Almost every morning, overnight packages stuffed with paper arrive at the recorder of deeds office in each county.
Throughout the day, couriers hurry in and out filing legal documents to complete real estate transactions.
But in the near future, county recorder of deeds offices in Delaware might handle a lot less paperwork — or, more accurately, a lot less paper.
Two of the state’s three county deeds offices, which maintain and process all property records in their jurisdiction, will start offering the option to file records digitally.
The technology will help real estate agents, attorneys, title searchers and lenders save on the cost of filing real estate documents, and it could eventually reduce expenses for county governments as well.
On Thursday, Kent County became the first record of deeds office in Delaware to allow digital submissions, and New Castle County expects to launch a digital filing system in July.
Document submitters can choose between three different vendors providing digital service in Kent County, including a Delaware firm, Corporation Service Co.
The Prices Corner-based company calls its platform eRecording. The software is offered free to counties. Corporation Service Co. makes its profit on the people filing documents. The cost generally runs around $4 to $6 per submission, depending on the number of pages in the document, said Scott Malfitano, vice president for eRecording services for Corporation Service Co.
The digital process will be faster and roughly half the price of shipping a package overnight, he added. A county employee reviews the document on a computer screen, and with the click of a button, submitters get an instant response as to whether the document was prepared correctly. About 630 counties around the country are already using eRecording, Malfitano said.
“We’ll be able to record documents in minutes,” said Holly Malone, deputy recorder of deeds for Kent County. “We all know the price of stamps keeps going up, and we save a few trees.”
Before digital submission, all documents – such deed transfers, liens, mortgages and loan assignments or satisfactions – were either walked or shipped into the office. If a submission contained a mistake, the recorder of deeds staff would mail the document back to the submitter, who would then need to fix any errors and send it back to the county.
In those situations, the whole process could take as much as an extra week. A delay of that length is risky and potentially costly, said attorney Vance A. Funk III, who runs a Newark-based real estate practice.
A real estate transaction will only go through if all debt and claims against the seller are satisfied. Once a deal closes, the documentation has to get filed immediately in case a new lien is brought against the property.
“Time is money in real estate,” Funk said. “You want to get the documents filed as soon as possible ... because someone could file a lien against the seller between the time you settle and the time you file.”
If a lien is filed, the end result is often the attorney getting sued for negligence for not filing documents soon enough. That said, Funk does not plan to use the digital service. He employs his own courier to make daily delivers to New Castle County, and he said larger local firms will stick with their current submission system.
However, it will be “a Godsend” for out-of-state entities, like mortgage companies, and smaller local operators in the real estate business with limited staff and fewer resources to keep up with changing regulations for property documents, Funk said.
Michael Kozikowski Sr., the New Castle County Recorder of Deeds, chaired the commission that developed the standards and regulations for electronic submissions. He expects Funk is right, and people will adopt the technology gradually.
“We will continue to accept the mail-in documents. We’ll continue to accept the walk-in,” Kozikowski said. “We want to offer people the most convenient, most efficient means of filing documents.”
The recorder of deeds office is a money-maker for most counties. During the peak of the housing boom in 2006, the New Castle County Recorder of Deeds brought in $12.5 million in revenue compared to $2.28 million in expenses. Even in a slower real estate market, the office expects to clear $4 million in profit during this fiscal year.
Advancements in technology could make the offices more efficient and profitable in the future. With digital submissions, documents are also automatically scanned and filed, and as paperless use grows, open positions might not need to be filled.
“In the next five 10 years, I think we’ll see some growth in eRecording,” Kozikowski said. “As we proceed and people retire from the recorder of deeds, we will make the assessment of what our needs are.”
Malfitano said some counties get about 80 percent of their deeds office documents delivered digitally. He believes digitizing government documents has potential beyond real estate.
“One of the things we see in the future is you’ll be able to do business licenses, permits and other government documents online,” he said. “We see that to be the future.”
by delawareonline.com
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