White & Case Law Firm Reports On Blockchain’s Real Estate Revolutionbr>
Global law firm White & Case has published a report on how blockchain has the potential to revolutionize the way real estate is managed and transacted globally. Partners James Johnson and Holger Wolf discuss how blockchain, at its core, can address challenges in land registration by digitizing a traditional land registry and moving the industry away from its historic and now technologically outdated models.
Blockchain databases can be a tool for increasing efficiency, transparency and security for real estate transactions.
Three benefits of blockchain databases for land registries:
- Currently decentralized – a single definitive property record can be created and maintained, eliminating the need for duplication and multiple entries in decentralised systems
- Hold a complete and transparent record of a property – greatly reduces the potential for both fraud and human error, given that any change to a property record will require prior validation by the blockchain ‘miners’ within the network
- Near-instantaneous updating – eliminates legal uncertainty relating to the transfer of a title
The benefits to the real estate industry go beyond the creation of an ‘alternative’ land registry. A combination of blockchain and so-called smart contracts and property sales, purchases or leases could likewise transform the industry, reducing the need for lawyers and other intermediaries.
Asset management could also be streamlined by blockchain technology by making property more accessible and liquid as an asset class with all relevant data available on a single online platform.
Despite these benefits, there are some challenges on the way, with the adoption of the new technology varying between industries and jurisdictions. If it is to succeed, it is crucial that the gap between the technical and legal worlds is successfully bridged, and in many cases there will need to be a fundamental change in the legal approach to address the many challenges that new technology brings.