Many property owners have been victimized by mismanagement, which causes legal problems, damage to properties, increased rent arrears and vacancy rates. In Australia, a study by the Property Council of Australia found that the average cost of property management is 300 AUD per month.
However, the study also found that the cost of mismanagement in Australia is $1 billion per year. It may sound unorthodox, but empowered property ownership on blockchain is an option that realtors can employ to address the problem of subpar property management.
The parchment Certificates of Title (CT) is a traditional form of land title in Australia, issued by the state’s land titles office, which provides a proof of ownership for a piece of land. Concerns were then raised about CTs’ legal capability to prove land ownership after an omnibus bill was passed in 2019.
This omnibus bill is the Agriculture and Other Legislation Amendment Bill 2019, which effectively makes CT a non-conclusive proof of ownership of land. What motivated the authors of the bill to file it was how paper certificates were vulnerable to fraud and forgery.
Citizens receiving their CT in paper form now only serves a sentimental purpose rather than a legal one. There were hints and rumors that state that the titles have been digitalized into entries in a database that is maintained by a few private companies.
These rumors turned into allegations, where the private companies in charge were accused of having the ability to use the digitalized land titles in the database to issue debt against property owners. If a private company has a mortgage on a property, they can use the land title in the database as a collateral for a loan. Also, if the company defaults on the loan, then the lender could seize the property.
Allegations turned into serious concerns among property owners, where they worry about losing their property if a private company defaults on a loan. Furthermore, the system where private companies maintain the database has been criticized for its lack of transparency. Property owners are not given enough information about how their land titles are being stored and used.
With the state of property management in Queensland, its citizens developed a deep level of distrust in the government. It is important for property owners to understand the risks involved with the legal changes in order for them to take steps to protect their titles.
Blockchain, an emerging technology that has been found to be useful in improving digital systems and processes, may just be the solution that Australian property owners are looking for. Not only will it be able to provide records with transparency and immutability, but changes are easily monitored and tracked.
A blockchain-based land registry will create a secure and tamper-proof record of land ownership. This will make it much more difficult for private companies to use land titles as collateral for loans. The entire database will be transparent, meaning anyone can see the history of transactions made on the land.
Property owners will be able to have more confidence in their land ownership, as well as the government. Not only will they see exactly who owns the property, but they can also monitor how it has been transferred over time. The blockchain-based land registry will also provide enterprise-grade security, meaning that it would be very difficult for criminals to hack or tamper with the records.
Legal concerns among property owners, especially when they are against private companies, can seem daunting and discouraging to the point that it prevents people from fighting for their ownership rights in court. However, a blockchain-based land registry can vastly improve the system of land ownership records and empower landowners by leveraging blockchain’s secure, transparent and efficient nature.
