Digital smart contracts are a step closer to replacing traditional paper trails in the conveyancing process after a trial using blockchain technology successfully allowed titles to be exchanged with no risk from hackers.
The two-month pilot project was run by Sweden’s land registry, Lantmateriet, using blockchains, which is the technology behind the digital currency Bitcoin. Concluding at the end of March, the trial used technology provided by Chromaway to carry out title registration digitally and securely. Title registration is a typical part of the conveyancing process that is also required in England and Wales.
Earlier this year the Land Registry of England and Wales carried out a consultation process that could lead to digital smart contracts replacing paper exchanges of contracts and mortgage deeds.
Risk of fraud reduced
The consultation asked for responses on allowing full digital conveyancing documents with e-signatures; more flexibility on Land Registry opening times; and simplifying and modernising its services.
Last month Homeward Legal reported on the first exchange of contracts in a UK conveyancing transaction using electronic signatures. The Swedish trial takes this a step further and with further trials now taking place in the likes of Brazil, Georgia and Ghana, the future of conveyancing seems to be taking inexorable steps away from paper and on to digital smart contracts.
One of the biggest criticisms of conveyancing is the length of time the process can take – anything from six weeks to six months. Giving all parties access to secure online technology to share documents without the risk of fraud would speed up matters considerably.
Document has unique ‘fingerprint’
Blockchain itself is a database maintaining records and transactions in “blocks”. As a system, it is said to be impenetrable to hackers, which is why it is the method of choice for the likes of digital currency exchange Bitcoin and is being trialled by the Bank of England for use in central banking.
Each document in the blockchain is given a unique digital code or “fingerprint” to prove its authenticity and protect its contents. Only verified digital IDs or e-signatures will be given access to the document, vouching for authenticity and preventing fraud.
In the here and now, if you want to buy or sell a property, you still need an experienced, professional solicitor or conveyancer. And Fridaysmove can get the ball rolling on your transaction by introducing you to our panel of nationwide solicitors and conveyancers.
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