Reducing fraud in the property market through blockchain

Fraud is at an all-time high, especially in property. Its estimated that people have lost over £216 million in the last year. As the cost-of-living crisis prevails, it is likely that we will see fraud continue to rise across all industries.  

Fraud in the property market is not a new phenomenon. The process of renting, buying or selling a property is lengthy and complicated, involving many steps and middlemen. Each one of these steps present an opportunity for infiltration. At the heart of it, property transactions are opaque — blockchain offers a way to make this process more transparent, and in turn, safer.

One way that blockchain technology can minimise fraud is through NFT smart contracts. Simply put, these can execute an if/then function. In practice this may look like – IF: money received THEN: Transfer deed.

NFT smart contracts can be evaluated to ensure that all parties are happy with the terms of the function. So, if approved and implemented, everyone can enjoy peace of mind that what they have agreed upon will happen. They can also be leveraged in a renting scenario, whereby once the rent payment is received, the lease is automatically renewed and secured. Benefits are twofold —reducing late payments for landlords and promoting security for renters.

Legal expert Thomas Ferguson from leading law firm Russell Cooke has spoken about the assurances offered by blockchain, stating: “Since the NFT exists on the blockchain, the use of an NFT as a legal title will reduce the existence of title fraud as the NFT will be immutable.”

Would you use a smart contract to buy or sell a house?

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