Case Study: Blockchain Takes a Spin Around the Real-Estate Block

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Discussion with a real estate agent

Blockchain technology is now helping one South American city with its real estate registry and the tracking of ownership.

Name of organization: Municipality of Pelotas, Rio Grande do Sol, Brazil

Industry: Government

Location: Pelotas, Rio Grande do Sol, Brazil

Opportunity or Challenge Encountered: Brazil lacks an integrated system of land management, with administration fragmented across different government levels. Registering a property in the country involves 13 separate steps. The survey database and registration databases kept by real estate registry offices “are not integrated and different identifiers are used for the same piece of land, creating uncertainty around identification of the property,” according to a recent case study carried out by researchers at the University of British Columbia, conducted in cooperation with the Real Estate Registry Office – Pelotas – RS, Brazil, Ubitquity LLC, the National Archives of Brazil, and CNPq UFSM Ged/A Research Group.  “There is also no electronic database for checking encumbrances (liens, mortgages, restrictions, etc.).” This opens up registration processes to bribery and other forms of abuse.

See also: Real-time at sea by ferry

To modernize and streamline the real-estate registration process, Brazil recently introduced the SRE – Electronic Property Registry System project. This included the establishment of a National Registry Operator, responsible for coordinating property registration between previously isolated property registration offices and to define the architecture and operating model for an Electronic Property Registry System. The challenge is to carry out this effort cost-effectively, using the latest technology. 

How This Opportunity or Challenge was Met: In April 2017, Ubitquity announced a pilot project in partnership with the real estate registry office in the State of Rio Grande do Sul, Municipalities of Pelotas and Morro Redondo. “The goal of the project was to create a pilot program for the region’s official land records in an effort to help lower costs while improving accuracy, security, and transparency of land records,” the researchers state. The pilot is a parallel platform to replicate the existing legal structure of property ownership and transferring recording within the cities.

The solution uses Ubiquity Platform Blockchain version 1.1, Colu’s API (alpha). Ubitquity’s solution through the cloud, for recording land transactions via a web front end. Blockchain technology is being used to ensure the authenticity of information related to real estate property, “to affirm for sure that a particular property belongs to a particular person,” the case study relates. The Pelotas pilot involved only a half dozen records, to test security and cost structure.

Information for the blockchain is exported from a real estate registry, which contains data including registration number for the property, the name of the owner, the address of the property, as well as the image of the property, photos of books, and the certificate. Images of the property, as well as PDFs of deeds and other documents relating to the property, are stored in Ubiquity’s cloud service. These components communicate with the Colu API, translating entered data into a format that permits assets (i.e., land) and transactions involving those assets (i.e., land transfers) to be recorded on a blockchain.

Benefits of this Initiative: “The blockchain allows ownership and title disputes to be handled in a fair and transparent fashion, and serves as a backup in case the original is destroyed or misplaced,” according to Nathan Wosnack, President/CEO of Ubitquity, stated. “Longer term, the project anticipates creating a system that incorporates the features of blockchain technology to transform the existing recording and property transfer processes.”

In addition, the researchers observe that “the potential benefits of applying blockchain technology in land registration are great – improved efficiency reduced transactional friction and better security.” However, the researchers state that while the pilot worked well, some more work needs to be done to align the blockchain-based real-estate records with legally accepted archiving practices — especially “given the requirements for long-term trustworthiness and accessibility of land title records.” Since blockchain technology is still in its early stages, the authors predict any archiving and longevity issues will be addressed.

(Source: University of British Columbia)

About Joe McKendrick

Joe McKendrick is RTINsights' Industry Insights Editor in charge of contributed case studies. He is a regular contributor to Forbes on digital, cloud and Big Data topics (full bio). Follow him on Twitter @joemckendrick.

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