Blockchain Could Make Real Estate Transactions Safer and Less Expensive
When many of us hear the word “blockchain,” the first image that comes to mind is that of shady dealings in mysterious cryptocurrencies that are linked to no precious metals, no banknotes, and no governments. The only identities are pseudonyms and alphanumeric codes long enough even to confound people who know hundreds of digits of pi from memory; the assets you are trading are not real, but neither are you. It is a digital underworld where nothing is real, and no one trusts anyone. As always, the media stereotype only tells one small part of the story. Blockchain is really just a very secure way to keep records and make transactions online. Like any other technology, it is possible to use it for good or ill. Many industries, from banking to the art trade, are adopting blockchain technology, with the effect that they are becoming more efficient. Real estate investing, in particular, holds the potential for blockchain to help it thrive during and after the COVID-19 pandemic. Smart contracts and tokenization are the blockchain applications that promise to be the biggest boon to the real estate sector. To find out more about how real estate tokenization could be your ticket to a successful career in real estate investing, contact a real estate lawyer.
Smart Contracts Make Compliance and Record Keeping Simple
If you are beyond a certain age, you remember when electronic signatures on contracts were the state of the art. With smart contracts, the automated part is just beginning when the parties sign the contract electronically. Smart contracts are self-enforcing, meaning that they are programmed to keep records automatically. They automatically record the documentation that the provisions of the contract require. This means that record keeping takes a fraction of the time and manpower that it used to take without blockchain-enabled smart contracts. The legal enforceability of blockchain smart contracts is less clear-cut, which is why it is important to work with a business law attorney before and after you sign a smart contract.
Real Estate Tokenization Opens New Opportunities for Individual Investors
Until very recently, investing in commercial real estate was the exclusive province of large institutions and multimillionaire tycoons. Blockchain technology, in the form of real estate tokenization, could bring fractional ownership of commercial real estate properties within the reach of individuals whose real estate investing capabilities would otherwise be limited to renting out half of a duplex.
A token, in this context, is a string of numbers used to identify a small share of ownership of a large real estate property. (Think of it as similar to a taxpayer identification number for a business.) It is affordable and simple to buy or sell a real estate token, as well as to collect distributions from it. As with other blockchain inventions, the record keeping and compliance are built in, helping you avoid fraud and middlemen.
Let Us Help You Today
Blockchain can help you avoid paying lots of intermediaries, but it does not eliminate the need for a Washington DC real estate lawyer. Contact Tobin O’Connor Concino P.C. for help with your case.