Birmingham will spend almost half a million to fix computer problem hurting property sales

The city of Birmingham will spend nearly $500,000 to fix a computer problem that has been hurting commercial and residential property sales across the city for about five months.

Mayor Randall Woodfin will ask the city council to allocate $468,000 to fix computer mainframe problems and resolve the months-long problem.

Property sales in Birmingham are slow and cash payments are delayed for months because city officials are unable to confirm routine records requests needed to complete private sales.

When properties are sold, lawyers and real estate agents require a letter from the city to prove there are no liens or fees owed to the city. The city assesses fees to cover various issues, such as weed removal and demolition.

As a result, real estate attorneys are forced to withhold deposit money that would normally go to sellers until the city provides proof of clear property title.

The problems in the finance department and the price of resolving them came as a surprise to Board President Darryl O’Quinn.

“There was no discussion on this specific issue,” he told AL.com.

O’Quinn noted that the board recently approved spending to resolve another software issue, but he had not heard of issues affecting home sales.

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

“Anyone would be frustrated if your mechanic said, ‘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 extra to fix essentially the same problem,’” said O ‘Quinn. “It’s one of those situations where you have to trust the team that they are guiding us in the right direction.”

Some attorneys are retaining about $1,000 in proceeds for residential sales, but said more could be retained for larger transactions. A Birmingham closing attorney told AL.com he has 200 files in which he is forced to hold money from sellers while they await clearance from the city.

This is because the exact amounts needed to settle transactions and council fees paid will remain unknown until Birmingham’s system is restored.

Marie Sutton, a spokeswoman for Woodfin, previously told AL.com that the land registry issue is not related to a computer hack earlier this year that paralyzed systems and forced offices, including the police department, to use files on paper. Still, the problems occurred around the same time.

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

At the time, the Birmingham Fraternal Order of Police Lodge said the computer hack caused some problems, including limitations in checking to see if vehicles had been reported stolen or if anyone had outstanding warrants.

“The main thing they are doing now is trying to account for all the financial impacts of the network outage, mainly to file a claim. We were insured for this type of situation and want 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.

“My guess is it won’t be too difficult for us to get there,” he said.