It’s been just over 2 weeks since the federal government declared COVID-19 a national emergency. Since then the title industry has demonstrated its incredible resourcefulness by pulling together solutions to keep real estate transactions going.
Among these solutions were the varied approaches to tackling county recording office closures. In many states the law requires that documents must be recorded with the office within 3 days of signing. However, under shelter-in-place orders in various states and the federal government’s early guidance for business closures during the COVID-19 health threat, many county recording offices shut their doors or modified their operations.
This reality is beginning to shift after recent news. On Saturday March 28, the US Department of Homeland Security’s Cybersecurity & Infrastructure Security Agency (CISA) updated its guidance on “essential businesses” during the COVID-19 health threat. Included in these updates are “government offices who perform title search, notary, and recording services in support of mortgage and real estate services and transactions.”
“Many governors and mayors are referring to the Homeland Security list as their own list for essential services,” Elizabeth Blosser, ALTA Senior Director of Government Affairs, said on a webinar on Monday, March 30, 2020.
Navigating solutions as county recording offices reopen
While many county recording offices are likely to reopen after Saturday’s federal announcement, time-sensitive recordings are still currently at risk in many counties as offices make the necessary adjustments to reopen their doors. The health and safety of county recorders is high-priority, and offices will need to consider necessary precautions to keep their employees safe before reopening their doors.
In counties where recording is at risk due to county closures, some underwriters have issued workarounds in the form of COVID-19 indemnifications and affidavits to gap insurance. These modifications enable closings to continue and transactions to be funded with some restrictions.
Meanwhile, while some underwriters have issued contingencies, not all lenders are on board. Many lenders have announced that they will not accept gap coverage exceptions moving forward because of the liability it puts on their businesses.
How to move forward if your county recording office is closed
While the differences between lender and underwriter policies and guidance may feel paralyzing, there are a number of steps title & escrow businesses can take to keep transactions moving forward:
- Stay up-to-date on county recording office closures with ALTA’s county recording status webpage found here.
- Advocate for the reopening of county recording offices. ALTA encourages all industry participants to reach out to their local government offices to encourage the reopening of county recording offices under the federal government’s new guidance.
- Discuss options with your lenders and underwriters to determine how you can proceed with different transaction types. For some transactions, your lender and underwriter may have mutual terms.
- Understand your county recorder’s modified options. Some recording offices are offering alternative ways to record documents. For example, in Illinois, some counties are allowing in-person recording of documents by appointment only.
- Know your remote online notarization (RON) options. While county recording office doors are closed, e-recording is still a possibility for offices that accept e-recorded documents and where RON is legal. Currently, 23 states have passed RON legislation and 12 states have fully implemented laws. A number of states are also issuing emergency legislation to enable RON in light of COVID-19.
For more information on the industry’s response to COVID-19 and to find up-to-date information on closures, advisories, and legislation, visit our COVID-19 resource page here.