Taking counsel: Estonia unfurls new e-notary system

  • 2007-06-27
  • by Daisy Tauk
Based on a request from the Estonian Chamber of Notaries, the Centre of Registers and Information Systems, working under Estonia's Ministry of Justice, has created a new information system 's the so called e-notary. Notaries started to submit documents to registers (land register, commercial register etc.) via the new system on June 1 this year. The new system significantly expedites the work of courts administering the registers. Even more importantly, the system is set up so as to prevent the possibility of making double transactions.
In Estonia the land register expresses the property regime of immovable properties. If, on the basis of information entered in the land register, a person acquires real estate property ownership or a restricted real right by a transaction, information entered in the land register is deemed to be correct with regard to the person.

Real rights will receive a ranking through an entry in the land register. Ranking of rights is based on the principle that the right that was created earlier has a priority over the right that was created later (prior tempore 's first in time, priority in right).
Entries in the land register will be made in the order of arrival of applications. If applications are submitted concurrently, or if they arrive by mail on the same date, they are granted the same ranking, and this will be indicated in corresponding entries. The importance of the ranking is material, especially in cases of compulsory sale of real estate properties, as the claims, especially those secured with mortgages, will be satisfied according to the ranking of the real rights.
Formerly a public notary sent a registration application of a real estate property transaction or incorporation of a legal entity to the register on paper by mail, the documents arrived at the registry and relevant entries were made dependent on the mail delivery time.
Now, however, the registration application by the notary and relevant transaction or incorporation documents will arrive with the information system of the register promptly after the act of attestation is made, and the information system of the register will automatically record the arrival. The submitted document will automatically have a reserved ranking and all entries will be made on the basis of this ranking.

Formerly a bad faith owner of property could, for example, make several transactions in different notaries' offices on the same day 's e.g. could sell an immovable property twice 's which meant further results were dependent on which notary's application arrived first in the land register, delivered either by notary's employee or by mail. However, now, or from the time when the new e-notary system started to work, this risk is managed: the arrival of applications is seen from the information system of the register in real time and such double transactions are no longer possible.

In addition to managing the aforesaid risk, the new e-notary system uses data of other registers on an online basis. Data related to transaction parties and the subject of transaction is automatically imported into the contract from other state registers. This excludes human mistakes 's e.g., mistakes in personal identification numbers or land register numbers while inserting them into the contract.
The new information system has also made payment of state fees much more convenient for the notary's clients. The e-notary information system automatically compiles a payment order formula for each specific payment, with necessary data already filled in.
Thus, the e-notary system also significantly decreases cases when the court administering the register is not able to satisfy the registration application due to data mistakes in the state fee payment order or in transaction contract.

Daisy Tauk is a partner at Teder, Glikman & Partners, a member firm of the Baltic Legal Solutions, a pan-Baltic integrated network of law firms, including Kronbergs & Cukste in Latvia and Jurevicius, Balciunas & Bartkus in Lithuania, dedicated to providing a quality 'one-stop shop' approach to clients' needs in the Baltics.