Real Property Section Council Reaches Out to Clerk of the Circuit Court for Baltimore County on e-Recording; Implementation Plan is Provided

The Real Property Section Council has requested that it serve as the liaison between the Real Property Section and the Baltimore County’s Circuit Court clerk’s office with respect to its implementation of the pilot e-Recording project to allow electronic recording of land record documents.  Barbara Hansman, Project Manager for Special Projects – Non-Case Applications, Administrative Office of the Courts Judicial Information System, sent the following message to Real Property Section Councilmember, Matthew Alegi, in response to the Section Council’s request, along with a copy of the implementation plan.  The implementation plan is copied below after Ms. Hansman’s message.    

Mr. Alegi:

Thanks very much for the listserv comments; they bring trusted insight from a group with a wealth of experience. Rather than reply to the comments individually, I have attached a copy of the plan that was submitted to the Court of Appeals which I believe will answer many of the concerns, and provides additional information about the background, scope, approach and anticipated results. The plan also references MD Rule 16-307, and how these directives will be accomplished.

On approval to proceed, we will begin to work on customizing the system, then allow any stakeholders, including your group to test, refine and generally help us build a great system. As noted in the plan, we will begin with simple, low-risk document types and interface with the finance office and SDAT, as well as back-end systems such as ELROI and mdlandrec. Use of the system will be optional. Customers who want to eRecord will have to register with the vendor and will have credentials to ensure security. Using a built-in workflow, documents will be routed to related agencies for approval; customers can check the status of a recording online.

We are looking for evolution, not revolution, and appreciate the offer to be a liaison with the title community. Please let me know if there are any other questions or clarifications needed. We look forward to demonstrating the system to the group.

Barbara Hansman

ELECTRONIC RECORDING OF LAND RECORDS

A Pilot Project in Baltimore County Circuit Court

In partnership with related agencies, we seek to move Land Record processing into the digital age

Section 1 – Overview

1.1 Background

Baltimore County Circuit Court is interested in creating an eRecording pilot project to allow customers to electronically record land record documents. Clerks of the Circuit Courts are legislatively responsible for the recordation of Land Record documents for the public, as well as providing access to these documents.   This filing process has been automated from a paper storage system to a digital image system – the Electronic Land Record On-line Imagery System (ELROI) – which is the State’s land record document management system – the natural progression of the system is to upgrade the functionality to serve customers more effectively and efficiently.

To enhance the process to electronically record land record documents, other agencies must be involved because the Courthouse process is only one piece of the overall effort. Linking agencies and the ability to exchange information via a secure web portal could allow us to create workflows to keep the documents moving through the State Department of Assessments and Taxation (SDAT), local Finance Offices, courthouses, all of whom are involved when recording a land record transaction, then on to the Maryland State Archives for preservation and public access.

The existing paper process is time-consuming, requiring a lender to make several stops to get a document to its final destination. Providing the ability to file these documents electronically will be convenient, secure, efficient, and improve accuracy, saving time and resources.

1.2 Stakeholders

1.2.1 Internal

The key stakeholders for the pilot project are the Land Record staff at the Baltimore County Circuit Courthouse, the Baltimore County Office of Budget and Finance (OBF), project management support from Judicial Information Systems, AOC, AOC Finance, and the ELROI vendor, all of whom share the responsibility for the accurate and effective delivery of this system. Governance and effective teamwork among all service providers will be of paramount importance to the success of this pilot.

1.2.2 External

Citizens conducting real estate transactions would reap the rewards of streamlined processing, as well as those preparing for and executing transactions on their behalf. The industry is a complex assortment of customers that includes title companies, bankers, the real estate industry, the bar, attorneys, builders, etc. with equal diversity in terms of size and technical capability. These are our primary customers, and the ability to eRecord has been the requested technology for several years.

1.3 Business Need

Paper processes, though effective for a few hundred years, is resource intensive both for the customer and the County. The business need starts with the ability to significantly reducing the use of paper, which includes physical hand-offs to a number of related agencies.

In the Land Record office, there is mail opening/processing, bulk drop-offs, staff review, document preparation, scanning, indexing, filing, storing, returning and, until ELROI, retrieval. As expected, economic times dictate processing backlogs. Baltimore County wishes a way to utilize available technology to eliminate time-consuming, manual work and streamline the indexing/verifying function while improving accuracy. Title companies and lenders want a secure, efficient method to file documents from their offices; meetings and interviews with stakeholders have confirmed a strong interest. Establishing a system will utilize advanced technology to better serve our customers, significantly improve judicial processes and enhance service to related agencies.   We propose that it will:

  • Provide customers with a reliable and effective capability to record electronic land record documents from their offices via a protected website.
  • Streamline courthouse receipt, processing and indexing of land record documents to help eliminate backlogs, and improve accuracy and efficiency of the process.
  • Assist finance offices in respective automation efforts by providing secure electronic interfaces to help eliminate backlogs, and improve accuracy and efficiency of the process.
  • Work with the State Department of Assessments and Taxation to verify tax status and export property ownership data for improved accuracy and timeliness.
  • Create and provide for real-time reporting at any time.
  • Comply with state laws, rules and requirements for electronic documents processing.
  • Achieve the timeline established by the State Court Administrator for the pilot.
  • Create a fully-functioning pilot scalable to state-wide use on acceptance.
  • Speculate how the internal and external stakeholders will function in the future.
  • Provide a solution flexible enough for continuous improvement but contained now for easy installation and upgrades.

1.4 Pre-RFP Research & Findings

The objectives of the research included reviewing existing processes and defining what kind of collaboration with other stakeholders would provide mutual gain. In doing so, we were able to separate what we want to continue to do and what procedures need attention. For example, 20-25% of documents submitted to the Finance Office and the Circuit Court for recording are rejected; we labeled this an opportunity. Then the goal was to analyze what the market has to offer to determine if there’s a fit for Circuit Courts and related agencies now. This effort required a wide variety of tasks including documenting the existing workflow and meeting with each stakeholder group, then examining documents for eRecording feasibility and checking interoperability with existing vendors.

A Request for Information (RFI) was conducted by JIS in 2013 to obtain up-to-date information on advances with eRecording, and based on those responses, Baltimore County staff, Clerk Ensor and Barbara Hansman attended several webinars where potential vendors explained their products.   Maryland’s unique recording laws require customization, including workflow, rules, fees, indexing requirements and more. Simply put, vendors are told how we process individual instruments – we check for required information, we obtain Finance Office approval, we calculate fees, we apply a book and page, we index and verify – this becomes the vendor’s logic; each document type is analyzed individually. As the analysis moved to less frequently used document types, they became more complicated, or required the staff to actually read the document for necessary details. Programming for low-volume, high-complexity documents may not be worth the effort at this time and may increase risk.

Many eRecording vendors offer a fee-for-service arrangement. They customize their product at no cost to the customer, and contract separately with title industry users to charge a fee for each document submitted. This method is widely used for land record recording. Over 1100 counties in the United States offer eRecording. Oddly, many counties have more than one eRecording vendor, which turns out to be a good approach because it encourages competitive fees. Maryland is one of the only three States in the United States that does not allow any counties to use eRecording.

Most systems on the market have a built-in payment system. Unlike the paper process, which collects checks and cash for deposit, and may take several days for the funding to be available to AOC, all money collected by eRecording for recording fees, surcharges, taxes, etc. will be deposited into Baltimore County’s account that night and be available the next morning.

Since the Baltimore County Office of Budget and Finance is an integral part of the overall effort, we met with them to present the opportunity and established their buy-in and support. We envision the Finance Office personnel having the ability to view submitted documents and electronically approve or reject according to tax status. For selected document types, such as agriculture, SDAT would also be able to view submitted documents and electronically approve or reject according to property transfer rules. In addition, we met with the Baltimore County Office of Information Technology for their insight with respect to the pilot project.

For integration with the current LR system, ELROI, we discussed this concept with the vendor, Liedos (SAIC) and they have confirmed compatibility for Group IV tiffs and related indexing; in fact the OPTIX system has a built-in Application Programming Interface (API) to import images and data. Additional analysis and testing will be required for real-time processing.

On the backend, we anticipate very little change to the Archives transfer. Full books would still be sent nightly, except the electronic books would be a new book type. The new “electronic” book type is not unlike the creation of other new book types which have been used over the last several years.

When considering the resources needed for such a project we expect to have an executive sponsor/steering committee, and the creation of a core work team. The management of the Baltimore County details are delegated to Clerk Julie Ensor, who will chair the steering committee. She will continue to be active on the functional side, but will delegate the technical and project management to Barbara Hansman at JIS. We assume additional steering committee members consisting of Baltimore County OBF and OIT, Title Industry representatives and others, and a core work team of subject matter experts from land record and Finance Office staff.

Section 2 – Procurement

2.1 Statement of Work

In search of an experienced vendor, the SOW was focused on the combination of Maryland’s recording requirements, advanced technology, and best fit for the Judiciary. A Request for Proposals was put out to bid, and a number of proposals were received and evaluated – both documents available on request.   If the Court approves this plan, we will be awarding the contract to the proposed vendor.

2.2 Vendor Selection

The proposed vendor offers a fee-for-service web-based model that is in use in over 1120 counties. Their model answers the Judiciary’s unique needs regarding the workflow and approval process required to record documents in Maryland as well as the requirements of the MD Rule 16-307 – ELECTRONIC FILING OF PLEADINGS, PAPERS, AND REAL PROPERTY INSTRUMENTS. The below text supports the choice of vendor to conduct a pilot in Baltimore County:

“(1) The proposed electronic filing system is compatible with the data processing systems, operational systems, and electronic filing systems used or expected to be used by the judiciary; “

The proposed vendor uses a stand-alone web-based component that requires PC hardware already in place in the courts. Using an API, data and images will be delivered to ELROI for final verification. The proposed vendor will provide end-of-day reports for entry into GEARS. This proposed electronic solution allows the State of Maryland to maintain internal processes while adding e-Recording capabilities.

“(2) The installation and use of the proposed system does not create an undue financial or operational burden on the court; “

The cost to develop and implement a pilot e-Recording system for the State of Maryland is $0.00. This customized SaaS (Software as a Service) platform charges a small fee if customers choose to use the system. Court land record operations will change but not significantly; verification of eRecorded documents will remain the same.

“(3) The proposed system is reasonably available for use at a reasonable cost, or an efficient and compatible system of manual filing will be maintained; “

The proposed vendor is web-based and accessible via the Internet; estimated fees to use the system are $4-5 per document. The use of this type of product will replace the customer’s costs for shipping documents via US mail, courier or FEDX, where costs vary based on weight, location, and required delivery timeframes. The current process to record paper documents will also remain in place.

“(4) The proposed system is effective, secure, and not likely to break down; “

The proposed vendor is the leading provider of electronic recording serves, and has the largest e-Recording network in the nation, with a 99.5% availability each calendar month, during normal e-Recording business hours, and be available 24/7, with 24-hour on call support.

The proposed vendor transmissions occur over the Internet using the Secure Socket Layer (SSL) protocol and 128-bit encryption. System access is password protected, and submitter and county users must first be authorized by submitter and County representatives respectively.

“(5) The proposed system makes appropriate provision for the protection of privacy and for public access to public records; “

The proposed vendor transmissions occur over the Internet using the Secure Socket Layer (SSL) protocol and 128-bit encryption. System access is password protected, and submitter and county users must first be authorized by submitter and County representatives respectively. Customer data is always protected and the confidentiality of customer data is protected to the maximum extent of the law.

“(6) The court can discard or replace the system during or at the conclusion of a trial period without undue financial or operational burden.”

Since there are no start-up costs for The proposed vendor, and the State of Maryland has the right to terminate the pilot e-Recording system at any time; customers who used their system would simply go back to recording paper documents. 

Section 3 – Proposed Plan

The overall purpose of a new eRecording system is to provide superior customer service to title companies and financial institutions, reduce foot traffic and processing time, increase productivity, ensure security, and improve tracking and data accuracy in safekeeping official public information in accordance with local, state and federal laws. This system will remove some level of manual intervention, provide the ability to eliminate some level of paper from the land record recording process and automate time-consuming processes. Economies in terms of time and accuracy will benefit related agencies.

3.1 Events & Timeline

The proposed vendor proposes that they can implement their product within three months of receiving final requirements. This does not take into account all of the preparation and communication needed to re-gather the stakeholders, announce the project, complete MOUs, create the teams, specify roles and responsibilities, involve the related vendors, etc. To that end, we will conduct pre-vendor meeting tasks to ensure we are prepared for a vendor kick-off meeting within 45 days of contract award. Then we will have a vendor planning meeting to articulate the tasks and lay out a high-level plan. The goal is evolution, not revolution. We must work toward bang for the buck, but not to the extent where it is not practical for the title industry or our staff. As this is a very visible project, careful change management is essential.

Below is a high-level list of tasks.

3.1.1 Prepare for the Vendor Planning Meeting (day 1 – 45)

  • Reassemble the stakeholders from related agencies to confirm and update documentation for individual areas as well as cross-functions.
  • Meet with the title industry representatives to announce the plans to gain buy-in and document any concerns. (possibly at the MLTA conference)
  • Confirm the requirements for an import to ELROI; confirm Baltimore County staff requirements.
  • Re-visit AOC Finance procedures.
  • Establish governance – an oversight/steering committee.
  • Define a core work team with representatives from each area who actually do the work.
  • Create a communication mechanism for all to access, such as a website, that solidifies contact information and backups, houses related documents and schedules.

3.1.2 Vendor Planning Meeting (day 60 – 90)

  • Provide and discuss the pre-meeting details.
  • Discuss and agree on where and who needs an MOU or Agreement document.
  • Communicate workflow requirements and acknowledgement processes/stamps.
  • Provide initial document types to be eRecorded, helper documents, indexing requirements and rejection criteria.
  • Discuss interfaces with SDAT.
  • Provide and discuss export data requirements for ELROI.
  • Concur on customer fee schedules.
  • Provide AOC bank routing forms.
  • Demo the project document repository.
  • Create a project plan/schedule.

3.1.3 Post Vendor Planning Meeting (day 105 – TBD)

  • Vendor to customize and configure the system.
  • Vendor to demo and authorize local administrators.
  • Vendor to provide access to test system for internal stakeholders, etc.
  • Core work team to test, test, test.
  • Vendor to provide test files for ELROI integration.
  • Vendor to coordinate financials with AOC Finance and the County Finance Office.
  • Vendor to establish relationships with the title industry.
  • Vendor to demo for title industry.
  • Vendor to provide access to test system for the title industry.
  • Core work team to test, test, test.
  • Pilot go-live.
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