Birmingham to spend nearly half a million to fix IT glitch hampering property sales

The city of Birmingham will spend nearly $500,000 to fix a computer glitch that has hampered commercial and residential real estate sales across the city for about five months.

Mayor Randall Woodfin will ask the City Council to allocate $468,000 to repair mainframe problems to resolve the months-long problem.

Real estate sales in Birmingham are slowed and cash payments delayed for months because city officials are unable to confirm requests for routine documents needed to complete private sales.

When properties are sold, real estate attorneys and agents require a letter from the city proving there are no liens or fees owed to the city. The city assesses fees to cover several issues such as weeding and demolition.

As a result, real estate attorneys are forced to withhold escrow funds that would normally be paid to sellers until the city provides clear proof of title.

The problems within the Department of Finance and the cost of fixing them came as a surprise to Council Speaker Darryl O’Quinn.

“There has been no discussion on this particular issue,” he told AL.com.

O’Quinn noted that the board recently approved spending to fix another software issue, but he hasn’t heard of any problems affecting real estate sales.

O’Quinn described it as a “revolving door of funding” for software issues.

“Anyone would be frustrated if your mechanic said to you, ‘Here’s what we need to fix this problem,’ and then came back to you a few weeks later and said, ‘We’re also going to need this add-on to basically fix the same problem. ,’” O’Quinn said. “It’s one of those situations where you have to trust the staff and know that they’re leading us in the right direction.”

Some attorneys withhold about $1,000 in profits for residential sales, but say more could be withheld for larger transactions. A Birmingham closing attorney told AL.com he has 200 cases in which he is obligated to withhold money from sellers while awaiting permission from the city.

Indeed, the exact amounts needed to settle transactions and municipal fees paid will remain unknown until Birmingham’s system is restored.

Marie Sutton, a spokeswoman for Woodfin, told AL.com earlier that the land registry problem was not related to a hack earlier this year that crippled systems and forced offices, including the police department, to use paper files. Yet the problems arose around the same time.

O’Quinn said he was told the issues with the hack had been resolved. The city is now working to determine the extent of the damage caused by the network attack.

The Birmingham Lodge of the Fraternal Order of Police said at the time that the hack had caused some problems, including limitations in checking whether vehicles had been reported stolen or whether anyone had warrants for their arrest. not executed.

“The main thing they are doing at the moment is trying to take into account all the financial impacts of the network outage, mainly to put together a claim. We were insured for this type of situation and would like to file a claim to recover some of the lost income and other expenses resulting from this situation.

O’Quinn said the city’s insurance policy covers up to $10 million.

“I think it won’t be too difficult for us to get there,” he said.