The jury is still out on the potential of blockchain in the enterprise. While some consortiums have been formed and PoCs are on in the banking sector, some banks have already started using private blockchains. Many other businesses are also exploring the technology. There are potential use cases for the real estate sector to leverage this technology.
Godrej Properties is considering to host a session on blockchain for its senior executives. The objective is to evangelise on the concept of the technology because there are times when bitcoin and blockchain are used interchangeably and also how certain concrete use cases can emerge for the real estate Industry. The session will have the top rung of the company spending time on understanding the technology. This will include the MD, CFO, CMO, CBO, etc. Henceforth, based on interest shown by the respective CXO, special session will be done for their team, separately.
Blockchain consortium for land titles
For the real estate sector, blockchain can be used in managing the land titles. The Government has to take a lead in pooling a database of land title related information. “In this Industry, the biggest pain point is to validate the authenticity of the papers, to buy land parcels. The characteristic of the technology being able to rightly authenticate the land owner of the land title can be a gamechanger,” says Vineet Bhardwaj, Head- IT, Godrej Properties.
A consortium of real estate players, Government, banks, credit rating companies, regulatory authorities, registration authorities and other stakeholders can be formed to enlist and check the land titles. The customer will not have to hassle separately for various home buying procedures be it buying the property, registration, paying stamp duty, getting a loan, etc. The entire real estate value chain can be hosted on blockchain.
Challenges in the real estate sector
A majority of litigations in India are land and property related. Blockchain has the potential to reduce them. It offers the characteristic of consensus and immutability. The property buyers can be assured about the genuineness of the property title, when checked using the blockchain platform. Even, while the property is listed in the land registry, it is done after getting a go ahead from the respective stakeholders to avoid fraud.
“A consortium of real estate companies can in all probability, will eliminate the middleman or the ecommerce players (the aggregators) in the Industry,” says Bhardwaj. Similar to how, while they entered the market, reduced the role of the real estate brokers.
A few state Governments are in the process of doing land records on blockchain. The RERA legislation can be a kind of a feeder for using blockchain. The regulation requires permissions and also the fact that it endeavours to eliminate intermediaries will drive using of the technology.
Godrej Properties is evaluating with multiple vendors in this area. “We have met many vendors to discuss multiple use cases for Blockchain. A PoC will soon be done on an internal use case for blockchain,” says Bhardwaj. The potential use cases include, smart contracts, JV deals, where documents changes hands. This can be in respect to the dealings with the home buyer, JV partners, etc.