More than two years after the coronavirus pandemic disrupted city business, Baltimore still has a monthslong backlog in the office that records property sales.
The delay can cause headaches for the real estate industry and homeowners, but there’s hope that a relatively new electronic filing system will clear much of the backlog by 2023.
In a statement, the city’s Department of Finance said there is currently an 11-week delay at the city’s Property Transfer Office. Low interest rates during the pandemic helped fuel a flurry of home sales and mortgage refinancings, all of which require documents to be recorded with multiple government agencies.
While other counties already had adopted an online system called Simplifile, Baltimore City didn’t implement the system until June 2021.
Brian Leibowitz, who works at Dominion Properties in Baltimore, said he’s had to wait four or even five months recently to have a deed recorded, but in Baltimore County that turnaround time is typically 45 to 50 days.
Josh Savage, a real estate agent and wholesaler, said he helped a friend buy a Baltimore home in May with the intention of fixing it up and reselling it, but there was an issue with a lender who wasn’t able to see that his friend actually owned the property.
“The city system is showing that he just bought the property less than a month ago,” Savage said. “So we got to submit all the documents to him to show that he actually bought it in May.”
Jeffrey Friedman is an attorney at Armour Settlement Services, a Baltimore County title company. His job is to make sure that when someone buys a home, that person is aware of any liens or delinquent water bills or property taxes associated with the property.
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When it takes a long time to record property records, unpaid bills can pile up, causing confusion and often more paperwork, Friedman said. That can dampen investor interest, he said, and cause unexpected costs for the average buyer.
“It increases the risk for everybody when you can’t record something in a timely fashion,” he said.
Before the city adopted the electronic system, called Simplifile, Friedman said everything was done via paper and crucial documents were getting lost in the mail.
“I know that happened a lot during the COVID crisis,” he said. “You really have to monitor your recordings like a watchdog, otherwise you’re gonna face significant problems.”
The Department of Finance said it expects to cut the backlog to eight weeks by the end of November and eventually four weeks by early 2023, thanks to the Simplifile system and staffing increases.
Friedman pointed out that as interest rates continue to rise, home sales and refinancings will slow, giving the office time to catch up.
“The Simplifile system is a game-changer, 100%,” he said. “They would not be able to catch up if they did not adopt the Simplifile system. … We’re all rooting for it.”