Secret brokers' database under investigation

Kristjan Gross soovis 2011. aastal uut portaali avades kinnisvaraturgu läbipaistvamaks muuta.

PHOTO: Margus Ansu

Brokers have collected information on real estate transactions including addresses in the password-protected database for years. The database includes information on sale of apartments, including dates and prices. Valuable information for sure; however, making information as detailed as this publicly available is illegal, whereas the leak can probably be traced back to a state agency.

The Estonian Chamber of Notaries started receiving complaints from people who had sold their homes only to find detailed information of the transaction published online at the end of last year. “Signals that someone is disclosing prices of transactions started coming from small settlements where people know each other,” says chairman of the chamber Tarvo Puri.

Irritated clients turned to notaries and asked how something like that was possible. “The information cannot be leaking from us on such a nationwide scale,” Puri argues.

Notaries are obligated to keep transaction information secret, while they also have to forward it to a national transactions database ten days after sale of immovables. The latter is administered by the Land Board as the cadastral register, and the agency is afraid it is their database that is leaking. The leak must therefore come from licensed valuators of land as they are the only officials authorized to make queries in the database. People with this kind of access currently number 31.

«Estonian law strictly limits availability of transaction information – the Land Cadastre Act states that valuators with access to the Land Board's database must ensure confidentiality of data,» says the board's PR adviser Agnes Jürgens.

Complaints more frequent

Even though the website states that its information comes strictly from real estate bureaus and public announcements, the Estonian Chamber of Notaries filed a complaint with the Data Protection Inspectorate last year, according to which the website has data on transactions in which brokers were not involved.

«It does not seem very likely that real estate agents are capable of collecting that information from all over Estonia,» Puri says.

«We have reason to suspect that the website uses data from the Land Board's transactions database,» Jürgens adds.

«We do not know how the data ends up in the brokers' portal; however, current legislation states it can only be accessed by licensed valuators,» says Tiia Redi, executive manager of the Estonian Association of Appraisers.

It is strange that the portal has been allowed to operate for years. A quick internet search shows it was founded in 2011 by self-proclaimed real estate expert Kristjan Gross. «Had people known the prices paid for real estate during the boom, the latter would never have been created,» Gross wrote as part of the website's introduction at the time.

An article from years ago suggests that the portal charged 99 cents for a query. It also reveals that the database had information on more than 5,000 transactions from all over the country when it was launched and that data was added regularly.

«When we launched the portal, we talked to the inspectorate, and they did not perceive a problem in terms of the level of detail,» Gross says now.

PR adviser at the Data Protection Inspectorate Maire Iro says that wile the watchdog knows of the portal, it did not receive any complaints until recently.

It is probable that the information offered by the portal has become more detailed over the years as apartment numbers weren't initially displayed. Searches of price information could be based on county, parish, town, borough, street, size and condition of real estate object.

Pioneer or violator

«Several people have turned to the inspectorate this year, saying that the portal has disclosed information concerning them that should not be public,» Iro says. She adds that it is not just a matter of protection of personal data but also disclosure of information with restriction on access. «Brokers must proceed based on the principles of protection of personal information and confidentiality of transactions, which is why they are not allowed to spread information collected from transactions.»

The matter is made more peculiar by the fact that the portal's owner works as a valuator of land and admits he has access to the Land Board's database.

Iro said the inspectorate has brought proceedings against the portal's operator, which is why no further comment is possible.

Whether Gross is a pioneer in his field or someone taking advantage of powers is for the investigation to determine; however, he does not want to answer questions concerning the website and says he has recently restricted access to it.

«The portal is down today. It is not my interest to be in conflict with the law,» Gross answers when asked whether he perceives a conflict of interest in the fact that as a valuator he is obligated to keep transaction information secret. He also claims he does not know how many users the portal has or how many transactions its database covers.

Gross says that he started limiting the number of users at the beginning of summer following attention from the inspectorate. He is supposedly the only one who still has access. «Basically we're closed.»

The website is still up but requires a password to access.

Classified in whose interests?

Brokers are allegedly disgruntled over the database's disappearance. «It was good to know what was happening on the market,» Gross says.

The allegedly closed case of raises the question: why should information of real estate transactions be classified in Estonia? Isn't the fact that such a database was allowed to operate for years proof of senselessness of the confidentiality requirement? It has not interested the inspectorate until now. What is more, why should people pay third persons for information the state collects?

«It is possible to use transaction and land register data to indirectly identify persons who have participated in transactions,» Jürgens explains. The state has so far kept to the principle that people's income is not public information, and that includes proceeds from sale of real estate.

That said, similar transaction data is public in the Nordic countries that contributes to more accurate real estate statistics. The board currently only publishes the number and average value of real estate transactions in different regions.

«The Land Board's information is not enough for a professional broker. I see it in my work that this level of classification rather harms ordinary people,» Gross finds.

«I do not think this information should be secret no matter what. There are countries where sums are public. Perhaps it would be easier for people to buy and sell real estate if they could see accurate price information,» notaries' chamber chairman Puri agrees.

«The trend is towards openness elsewhere in the world. The Land Board will analyze the possibility of amending laws that regulate use of transaction data. The main question is whether and to what extent society is ready for all real estate transactions to be made public. Disclosing sale prices could constitute sensitive information as it ties into people's financial interests,» Jürgens adds. She says that the board feels corresponding public debate is necessary.

«The matter is polemic as it has two opposing goals – on the one hand transparency of the real estate market, and on the other protection of personal information and notarial secrets,[ Maire Iro explains. She adds that making the data available to real estate firms and brokers would place individuals at a disadvantage.