Real estate efficiency hacks during COVID-19
Friday, May 22, 2020 @ 10:41 AM | By Sarita Samaroo
In the world before COVID-19, real estate lawyers acted as fraud fighters and gatekeepers for the bank, verifying clients’ identify and asking questions in person at every turn to ensure we satisfy our requirements and enable smooth transactions. Since mid-March, we have adjusted our mode of practice, working remotely and witnessing signatures via videoconferencing, a phenomenon very foreign to most of us. The “normal” interaction with clients is lost and the fear of not obtaining all the information and verifying client identification properly has increased.
Following are some tips I have learned to help me improve efficiency in the world of COVID-19:
1) Be more prepared. As banks have reduced their hours, clients now often have to stand in long lineups to obtain their closing proceeds. As real estate lawyers, we have an obligation to ensure clients receive their documents in a timely manner –– via courier for hard copy or by way of a scanned set that can be signed and e-mailed back to the lawyer. I recommend sending clients the documents at least three business days prior to closing.
2) Communicate regularly with support staff. While some staff may enjoy the comforts of working from home, it is easy to become distracted. Create daily lists and reminders for staff to ensure they are on top of files and do not miss requisition dates or important deadlines.
3) Provide clear instruction to clients. It is also important to advise clients of the exact amount of closing funds to bring to your office so they’re aren’t scrambling at the 11th hour. You should ensure you have mortgage instructions at least three to five days before the closing date and be sure to verify your client’s identity via a videoconference call.
4) Be mindful of physical distancing. Be aware that not all clients have a printer and scanner at home, so you may have to meet with them in person. To keep everyone safe and reduce the spread of virus transmission, ask clients to wear masks and gloves when they come in to sign, and use their own pens.
5) Manage expectations. These days, clients are often financially stressed and need their solicitor to reassure them that their transaction has closed smoothly or that their debts have been paid off in full. Again, the longer-than-usual lineups at banking institutions cause time delays and possibly more per diem charges on clients’ debts or mortgages. It is crucial to keep them apprised and to encourage their patience as we work on deals. For buyers who are purchasing residential properties with the intention of renovating and subsequently selling, it’s important to make them and their realtors aware that as of April 1, 2020, municipalities no longer issued permits for residential renovations.
6) Investigate options for streamlining financial transactions. Typically, lawyers and law clerks visit banks in person to certify cheques and deliver closing proceeds, which is challenging in the current environment. That process can be streamlined by setting up an online wire transfer with limits that enable you to send large amounts and conduct purchase transactions. Our firm has had great success with this option, and I anticipate it will become a standard practice going forward. One caveat: lawyers may need to convince their banking institutions that they should have access to this program based on their volume of business.
7) Demand more from financial institutions. Banks should be encouraged to implement processes that better serve the needs of real estate lawyers, including a dedicated portal where lawyers can request payout statements of mortgages, as well as allow wire transfer of funds for the payout of these mortgages. There have only been a few banks that have arranged for mortgage payouts via wire transfer since COVID-19 began. In matters involving consolidation of client debt in refinancing or mortgage to payouts, it would be more efficient if banks provided solicitors with the balances on credit cards as well as account numbers, as well as, allow real estate lawyers to pay out these debts at one banking institution and not require lawyers to go to different banks to pay out, for example, unsecured lines of credit, which typically has to be paid out at the banking institution where the line of credit was opened.
Until the global pandemic ends, it will be challenging to navigate real estate transactions. The best we can hope for is to improve efficiency in as many areas as possible, both with our clients and the financial institutions that serve them.
Sarita Samaroo is the principal lawyer and owner of SST Law Professional Corporation, which focuses on real estate law. Fluent in Spanish and French, she is frequently called on to share her expertise at industry events for home buyers.
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