In today’s world, nothing screams louder about transparency, trust, and immutability than the blockchain. Perhaps these qualities may now be considered more of a cliché on the internet, they still hold true when it comes to using the technology as irrefutable proof of ownership.
The blockchain is now an inspiring landmark in estate management, as it is increasingly being adopted as a platform for land registry, property ownership records, as well as a secure, trusted property sales and management system, thereby eliminating distrust flaws in the sector.
A great number of blockchain startups are addressing one of the direst situations in estate management – land disputes. Broadly speaking, the lack of proper deed-titling afflicts a host of physical asset classes such as lands, houses, and cars – a problem thought to be worth about USD 20 trillion globally. The good news is with blockchain-enabled registry hope could be restored to billions of people whose property may at some point become casualties of bad socio-economic infrastructure.
Although many government policies and institutions such as the United Nations have made attempts to provide lasting solutions to stem the tides of corruption and disputes in land claims, the fact of the matter remains: policies are instituted by humans and they can thwart or manipulate them for personal advantages. This makes such systems rather unreliable despite sunken huge investments.
A developing world perversion
For most people living in developing countries, proof of land ownership can be a real pain, as these geographical locations are continuously taunted by poor economic conditions, and the land registry sector isn’t left out. Numerous cases of land disputes involving ownership claims with only word-of-mouth historical accounts to back them have led to several social degradative vices as well as continuous tension on land acquisition and property security.
Just some days back, a land-related crises led to the deaths of nine people in India, when a claim to a deed purchased two years ago resulted into a shootout.
Sonbhadra: Casualties reported after firing between two groups over a land dispute in Ghorawal today; District Magistrate Ankit Kumar Agarwal says, "We can't tell exact numbers as of now. 9 persons brought to District Hospital. Some are injured & some are dead." pic.twitter.com/QDeL1QylFK
— ANI UP/Uttarakhand (@ANINewsUP) July 17, 2019
In India, land disputes are mostly attributed to conflicting laws and with the majority of cases ending up in court:
“Land disputes account for the largest set of cases in Indian courts – 25% of all cases decided by the Supreme Court involved land disputes, of which 30% were related to acquisition; and surveys suggest that 66% of all civil cases in India are related to land or property disputes.”
This brings to question whether algorithmic governance – where code is law – could play a significant role in reducing the number of land-disputes that make it to court, with technologies such as smart contracts easing trades among parties, thereby instituting transparency and disintermediation of trust. However, for the already existing cases of land disputes, without prior legal documents backing up claims, judgments are more likely to be based on emotion rather than fact and truth.
In general, systemic fault-lines within government structures make it rather impossible to implement efficient land administration. In other words, “many constitutive and regulative institutions suffer from massive functional deficits” and, therefore, constitute fundamental cracks to theoretically foolproof land administration policies. And that’s just a part of the problem – policies lacking sufficient empirical infrastructures.
About a year ago, a report by Reuters reflects the dire situation of land ownership in Kenya, where;
“Two-thirds of Kenya’s land is customarily owned by communities without formal title deeds, making it easy for corrupt individuals to sell or lease the land without the communities’ knowledge.”
A Kenyan victim of double ownership of a piece of land Joseph Njuguna shared his story with Reuters of how he had been displaced of his alleged rights to a piece of land he purchased more than half a decade back and was suddenly overthrown by another citizen whose claim wasn’t backed either by any document. He told the news outlet:
“I asked for the title and he couldn’t produce it. But he still claimed the plot was his.”
Another story told by Humphrey Kitala a Kenyan who bought half an acre for USD 30,000 through what seemed to be a legitimate estate management agency, only to discover a month later that he was a victim of double ownership – with title deeds on both ends.
In Ghana, the situation might be worse. It was reportedly disclosed by the land commission that “more than 80% of landowners lack title 60 years after independence”, with land ownership loosely held by oral agreements.
In a more elaborate view, with two-thirds of lands in Africa owned communally, the exposure to land-related fraud is inevitable as a cross-section of the population is void of title deeds. And in the case where one exists, authenticity is an accompanying problem in most cases.
In other countries like Brazil where disparate history books exist for land registry and the situation is further complicated with about 3,400 private firms who check and register land ownership, further plunging the hideous system into a downward spiral of double allocation.
Blockchain land registry to dissolve land disputes
Situations such as those of Njuguna and Humphrey as well as the “corrupt cartels [who] often make entire files disappear so that they can illegally acquire and transfer lucrative plots, from public forests to school playgrounds” have inspired startups and real estate firms like Land Layby to adopt blockchain technology to seamlessly address the fraudulent acts involved in land registry.
In Ghana, Bitland seems to be doing a pretty good job in confronting the woes of land disputes and aims to “unlock trillions of dollars in locked capital”.
In June, Cyrela Brazil Realty, a giant in the real estate business in the country opted for blockchain-based land registry. Meanwhile, In Georgia, developments towards blockchain-based land registry have been ongoing for a while now, and it seems the adopters tout the abilities of the blockchain to allow them to cut the cost of property rights registration, aid in real-time auditing of the registry, as well as add a layer of security to the registry data.
With other parts of the world exploring opportunities of blockchain-based land registry at a fast pace, it only seems logical for developing nations of the world to adopt what works when it comes to land registry, and there’s no denying the fact that blockchain is position to revolutionize the estate industry with credibility based on its immutability and trust infrastructure. Sometime last year, the UK’s HM Land Registry launched a project based on the distributed ledger technology to revolutionize the process of land registration in the company, to hopefully gain faster, simpler and cheaper land registration process.
Having blockchain-based solution isn’t enough, and alone it becomes inoperable. It requires adoption, integration and adequate understanding of the working parts.
Image Courtesy: Unsplash