We’ve all heard the anecdote about Thomas Jefferson’s first draft of the Declaration of Independence, when he wrote that all men are entitled to life, liberty, and property. The other founding fathers weren’t so keen on letting just anyone get their hands on a piece of land, so “the pursuit of happiness” became a more philosophically appropriate substitute. Now, almost 240 years later, some state and local governments are still approving of roadblocks to giving property transactions the transparency that makes them more widely available, say some Texas real estate attorneys. In Montana, for instance, sale prices of real estate aren’t publicly disclosed, but that may change in the upcoming year, according to this article.
The 2015 legislature has received a request from the state’s Revenue Department to alter the laws on the books so that real estate prices can go public. Nobody in the Montana legislature has been eager about the idea up to this point, but the Revenue Department’s director “pitched the idea of public disclosure of sale prices as a valuable tool for property owners to use when challenging the department’s valuations of their property.” If you think it always comes back to taxes, to some extent, you’re right. Texas real estate attorneys, for example, can vouch for the different ways that the public/private debate plays out in terms of both housing markets and appraisal challenges.
It’s hard to nail down a list on which states allow sale prices to be published and which don’t because statutes often vary by county. But in general, there seem to be about 40 states, including Washington D.C. that allow it, reflecting the recent trend toward transparency and a potentially “huge service to the taxpayer.” The Revenue Department’s hope is that it will make its job easier, too.
Every six months there’s a statewide reappraisal of home values, and under current Montana law, if homeowners want to challenge that valuation before shelling out thousands of dollars for property taxes, they have to jump through several hoops, including non-disclosure agreements and pledges of confidentiality when obtaining access to comparable home prices.
Another problem that Texas real estate attorneys like Douglas J. Shumway point out, is that by keeping the information confidential, the state is essentially creating an artificial monopoly on real estate and market information. Other non-disclosure states have included Utah, Idaho, Mississippi and Louisiana, though some of those laws have been changing in recent years, as the Revenue Department hopes that Montana’s is gearing up to do. But because real estate agents in non-disclosure states compile and maintain private Multiple Listing Service databases to which the public has no access, the privileged information becomes a means of control, some Texas real estate attorneys have warned.
Despite the growing trend toward transparency, and despite the offer of egalitarian real estate practices that Jefferson may have been envisioning, there’s still reluctance toward full disclosure, at least in Montana. Senate Majority Leader Art Wittich, (R-Bozeman), for example, says he’s “worried about people ‘gawking’ to find out the sales prices on property sold by neighbors or friends just out of curiosity.”