Land is one of the largest classes of assets in the world. Savills—a London-based real estate advisor—estimates the global value of land at $217 trillion. This figure surpasses the value of all the globally traded securitized debt and equities by nearly a third. Consequently, demand for land for commercial estate investment and supporting infrastructure has skyrocketed.
In the recent past, the sector has delighted in keeping several facets of its operations such as land transfers and information secret perhaps in an effort to generate a potential competitive edge. Lengthy queues and perpetual paperwork during land transfers have dissuaded many people from following processes at land registries, making them opt for advocates, brokers and other third-parties to handle the processes.
These middlemen, however, usually take advantage of the situation to charge high fees, even when some of their transactions are fraudulent. In a decade that has previously witnessed the disruptive impacts of the Blockchain technology, players in this sector still operate in an industrial era culture.
Land LayBy (LLB), a Blockchain start-up based in Kenya with multiple subsidiary and satellite office including New York, London, Melbourne and Accra, intends to disrupt this multi-trillion dollar industry. LLB is creating a trusted shared distributed lands registry that will record all buying and selling transactions in a transparent, immutable, and auditable manner.
What is the problem?
Keeping an updated account of who owns what pieces of land is a complex undertaking still relying on outdated processes which are low-tech affairs. Today, land transfers often involve mountains of manually signed documents, envelops and couriers. Even if a country has a functioning lands registry, only 30% of people will have access to land titling.
This means that 70% of the world’s population cannot access land titling even in cases where the countries have functioning lands registry. Given land, as a factor of production has immense business potential, its demand has soared in recent times. Despite the increase in demand, there are many aspects of land transfer transactions that are outmoded and susceptible to simple clerical errors and forgeries.
For instance, information in the land registry can go missing because a clerk has failed to update the records during manual registration. In Kenya and most developing countries, Land Registrars can be compromised to destroy or hide certain land records, a recent reference can be found here. Besides, it can take months for an actual transfer of property to take place from the time the purchasing contract and bill of sale is signed.
Land LayBy solutions
The problems in land management and transfers are due to the fact that current land registries are centralised entities. As such, these systems are bedevilled by the following problems:
- Lack of information about land that can be trusted by all the stakeholders;
- Numerous cases of corruption where buyers and sellers have to pay extra fees to expedite paperwork or facilitate a winning bid for a piece of land; and
- Lack of a credible platform that can act as a global source of truth about land transactions.
In a nutshell, getting every stakeholder to agree on every phase of a land transaction, and to record it immutably, is a feat of coordination, security, and trust. Blockchain is an electronic registry which can record all land transactions in a transparent, immutable and auditable manner.
The Land LayBy ecosystem has the following Blockchain-enabled products:
- Listing Platform;
- Transaction Platform; and
- Independent verification database of land ownership
#1: Listing Platform
The Land LayBy Listing (LLL) platform will allow sellers to list their properties. This will allow investors to find properties they like in an open and transparent process. LLL platform will allow buyers and sellers (also called clients) who are registered to access information about land to help them make informed business decisions.
It will also feature producers (a consortium of anonymous advocates, surveyors, valuers and other professional bodies) to validate land listings and deals generate on the platform. Producers will also be registered on the platform, but will have exclusive access to the DApp (Decentralized Application) to allow them validate land transactions without the involvement of LLB.
#2: Transaction Platform
The Transaction Platform will facilitate processing of paperwork, payments and records all the steps on the Blockchain. Sellers will share their land details on the platform, which will be visible to all the stakeholders in the ecosystem. Land LayBy is designed to protect the privacy of land list owners to the extent required by the local commercial laws. The land information will be visible but the land owners privacy will be protected by anonymous identification numbers and only be visible once there is a no return commitment to transact between two parties. While creating the land listings, sellers will include all the land related data with their ID on the platform.
Any person can post his/her land details to the platform. However, before the conclusion of inquiries and final transfer of land ownership, clients will be required to complete the transactions using fiat currency.
In future, and subject to the prevailing regulatory laws and policies, clients will have the option of using either fiat currencies or Harambee (HRBE) Tokens. Properties listed on LLB will be verified by a consortium of advocates who are registered to access the platform.
#3: Blockchain Land Records
The LLB Blockchain Registry is a set of smart contracts created to store land records on the Blockchain. The centralised server will store all the land-related data similar to a land management system but on a Blockchain. A Minimum Viable Product (MVP) version of the platform has been developed and will be deployed on the Ethereum under ERC 20 standards after the distribution of Harambee tokens.
Harambee tokens (HRBE) will be the engine that fuels all the transactions on the platform. Producers will be incentivised for successful validation of transactions in tokens and fiat currencies which are equivalent to HRBE tokens since the platform can only hold HRBE tokens.
To access certain advertisement privileges such as priority listing, land sellers will be expected to buy appropriate membership on the platform. The platform will allow sellers to upgrade their memberships by transferring required HRBE tokens to the LLL wallet. Certain memberships will allow clients to edit their listing profiles after successful posting.
Once the land sale transaction is initiated, stakeholders involved will transact off-chain via conventional channels of conveyance where such conveyance will be mediated by lawyers of their choice who are registered on the platform.
Keeping track of who owns what pieces of land is a complex undertaking. Land transfers often involve mountains of manually signed documents, envelops and couriers. Blockchain technology promises to disrupt this industry and usher in a new era of transparency, openness and incorruptible land ownership.
Transitioning to Blockchain is necessary buyers and sellers to exploit their full potential in the properties sector. Land LayBy is implementing the next-generation Blockchain-based land registry platform to help buyers and sellers maximize their business potentials. You can be part of this future by participating in an ICO that is currently ongoing.
- “World Real Estate Accounts for 60% of All Mainstream Assets,” accessed August 10, 2018, http://www.savills.com/_news/article/105347/198559-0/1/2016/world-real-estate-accounts-for-60–of-all-mainstream-assets.
- “Worldwide Land Titling Records Report,” Text/HTML, World Bank, accessed August 10, 2018, http://www.worldbank.org/en/topic/land.