Transfer of property title likely on same day through blockchain

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Andhra Pradesh planning to establish blockchain Institute and has set a target to be blockchain-enabled by 2019. Telangana has announced moving all its land records to a blockchain-based registry.

As the exchange rate for bitcoin scored another milestone early Wednesday soaring past the historic high of $10,000, another technology blockchain, also conceptualised by Satoshi Nakamoto, is making headlines.

Multiple states in India such as Telangana and Andhra Pradesh are planning to record their land deals digitally by switching to blockchain technology that has the potential of transferring title of the property on the same day without paying bribes compared to the current process that takes almost one to three months.

For the uninitiated, a blockchain with regard to property rights is a digital ledger, a record of accounts, of who owns what, and when. Through blockchain, a digital record of transactions can be created, and a system of unerasable data records with a permanent audit trail can be instituted. What this means is that once land records or property transactions are on the blockchain software – governments, banks, agents, buyers are sellers can easily access the chain of data pertaining to that property. This will reduce fraud and ensure that properties cannot be sold thrice over to the same entity.

State governments of Andhra Pradesh, which is, in fact, establishing a blockchain institute, has run four pilot projects to test blockchain-based applications including two related to land records management. It has also set for itself an ambitious target to be blockchain-enabled by 2019. Telangana has announced that it is preparing to move all its land records to a blockchain-based registry, says a book titled Blockchain for Property – A Roll Out Roadmap for India released on Tuesday by the India Institute.

Haryana Space Applications Centre (HARSAC) has designed an intervention that used GIS technology and community involvement to fix discrepancies in land records in a village called Kamal. Similarly, Action Research in Community Health and Development (ARCH) Gujarat, an organisation an organisation working for land rights of farmers in Gujarat, has developed another process which used GIS technology and community involvement to create new land records for thousands of tribal farmers with traditional land holdings, it says.

Other states can take advantage of the experience of these two states, especially with respect to user interface, integrating legacy systems and mechanisms to address problems during the transition period, it says.

Blockchain to ensure that property title gets transferred the same day

Adoption of blockchain technology will not only ensure that property titles get transferred the same day without payment of bribes but it will make sure that public records and accessibility creates a new trust regime amongst the population and investors, as they can verify the veracity of the ownership themselves. It eases decision making with regards a transaction at the very beginning and not post facto, says the book.

Most importantly, it has the potential of transferring the conclusive titles of the property on the same day itself. At present, once the transaction is finalised, the tehsildar has to submit a demarcation of land to the registry before the registrar can register the deed. This document helps the registry verify that the transaction is indeed of the same property as has been claimed in the documents. It takes anywhere, between one month to three months, for the tehsildar to create the document. The documents are only prepared on payment of the bribe, says the book.

The existence of open, accurate public records will reduce not just the time taken for creation of these documents but also the instances of bribes through a reduction in reliability on the tehsildars. Transfer of assets will become cost-effective and efficient.

Further, the authentic data will help the banks also be certain of the ownership and will make it easier for them to grant credit to the farmers and SMEs. It will increase the credit coverage and will bring down high interest rates as per studies. It will also aid insurance companies to reduce insurance premium for immovable properties due to the surety of titles hence enabling more people to avail of the insurance at lower cost, says the book.

Challenges ahead

The biggest obstacle in the way of implementation is the absence of digital records of the land and conclusive titles. The blockchain technology is dependent on the existence of already verified and digitised land records. It will allow for real-time updation and verification but as its base, it will need the digitised records to be converted into a hash and put into the block.

Digitisation of land has to be completed which has been pending for a long time with the exception of the State of Karnataka. Post the digitisation of land records, titling will also need to be finalised. A cue can be taken from Rajasthan Urban Land (Certification of Titles) Act, 2016 through which the provisional certificate for titles are provided which need to be challenged within a timeline post the issue. If a third party then successfully challenges the title in the court, the government ensures the compensation to the buyer, as per the book.

Source: Moneycontrol.com

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