A Swansea dentist is the first property buyer in the UK to exchange contracts digitally in a process which its promoters claim has the potential to remove the need for solicitors in transactions. The buyer acquired a £700,000 commercial property in Trowbridge in an online deal secured by blockchain digital encryption technology. This is a system for rendering blocks of data tamper-proof by distributing them across ‘shared ledgers’. It is best known for underpinning the bitcoin virtual currency.
Blockchain is also being investigated by law firms and insurers as a way of creating ‘smart’ contracts, the terms of which are activated automatically on receipt of trigger information.
The Trowbridge transaction was conducted through Clicktopurchase.com, which was set up by London property investment agency Singer Vielle. The agency already conducts sales online, secured with electronic signatures compatible with the European eIDAS regulation. However chief executive Neil Singer said that blockchain could transform the process by securing all details of the transaction in a tamper-proof form and that blockchain is a ‘game changer’.
‘It is a technology which will bring speed, ease and certainty. It makes a process more efficient and removes intermediaries,’ Singer said. Last week’s purchase was completed three days after the property went on the market, in a transaction that was recorded across a blockchain-secured shared ledger in four seconds.
The tamper-proof nature of blockchain data could render redundant the Land Registry, as well as the role of intermediaries in checking every stage of a transaction, Singer said. This might include solicitors: ‘Their main function is first to check that the seller owns the property and secondly that the title is OK,’ he said. ‘If you have an irrefutable digital file you don’t need the lawyer to check it, so half of their jobs are gone.’
However, Singer said that blockchain also has the potential to protect lawyers. By storing transaction data in a tamper-proof form it could provide evidence to prove compliance with money laundering regulations. The technology also poses regulatory issues. For example, personal data stored in blockchain could not be deleted if required under the General Data Protection Regulation which comes into force next May.
Specialist trade group the Conveyancing Association welcomed the announcement. Lloyd Davies, operations director, said: ‘First, of all this seems like a positive step forward and appears to tie-in with the CA’s own campaign around the delivery of far better, upfront information in the home-buying process which can provide transparency and significant time savings and efficiencies for all parties. The movement in terms of digital conveyancing continues to develop – my own firm, Convey Law, undertook the first ever electronic e-signature exchange of contracts back in April, and the technology is now available for those who wish to utilise it. The big challenge will be bringing the industry with us in these endeavours.’
Meanwhile, in another first for blockchain technology, the government of Dubai’s land department said last week it had become the first government agency in the world to carry out all its property transactions with blockchain.