[WSBARP] New wrinkle on closings
Kary Krismer
Krismer at comcast.net
Wed Nov 4 07:57:55 PST 2020
Possession is defined as on-closing in the vast majority of residential
transactions, so it would affect possession on most transactions. The
very purpose of these amendments is to allow possession on schedule,
although in a multiple closing transaction it could also be to allow
funds for the second closing.
And allowing possession pre or post-closing is now rather risky with the
Covid issues.
The first time I came across this issue was about three years ago on a
closing which should have been the Friday before the 4th of July. The
title company offered to treat it as closed. Neither the buyer nor
seller wanted that--the buyer wasn't planning on moving into the
property until the next week and representing the buyer I didn't want
the risk of a fire from fireworks with an insurance company denying
coverage.
Kary L. Krismer
206 723-2148
On 11/3/2020 5:22 PM, David Daniel wrote:
> Possession would not be affected. It would be delivered as per the
> contract, either upon closing or at some other specified time. This
> addendum solely changes the contractual point of closing from being
> the time of recording to the time of submission for recording
> (assuming the other conditions are met, i.e. the funds are made
> available to Seller).
>
> Oh, and as to the point raised earlier regarding lender consent,
> nothing there would be changed either. Lender consent would (as
> always) be required for the parties to close, and the lender would
> have a copy of this addendum together with the contract before
> approving the release of the funds.
>
> Appreciating the feedback and thoughts! Thank you.
>
> *
> *
>
> *David C. Daniel*, Attorney
>
> _^____________________________________ _
> * DEMCO LAW FIRM, P.S.*
> _^____________________________________
> _*Office |* (206) 203-6000
> *Email |* _ddaniel at demcolaw.com <mailto:ddaniel at demcolaw.com>_
>
> 5224 Wilson Ave. S., Suite 200
>
> Seattle, WA 98118
>
>
>
> On Tue, Nov 3, 2020 at 5:09 PM Tom Ashton <Tashton at tomashtonlaw.com
> <mailto:Tashton at tomashtonlaw.com>> wrote:
>
> Possession?
>
> Get Outlook for Android <https://aka.ms/ghei36>
>
> ------------------------------------------------------------------------
> *From:* wsbarp-bounces at lists.wsbarppt.com
> <mailto:wsbarp-bounces at lists.wsbarppt.com>
> <wsbarp-bounces at lists.wsbarppt.com
> <mailto:wsbarp-bounces at lists.wsbarppt.com>> on behalf of David
> Daniel <ddaniel at demcolaw.com <mailto:ddaniel at demcolaw.com>>
> *Sent:* Tuesday, November 3, 2020 4:39:59 PM
> *To:* WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com
> <mailto:wsbarp at lists.wsbarppt.com>>
> *Subject:* Re: [WSBARP] New wrinkle on closings
> This addendum language came out of our office. It came about in
> response to a recent notice from King County (a number of weeks
> back) that recordings may be delayed by several days or more. We
> had word that other counties were experiencing similar issues as
> well. Given our understanding that title and casualty insurers are
> generally willing to insure the gap period, we came up with this
> addendum to address the concern of the parties becoming out of
> contract if the transaction did not "close" on time.
>
> I appreciate the thoughtful commentary offered by Craig and Kary.
> Here would be my thoughts in response:
>
> What if the county rejects the recording and requires one of the
> parties to re-sign something and that party now refuses?
> I don't think either party would have a basis to refuse, and both
> parties would be bound by the duty of good faith and fair dealing
> to complete the act of recording. As between Buyer and Seller, the
> transaction would be closed as of the "Submission Date" (which is
> defined earlier in form to be the date on which the closing docs
> are submitted to the county for recording, regardless of whether
> they are actually recorded that day). As such the parties would
> not be out of contract or free to walk away, but rather would be
> closed as between the two of them, but with the surviving
> need/obligation to record the documents, which essentially would
> be a ministerial act at that point, but not one which either party
> would be entitled to avoid. I suppose if the seller just
> disappeared then a court could be petitioned for an order to
> complete the recording.
>
> I am concerned about an insurable interest in the event of a
> casualty.
> The Buyer would have an insurable interest due to the change in
> definition of "closing", and as paragraph 3 says, both parties
> should ensure that they have adequate coverage from the point of
> closing to the point of recording.
>
> I believe (but do not know for sure) that NWMLS will be addressing
> this issue in an upcoming round of forms revisions.
>
> *
> *
>
> *David C. Daniel*, Attorney
>
> _^____________________________________ _
> * DEMCO LAW FIRM, P.S.*
> _^____________________________________
> _*Office |* (206) 203-6000
> *Email |* _ddaniel at demcolaw.com <mailto:ddaniel at demcolaw.com>_
>
> 5224 Wilson Ave. S., Suite 200
>
> Seattle, WA 98118
>
>
>
> On Tue, Nov 3, 2020 at 3:13 PM Kary Krismer <Krismer at comcast.net
> <mailto:Krismer at comcast.net>> wrote:
>
> The state-wide forms people are apparently working on this
> issue and apparently finding a number of different issues
> necessary to resolve. So caution is probably indicated.
>
> I've heard they've discounted the casualty insurance issue,
> which I consider to be the major issue. I think paragraph 3
> should probably provide that both parties should maintain
> insurance until recorded if you're willing to take the risk on
> that issue. But with that paragraph 1 language changing the
> definition of closing seemingly the buyer would have an
> insurable interest, unlike the standard state-wide forms.
>
> I'd not have thought too much about the county rejecting
> documents prepared by a professional escrow in a normal
> purchase-sale transaction. Has anyone seen that? There is
> typically limited power of attorney language to correct
> mistakes as part of the escrow instructions, so maybe that
> would deal with it where the document didn't need to be
> completely redrawn. But what about a valuation issue holding
> things up?
>
> Kary L. Krismer
> 206 723-2148
>
> On 11/3/2020 3:02 PM, Craig Gourley wrote:
>>
>> Listmates, I just received an addendum on a Purchase and
>> Sale we are closing and it has my antenna’s up.
>>
>> I have seen gap insurance in limited cases when something
>> unusual happens and title will insure as of a specific date
>> even though a deed has not recorded but it is typically with
>> the consent of the lender. Given the propensity of the County
>> recording office to play Jr lawyer and reject recordings for
>> any number of stupid reasons I am reluctant to follow this
>> addendum. What if the county rejects the recording and
>> requires one of the parties to re-sign something and that
>> party now refuses? I am concerned about an insurable
>> interest in the event of a casualty. I am sure given a
>> minute I can come up with additional participants in the
>> potential parade of horrors. Thoughts? Comments? Am I being
>> overly concerned about nothing? The addendum is below.
>>
>> *Gourley Law Group*
>>
>> *Snohomish Escrow*
>>
>> *The Exchange Connection*
>>
>> **
>>
>> 1002 10^th Street / PO Box 1091
>>
>> Snohomish, WA 98291
>>
>> 360.568.5065
>>
>> 360.568.8092 fax
>>
>> _Craig at glgmail.com <mailto:Craig at glgmail.com>_
>>
>> **
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