With the anticipation of continued disruptions due to the coronavirus (COVID-19), we have important information to pass along to all our agents doing business in New Hampshire and Maine.
WHAT YOU NEED TO KNOW:
While most registries are open at this time, we anticipate things will soon change. CATIC is issuing the following underwriting guidelines in order to assist agents in closing their clients’ real estate transactions:
To address the challenges caused by registry closings, CATIC is committed to insuring any gap created by the
inability to record due to a registry closing. In most cases, normal underwriting guidelines continue to apply.
In order to address the inability to timely record the documents vesting title to the Insured or perfecting the lien of the Insured Mortgage caused by the closure of any Registry of Deeds as a result of the pandemic (COVID-19), CATIC will authorize the issuance of Loan and Owner’s Policies insuring any gap created by the inability to record provided that:
- The Registry of Deeds for the County where the property is located is closed (i.e., the Registry is not accepting documents for recording AND/OR is not able to index documents accepted for recording). NOTE: The Registry of Deeds is not closed if the Registry is accepting documents via electronic recordings;
- The title examination or Agent inquiries do not disclose a recent history of disputes or economic distress, evidenced by, for example, a recording of involuntary liens (e.g., Attachments, Executions, Federal or State Tax Liens, Lis Pendens, Notice of Bankruptcy, Notice of Foreclosure, Tax Taking, Multiple Mortgages);
- Agent will run the title from the date of the Commitment through the date of the closing of the Registry of Deeds to ensure that there are no new matters of record in order to close the gap as much as possible;
- In order to best protect our Agents and the Company, it is recommended, but not required to have the Owner execute the attached Gap Indemnity;
- The Date of Policy to be issued shall be the date and time of disbursement of the funds;
- The Agent shall promptly record all of the documents listed in the Requirements of the Commitment promptly upon re-opening of the Registry of Deeds; and
- In the event that the title rundown conducted prior to the recording discloses any adverse matters that affect the insured interest, the Agent must promptly notify the Company of such matters.
CATIC will continue to monitor the situation and may send out revisions to these guidelines as circumstances warrant.
As this is a rapidly changing situation, other Registries may soon follow suit. Agents are encouraged to continually monitor the situation to confirm whether or not each Registry has altered its practices and protocols.
CONTRACT PROVISION AUTHORIZING AN EXTENSION
Given the uncertainty caused by increasing reports of quarantines, closures, and other efforts to mitigate the effects of the coronavirus (COVID-19), it is also recommended that attorneys consider adding language to their real estate contracts that will address a situation where any party is under quarantine, prevented from travelling or meeting, or otherwise cannot perform.
CATIC recommends that Agents add language to real estate contracts that would allow for an automatic extension of closing in the event of a quarantine or some other delay caused by, or as a reaction to, the coronavirus. Below is sample language that is already being utilized in contracts in Massachusetts. This language is intended to be only a starting point for our agents, as it is the attorneys and the clients they represent who must decide what will best protect their interests in their transactions.
“The Time for Performance may be extended by either Party by written notice for an Excused Delay which materially affects the Party’s ability to close or obtain financing. As used herein an Excused Delay means a delay caused by an Act of God, declared state of emergency or public health emergency, pandemic (specifically including COVID-19), government mandated quarantine, war, acts of terrorism, and/or order of government or civil or military authorities. Notwithstanding anything to the contrary contained in this Agreement, if the Time for Performance is extended, and if BUYER’S mortgage commitment or rate lock would expire prior to the expiration of said extension, then such extension shall continue, at BUYER’S option, only until the date of expiration of BUYER’S mortgage commitment or rate lock. BUYER may elect, at its sole option, to obtain an extension of its mortgage commitment or rate lock. Notwithstanding the foregoing, said Extension shall not exceed [insert number of days].”
CATIC will remain vigilant and may send out revisions to these guidelines as circumstances warrant.
Our commitment to our agents and industry partners remains strong, and we are available to you at any time by using the direct numbers listed below:
Judy Parys, New Hampshire State Counsel
Bill Walsh, Maine State Manager/Counsel
Greg Lestage, Maine State Counsel
Patricia Sawicki, Agency Service Representative
Joanne McAllister, Inside Agency Advisor
Judith Braun, NNE Regional Manager
We have also rescheduled our upcoming agent seminar that was scheduled for April 15 to June 4, 2020.