Blockchain is now being increasingly explored by different industries that are looking to benefit from the speed and accuracy offered by blockchain technology. As we all know, blockchain is a form of distributed ledger technology (DLT) in which data is distributed over a network of computers instead of being copied. The real estate is another sector that has begun exploring the benefits of blockchain as it considers using it in the land registration space due to its ability to manage asset transfers, regulatory obligations, and financial transactions. Blockchain is used in the land registry as it enables the instant and secure transfer of property. As blockchain makes use of smart contracts, the process of land registration can be sped up as the ledger will be automatically updated instead of the buyer having to transfer ownership by means of an application form.
In this article, we will be analyzing the challenges in the existing land registry process, why a blockchain land registry platform will be a right solution and countries that are planning to set up blockchain land registries across the globe.
Challenges in the Current Land Registry Process
- The increasing number of fraud cases.
- The involvement of brokers and middlemen.
- Human error/ intervention.
- Time delays.
Why the Blockchain Land Registry Platform is the Right Solution
- Accelerating the Process– Middlemen involved in the land registry process hold information that you cannot access or might not have the required license to operate in a property transaction ecosystem. But a blockchain land registry platform will offer you a distributed database that lets anyone record and access information. A blockchain land registry platform will help you create digital titles that will help improve the process.
- Reducing Fraud Cases- Blockchain registry platforms let upload the title documentation to the blockchain network where signers can sign the document and others can access the document and verify it whenever needed. It helps prevent the forgery of documents.
- Enhances Transparency with Smart Contracts– Smart contracts, as we know, are self-executing contracts where the terms of the agreement between a buyer and a seller are written into lines of code. These make the process of land registration simpler by automating verified transactions. It lets you create a digital, decentralized ID as a seller and buyer. This makes ownership transfer seamless and much quicker than the traditional method. This helps trace back the history of ownership records. Once the registrar confirms the transfer of land title, the smart contracts trigger to update the ownership for a new buyer and the transaction corresponding to that is stored on the blockchain.
Countries Using Blockchain to Shape Land Registry
Many countries have started exploring the potential offered by blockchain in reconstructing the land registry process.
This list will comprise of countries that are in the process of building a blockchain-enabled land registry platform.
The government of Georgia is teaching people to incorporate new technologies in processes to solve old problems. The transactions are made on a private ledger and is then verified on the Bitcoin blockchain, thus providing the benefits that you are already familiar with such as auditability, transparency, security, and immutability. The next step is incorporating smart contracts into real estate processes such as rental agreements, mortgages, property sales, and transfers of ownership.
By using blockchain technology, Georgia’s National Agency of Public Registry (NAPR) gives its citizens a digital certificate of its assets. This is supported by cryptographical proof that is then published to the blockchain. The main operating goal of the project was to provide a perfect solution to citizens and governments for ensuring data safety, transparency, and auditable processes.
Today’s societies are in need of information systems that help function as an integrated whole. Estonia’s solution to maintaining a modern state is X-Road. This will allow the nation’s public and private sector e-service information systems to function in harmony. All outgoing data will be signed and encrypted to ensure secure transfers. All the incoming data is authenticated and logged. The e-Land Register of Estonia is a web application that has information on all ownership relations and limited real rights for land parcels and properties. It is paired with a geographical information system (GIS) and delivers geographical data using X-Road. This transforms the way property transactions are carried out and eliminates the need to visit public offices. It is a paper-free system that reduces the processing time for land transactions from three months to eight days. Businesses benefit greatly as they have instant access to land titles.
3. The United States
In January 2019, South Burlington Clerk Office announced its collaboration with Propy Inc., the blockchain startup, to pilot real estate transfers using the blockchain. This will help free up funds for the city and reduce costs.
4. The United Kingdom
The land registry of UK released a statement about partnering with Methods, a blockchain-based firm on 1 October 2018. This will simplify the growing land registry issues. The project is titled ‘digital street’ and will resolve the challenges that are currently faced by the UK land registry professionals.
As many industry experts and governments are exploring and implementing blockchain solutions in the land registry ecosystem, the traditional industry can be remodelled to achieve fairness in property transactions. To know more about blockchain certifications, check out Blockchain Council.