Think About Signatures On Your Copies Of Agreements And Tax Returns

It always amazes me how often lawyers, accountants and title company closers give clients unsigned copies of their important legal documents such as tax returns, refinancing papers, loan closing documents. They probably hand them off and never think of them again. As a commercial litigator, I think of them all the time.

Why do I think of them? Because inevitably years later that missing signature matters. Here are a few examples.

In the context of Chapter 13, the trustees are entitled to mandatory disclosures including tax returns. Virtually every client I see hands me an unsigned tax return. How do they know that this is the version or draft that was the one that they signed and filed? When trustees have been given unsigned copies they return them.

If you apply for a new loan for a car or home mortgage, you need to submit tax returns.

Why would you ever want such an important document in your possession to be unsigned? Each year your tax return file should include a copy that is stamped “File”, signed by you, and a note should be written on the first page at the top right about how and when you filed it. If the accountant filed it electronically, you should insist on receiving a copy of the one page filing receipt and attach that to your file copy. Also attach a copy of your check if you paid a tax. Only then can you throw it in the drawer or file box and forget about it.

Another thing I see all the time are unsigned closing documents. At a refi for example, the lawyer or title company closer may show up with an extra pile of the documents for the client or borrower in advance. It is convenient. It saves them the trouble of making copies of the signed documents but you pay a price for that convenience. The client is left with a pile of unsigned papers. And years later when they may end up in litigation or even foreclosure, it creates needless confusion and ambiguity.

I just had a client come in last week for help with a co-op foreclosure. She had a loan and security agreement with her and her son’s name on it. Her son said he never signed it. I have no way to tell without seeking discovery later. In this case, that would be difficult since the lender elected to foreclose using the Article 9 UCC (Uniform Commercial Code) non-judicial process – in other words, to foreclose without a court case. The client may have defenses to the foreclosure but has elected to file for Chapter 13 bankruptcy protection instead because of other debts.

Another obvious situation is with contracts. Under the statute of frauds, certain contracts must be signed by the party to be charged in order to be enforceable. If you have a contract that is signed but cannot find the original, that unsigned copy may be worthless in court.

I see this happen in the context of foreclosure workouts also. Clients come in with unsigned forbearance agreements and loan modification agreements that they believe are actually in full force and effect and which sometimes are not.

If you are ever in a situation where someone gives you an important file copy of an original document that you have signed, here is what I recommend that you do. Go through the papers you are given page by page and match them up to the original papers that you signed. Then page by page, sign the file copy just the same as the original and on the front cover make a note of the date and time, who was in attendance, and where you signed this. You may never need this information but it can’t hurt. If you do need this information later, you can say that you are in possession of a true copy of the signed original and that your notes were made contemporaneous with the signing of the original. It may solve some evidence problems if you ever find yourself in a court for whatever reason. The other person at the table with you may make faces, complain and generally act impatient but they’ll just have to deal with it.

If you are ever given an agreement which has to be signed by you and the other party – make sure your file copy has all of the signatures on it.

If those signatures were notarized on the original, make sure they are also notarized on your file copy.

Another thing you might do is ask for a complete copy or pdf scan of all of the signed originals. The only reason that the lawyer, accountant or title closer may not want to do that is because it is not convenient for them and it will take more time, especially if the pile of documents is 1 to 2 inches thick. My answer to that is “too bad.” Tell them to just do it. Being lazy is never an excuse for a professional to hand you a pile of unsigned documents. That missing signature may cause you grief later.