New condos face deal-stopping hurdle due to COVID-19

by Meg White

If you’re working with clients looking to buy or sell new construction condos, there may be a snafu lurking in the near future. While the Cook County Recorder of Deeds’ office is able to process most requests digitally, it’s unable to record condominium declarations at all, as long as their office is closed.

“The one place that we still haven’t worked through a solution is the condo declaration and plat area,” James Gleffe, chief deputy recorder for Cook County, told Chicago Agent magazine. “We’re trying to take employee safety into account as much as possible.”

That means that, for new condos or apartments that are being converted to condos, deals may not be able to close because lenders generally won’t OK them if this essential paperwork hasn’t been signed off on by the local recorder’s office. Attorney Adam Wilde, who often works on new-construction real estate transactions in Chicago, noted that this is causing a variety of problems, from parties having to go back to the negotiating table to additional costs being incurred for rate lock extensions and carry costs.

Attorney Adam Wilde

“Files are on hold or people are seeking new lenders that can get it done,” he said. “I’ve had four deals that have been impacted in one way or another.”

The main reasons for this hangup are twofold: First, the plat maps that the office needs in order to record the declarations are quite large, and require special equipment to print and scan. Second, the fee schedule for recording condo declarations varies, and the point-of-sale system the office has set up to handle these transactions isn’t able to process non-standard payments at this time.

Gleffe noted that his office has reached out to several of title companies and the Illinois State Bar Association looking for ideas for how to satisfy this requirement and still keep employees at home, but so far the only fix they’ve been able to come up with is to open up the agency’s downtown office to a limited number of employees so that these non-standard documents can be processed.

“We are finding solutions, and we’re actively working with the industry,” he said, noting that further down the road they may be able to solve the technological problems with some additional computer programming. “I’m not saying it’s never going to be a document that will be eligible for e-recording … it’ll just take some development work to get it there.”

On April 30, the agency’s office released a statement that noted it will likely be closed until May 30, and that it had begun to record documents that had been submitted to the office by mail, FedEx or UPS this week. Gleffe said he hopes to have a safe work environment set up to allow employees to begin recording documents that are unable to be submitted through e-recording in a week or two.

“We’re just assessing the situation, making sure that we’re doing everything we can to make sure essential services are being provided,” Gleffe said. “As it relates to condo declarations and plats, understand that we are working toward a solution.” He also noted that the office is open to suggestions, feedback and input, which can be sent to rod.support@cookcountyil.gov.

So what can brokers do to smooth the process until the recorder’s office has a fix in place? Wilde Law Group recently sent a notice about the situation that offers advice to buyers’ agents whose transactions might be impacted by the hangups at the recorder’s office. Here are their recommendations for those representing buyers of new-construction condos where declarations have not been recorded:

  • Protect your clients against delays and potential defaults by making sure their attorney makes the contract contingent on the declarations being recorded.
  • Ask the attorney to confirm with the title company that it is insuring the gap between now and when the recorder’s office is reopened. The advisory noted that “most title companies are providing detailed letters for lenders on the issue.”
  • Check with your client’s lender to ensure they have a procedure in place for gap coverage. While the company noted that “some lenders are accepting this and still closing,” the alternative may include ensuring the lender’s condo underwriters are aware of the situation and have a solution in place.
  • For those working with lenders who will not accept the gap coverage, buyers’ agents can ask their clients’ attorneys to extend financing, closing dates and negotiating fees for carrying costs, including rate lock extensions.

And what about the other side of the transaction? “If you’re a listing agent for a new condo,” Wilde said, “I would recommend [the developer] have lenders in place that can approve a procedure that would allow for deals to close without the declarations.”

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  • david rudolph says:

    Cook County Recorder of Deeds Edward M. Moody announced yesterday that as of Monday, May 4th, his office will begin to record documents that have been submitted through the mail or by commercial shipping carrier (such as FedEx or UPS). In addition the office will make efforts to start recording documents that are unable to be submitted through e-recording, such as condo declarations and plats.

    The link to the full announcement is:


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