Rahul and his wife have been in the market for a three-bedroom flat in Bangalore for over a year but they are yet to find one that suits their needs. While browsing for properties on one of the online platforms, they finally think they have found the right one. The size looks good and the price is just within their budget. Rahul opens the blockchain ledger on his computer with his private key and searches the property on the government’s Land Registry database using the property ID provided by the Seller in the advertisement.
The blockchain gives him access to key property details and a summary of the property documents - owner, property taxes, maintenance receipts, title reports, encumbrance, Khata, mortgage lender, approvals, broker and so on. To go into the details he needs the Seller to share his private key. He messages the Seller, schedules a viewing, negotiates a price and gets access to the full property blockchain.
He adds his banker to the blockchain who approves the mortgage after going through the property papers and title history. The sale deed is signed digitally and the payment is released to the Seller’s banker (also on the blockchain). Finally, the sub-registrar is intimated of the sale and the title is transferred in their joint names name in the blockchain.
Benefits of Blockchain:
Title fraud is eliminated completely as changes cannot be made to blocks in the blockchain. Property papers cannot be forged to sell a property, as the full transaction history is now available on the chain.
The role of intermediaries like lawyers and brokers will be reduced significantly, lowering transaction costs which will ultimately lead to lower property prices.
Government-level corruption is completely eliminated, as the role of the sub-registrar is limited to transferring ownership on the blockchain.
The buyer and seller need not be present in the same city as contracts are exchanged digitally (see below on Smart Contracts).
Tax revenues will go up as tracking property ownership becomes easier.
Data on property prices through sales and purchases will be available on a real time basis for every micro-market in the country making decisions more rational and property prices more stable.
There will be no need to store property papers in physical form eliminating loss or stolen property documents.
The system cannot be breached through a hack as the blockchain software is a distributed ledger on everyone’s computer instead of in one central location.
Property disputes, which form a vast majority of unresolved cases will reduce significantly freeing up time for the judiciary.
Welcome to the future of real estate purchase and ownership.