• The legal situation makes it complicated to introduce such a program – in Sweden as in Germany
• Experts can imagine a temporary solution for the near future
Platform from Sweden: Digital operations can save €100 million per year
Buying a home via the blockchain in a few days instead of several months – this is made possible by a project that started in Sweden in 2017: Swedes can buy and sell real estate in a very short time using a specially created platform based on a private blockchain. The platform allows all the entities involved to control the process. According to the information portal GodmodeTrader, select users such as banks or the Swedish Land Registry Lantmäteriet can easily approve transactions. Expect savings through digital operations of approximately €100 million annually. Could a blockchain solution be also interesting to Germany?
Digital land registration is a good idea – but the legal situation is an obstacle
Experts say: In theory, blockchain-based land registration isn’t a bad idea – but in highly regulated Germany it’s hard to make it legally possible. It is conceivable to create land registry entries in the form of NFTs, but the legal status has not been clarified even for NFTs. So before entire homes can be acquired as NFTs, it is essential to fill in ownership gaps, according to GodmodeTrader. Apart from that, it is well established in law that a notary office must be involved in real estate transactions to get the certificate (section 311b BGB) – buyers are also given detailed advice at the notary’s office informing them of potential defects arising from the transaction. It’s not easy to dispense with in Germany, Timothy Becker of the Berlin technology agency Turbine Kreuzberg Haufe told.
A spokesperson for the Swedish authority confirmed to GodmodeTrader that due to the legal situation, the digital land registry is rarely used in Sweden and “never integrated into the land registry production system”. It must be emphasized that the problem was not with the technology, but with the legal situation.
Experts see no way to rule out going to a notary’s office
According to Becker, a blockchain-based land registry could work as follows: “For each property, a unique entry in the form of an NFT (non-fungible token) is generated on the blockchain. Whoever holds the token is the owner of the property. If a token is allocated to whomever is token Transferring it to other owners, the ownership structure will be changed in a verifiable way.” Haufe writes that estates with a large number of individual terms are specifically destined for decentralized land registration. As well as Professor Dr. Maximilian Zimmer, a notary and emeritus professor of business law at Harz University of Applied Sciences in Wernigerode, thinks a temporary solution is the best in Germany given the legal situation. This means: Blockchain Yes, but not without a notary.
However, as long as the legal status surrounding the issue of NFTs remains unclear, a temporary solution will remain a thing of the future.
Blockchain-based real estate tokens already exist
However, what is already there are investment tokens (also: real estate tokens), which can be used to invest in financing buildings and then receive regular dividends. In addition, the Electronic Securities Entry Act (eWpG) was passed in 2021, which represents another step towards integrating blockchain into various investment areas.
finanzen.net editorial office
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