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TECHNOLOGY
action is predominantly offline and highly labor intensive, with documents surrounding proof of identity for the history of property ownership, tenants and modifications. A blockchain solution for digital identities and title registers enables a streamlined and secure due diligence process for buyers or lenders on the properties they are purchasing, eliminating elements of human error and fraud. This would also open up opportunities in countries with no mandatory land register and / or field book as sensitive information secured on the blockchain contributes to the credibility and authentication of information.
Rental Agreements
Smart contracts( sitting on the blockchain) can be used to create smart tenancy agreements. This enables details of the contract such as rent value, payment terms, and information around the state of the property to be agreed and signed digitally between landlord and tenant. Following this, the payment of the lease and the eventual return of a security deposit and payments to external agreed contractors can all be initiated automatically via the smart contract once agreed upon criteria is met. Once again meaning a more efficient, auditable and legally enforceable process.
Game Changer
In the past, we have seen the Real Estate Industry fall behind the adoption curve, but blockchain offers brokerages an opportunity to pivot and be part of a digital and decentralized revolution where property exchange finally transforms into a self-sustaining entity.
Smart contracts will allow brokers, owners, and investment funds to maximize profits by speeding up processes and keeping intermediaries out of the ROI equation. Liberating buyers and sellers from third-party services free up funds to spend on higher-end property or more comprehensive agent services.
When profit filtrates through such an intricate system, as it does in real estate, there is always a loss. In simplifying the system with smart contracts and blockchain technology, real estate will profit in ways it never has before.
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16 SEPTEMBER / OCTOBER 2018 SA Real Estate Investor Magazine