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On the Record

Technology plus transparency equals personal real estate information is out there for all to see.

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It’s called private property, but the reality is something different.

The condo in Miami, bought for an embarrassing price? The numbers are there for all to see. The secret getaway in Malibu? Your name is all over it. The exclusive co-op on the Upper East Side? A final bastion of privacy—now public, public, public.

All manner of documents, detailing everything from your annual real estate tax assessment to what you paid for your house, have long been kept on file at local government offices. Access has always been free and open to the public, provided someone was willing to schlep to an office and dig through dusty files.

Now it’s free, open, and as close as the nearest computer. The internet has transformed the way records are maintained and accessed. Many (though not all) counties are funneling documents into online databases, and privately owned websites like Zillow and Property Shark are aggregating data from public records. So anyone with a few minutes and a modem can check up on friends and neighbors, C.E.O.’s, and celebrities.

Records are made public for many sensible and legitimate reasons: to enable speedy real estate transactions, for instance, and to make sure the property tax system is transparent and fair. Not so long ago, well-heeled and secretive owners in Manhattan were benefiting from a loophole in the state law that kept co-op transfers off the public docket. But after several tax assessors were arrested in 2002 for taking bribes in exchange for cutting property tax bills—a task made easier by the fact that co-op apartment values weren’t public—the laws were changed.

The easy access to information has many people dismayed—especially high-profile homeowners, who have extra privacy and security concerns. “Who benefits? Certainly not the homeowner,” says David Ogilvy of David Ogilvy & Associates, a real estate firm based in Greenwich, Connecticut. “Do you advertise what’s in your bank account? It’s the same thing.”

The situation has led more property owners to take steps to protect their information by creative means, insiders say. “There’s more reason now than ever to hold a property in an alternative name,” says David Kramer, an agent at Hilton & Hyland in Beverly Hills.

While there’s no changing what’s considered public record, there are ways to add buffers between your property and prying eyes. “In the public record, usually the sale price and tax assessments are going to be public,” says Frank Baker, an attorney at Robinson & Cole in Stamford, Connecticut. “The one thing you can mask is the name of the equity owner.”

A way of doing this is to form a limited liability company, a business structure that’s gained in popularity since the early 1990s. As a homeowner, you can designate yourself as the sole “member” of the L.L.C. and hold the property under the veil of the company. Appoint a lawyer to be the L.L.C.’s manager, and that name—not yours—will appear on all documents.

Although an L.L.C. is relatively cheap to form—costing $2,000 or less—it does require maintenance: You’ll need to file annual or biannual documents with the state.

Other structures, such as trusts, partnerships, and S corporations, can also be used. There are varying advantages to each—an S corporation, notes Baker, can issue shares to heirs on a limited basis—but L.L.C.’s boast the least amount of red tape.

And while you can’t expunge records from government databases, you can, in some cases, remove yourself from private ones. “If a homeowner contacts us and says, ‘I saw my property on your site; I don’t appreciate it,’ I’ll take it down,” says Ryan Flack, chief executive of Property Shark. “If a guy owns 17 buildings, well, that’s a business. But if someone’s getting calls in the middle of dinner, that’s a different story.”

You can also get creative with filling out real estate paperwork. “When I represent a buyer, I put the documentary transfer tax stamp on the back of the deed, instead of the front,” Kramer says. “In Los Angeles, it doesn’t show in the tax rolls what you’ve paid for the property.” There’s a charge of $15 for that, he notes. And for an additional $250, buyers can opt to have their sale price not recorded in the multiple listing service.

Another option is to buy in a new building—although that offers only a temporary reprieve. Take 15 Central Park West, a luxury condominium on Manhattan’s Upper West Side. “A lot of big-deal people bought there,” notes Cliff. “Until this thing closes, you can’t access who the actual purchasers are. And a lot of these people put clauses on their contracts saying that even though they sign on as an individual, they reserve the right to take ownership in a different name, trust, or corporation.”

Or you could always buy a home in a place where records aren’t yet posted online, as is the case in much of Texas. But keep in mind that laws change, especially as more real estate transactions go paperless. “Technology itself is unbiased,” Flack says. “It’s how you use it.”


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