At Hutchens Law Firm, one of the most frequent questions asked by the Buyer at closing table is “Do I get the keys now?” My answer usually depends on the agents involved and if the keys have been given directly to my office.
If the Seller delivers the keys to me as the closing attorney, I am required to hold them in trust until the Deed is recorded at the Register of Deeds office. According to the standard Offer to Purchase and Contract in North Carolina, possession does not transfer to the new Buyers until the Deed is recorded with the county Register of Deeds office.
When agents are designated to handle the key exchange, some complications may arise. A thoughtful Seller or Seller’s agent will wait to deliver keys once the Deed is recorded. If a Seller or Seller’s agent allows the Buyer to take possession prior to the Deed being recorded, the Seller is taking on potential risk. For example, the Seller could subject himself to both personal injury claims and damages to the property caused by the Buyer, Buyer’s agents or other third parties. It is important to note the Seller still owns the property until the Deed is recorded.
Despite these risks, in most cases the Seller or Seller’s agent delivers the keys to the Buyer or Buyer’s agent at the closing table. Why you might ask? Most Sellers I have encountered have not been properly informed on the legal ramifications of the ceremonial key exchange. Moreover, Buyers or their agent can be persistent particularly when they have a moving truck full of their furniture waiting to be delivered. This is why it is important for both the Buyers and Sellers to be on the same page when it comes to the exchange of keys and understand that there are many variables that can affect recording.
Although we at Hutchens Law Firm try to record as quickly as possible, there are several criteria that must be met before recording at the Register of Deeds office. These requirements include
- the receipt of all executed documents and funds related to the transaction,
- funding approval from the Lender, and
- the submission of updated title prior to recording.
With all the moving pieces related to a closing transaction, same day recording is not always guaranteed. I would encourage agents to educate their clients on this critical timing issue to ensure a smooth, compliant transaction without unnecessary risk.
Published by Bess Harris Reynolds on August 24, 2015