and condominium units, a title company will typically be willing to serve as the “settlement agent” where all documents are sent in advance. In cooperative purchases, there will be additional challenges, such as whether the cooperative closing agent will be conducting the closing or whether they will require one of the attorneys to do so. In any case, all wire transfers should be verbally confirmed directly with the party requesting the transfer. This is always important, but especially so during remote closings when the number and frequency of wires is drastically increased.

PRACTICAL TIPS: In the pre-COVID-19 days, the occasional missed document could be executed at the closing table. Not so these days. Therefore, the most important consideration to make during the COVID-19 days is to how to get the documents to the title company with as much advance notice as possible so that any late requests can be addressed prior to the “remote closing” day. Provide broker commission invoices, management company invoices, title bills, wire requests and wire instructions in advance. In addition, make sure all parties are very clear how the keys will be transferred after closing.

Note: If the building does not allow move-ins but the parties still wish to close, a post-possession agreement may allow the parties to sidestep the current moving and walkthrough concerns, but can also create new risks for buyers.


If you have followed the tips above, you should be able to successfully conclude a closing in New York during the COVID-19 pandemic without risk of health or safety or errors in the execution of documents or exchange of occupancy of the property.

We recommend that the parties map out the closing process on paper, showing each person involved in the transaction, where they need to be and what they need to do. List each document to be signed, and how it will get to the person signing, how it will get notarized, and how it will be delivered to the settlement agent. Show how the money gets from the purchaser to the seller, and how the keys get from the seller to the purchaser. When you are finished, your charts should look something like a Superbowl playbook, with arrows and diagrams, and cross-outs, and action items circled for emphasis. It should be multicolored, and when finished, it should be used as abstract art to decorate your work space.

The lesson learned from the above is this: with the cooperation of everyone involved, we can still get to those celebratory photos, and congratulations. We can still have happy buyers and happy sellers. For now, at least, the elbow bumps, hugs, and pats on the back for a job well done will have to be virtual.