Legal challenges and opportunities of blockchain technology in the real estate sector

Abstract

Purpose – Blockchain, which was originally created to enable peer-to-peer digital payment systems (bitcoin), is considered to have several benefits for different sectors, such as the real estate one. In a standard European-wide real estate transaction, several intermediaries are involved. As a consequence, these agreements are usually time-consuming and involve extra difficulties to cross-border operations. As blockchain, combined with smart contracts, may have an important role in these transactions, this paper aims to explore its prospective challenges, limitations and opportunities in the real estate sector and discover how the traditional intermediaries have to face a possible implementation of this technology. Design/methodology/approach – This paper analyses the current intermediaries in the real estate sector in European Union (EU), their functions and how can blockchain strengthen the security of these transactions while reducing their time. The author uses a legal methodology to approach it. Findings – Blockchain, combined with smart contracts, has both challenges and opportunities for the real estate sector. On the one hand, it may improve procedures, allow EU transactions and the interconnection between public administration. However, to not reduce parties rights, this blockchain should have some special features, such as the possibility of being amended. Originality/value – This paper provides a valuable overview of all the intermediaries that could be affected by blockchain protocols. It is of interest of blockchain developers, public administrations and researchers who are working on blockchain and property conveyancing.