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2020 | Book | 1. edition

Disruptive Technology, Legal Innovation, and the Future of Real Estate

Editors: Amnon Lehavi, Ronit Levine-Schnur

Publisher: Springer International Publishing

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About this book

This book addresses challenges that new technologies and the big data revolution pose to existing regulatory and legal frameworks. The volume discusses issues such as blockchain and its implications for property transactions and taxes, three (or four) dimensional title registration, land use and urban planning in the age of big data, and the future of property rights in light of these changes. The book brings together an interdisciplinary collection of chapters that revolve around the potential influence of disruptive technologies on existing legal norms and the future development of real estate markets.

The book is divided into five parts. Part I presents a survey of the current available research on blockchain and real estate. Part II provides a background on property law for the volume, grounding it in fundamental theory. Part III discusses the changing landscapes of property rights while Part IV debates the potential effects of blockchain on land registration. Finally the book concludes with Part V, which is devoted to new technological applications relevant to real estate.

Providing an interdisciplinary perspective on emerging technologies that have the potential to disrupt the real estate industry and the regulation of it, this book will appeal to a broad audience, consisting of scholars, policy-makers, practitioners, and students, interested in real estate, law, economics, blockchain, and technology policy.

Table of Contents

Frontmatter

Literature Survey

Frontmatter
A Database Exploring Blockchain and Real Estate
Abstract
The Foundation for International Blockchain and Real Estate Expertise (FIBREE) was founded in Amsterdam in 2018 with the aim of bringing together real estate professionals and blockchain specialists from all over the world to exchange expertise. FIBREE is aware of the current hype about blockchain technology, which does not always contribute to getting to know it better. FIBREE’s mission is to help create a realistic expectation pattern that will allow the real estate market, step by step, to discover and exploit the true potential of blockchain technology. By bringing together the expertise of pioneers in this field and sharing knowledge and insights already gained, FIBREE wants to make an important contribution to the adoption and implementation of this technology in the real estate market in the coming years. This article provides an overview and analysis of all relevant scientific publications in the Netherlands, and does so within a context of a first small international exploration of international research, experts and products.
Jan Veuger

Theoretical Aspects

Frontmatter
From Blackstone to Blockchain: Theorizing Property Law in the Age of Cryptography
Abstract
In this concise introductory contribution I ask how blockchain technology has already and how it will in the future effect the basic underpinnings of property law theory. The chapter presents three main features of a blockchain cryptographic technique, and in addition, three features of property rights as acknowledged by the famous work of William Blackstone of the eighteenth century. The potential interaction between these features is briefly discussed.
Ronit Levine-Schnur
Prospects of Blockchain in Contract and Property
Abstract
Recurrent difficulties are delaying, if not killing off, what for the time being are still modest applications of blockchain. This chapter identifies what value this new technology adds to the contractual and property processes, exploring its potential and analyzing the main difficulties it is facing. Paying particular attention to the distinction between contract (personal or in personam) rights and property (real or in rem) rights, it first examines the difficulties for trading contract rights through blockchain-based applications, mainly those to complete contracts ex ante without relying on third-party enforcers. Second, it explores the difficulties faced by blockchain to enable trade in property rights.
Benito Arruñada

Changing Landscapes of Property Rights

Frontmatter
The Future of Property Rights: Digital Technology in the Real World
Abstract
Digital technology can open new frontiers in the formation, registration, and enforcement of property rights in land. This chapter explores the prospects—but also the limits—of digital technology in streamlining efficient land use and land markets. In particular, it asks whether the digital production and dissemination of information can enhance a more optimal use of land, such as by the three-dimensional (3D) delineation of real estate into distinct segments and specific rights thereto, including for subsurface infrastructure, or by the digital pooling of non-adjacent assets for purposes such as creating collective security interests in them. This chapter shows that while aligning the digital production of information with a corresponding system of “legal volumes” and 3D zoning regulation can innovate land markets, the growing multiplicity of property rights in multi-layered tracts faces a genuine collective action problem, having both commons and anticommons features. Digital technology should thus be matched with a legal reform on the institutional governance of multiple uses and interests in and across tracts, somewhat like in the case of condominiums.
Amnon Lehavi
Social Innovation as a Disruptor of Tenure: Recognising Land Rights of Slum Dwellers in Odisha, India
Abstract
Ownership of much land globally is formally unrecorded. Advances in geospatial and drone technologies are enabling unmapped land to be recorded in ways which do not reflect traditional surveys, and introduce new ways of achieving cadastral data for the purposes of registration. Disruption is challenging established land law, and creating novel opportunities for individual land certification—rattling indefeasibility and tenure. The chapter looks to Odisha, India, as a case study, to raise systemic problems around urbanization and affordable housing, and how social innovation has been a lever for aligning slum owners with land ownership. We explore an understanding of the nature of social innovation, and how it has spurred legal innovation for land rights in Odisha. Given the global proliferation of urban informal settlements, understanding catalysts for disruption into land law/lore offers learnings for comparative jurisdictions as they address their own complex challenges in the formalization of settlements, thus contributing to global progress in achieving the Sustainable Development Goal of ‘leaving no one behind’.
Rebecca Leshinsky, Serene Ho, Pranab Choudhury

Land Registration and Blockchain

Frontmatter
Blockchain-Based Land Registers: A Law-and-Economics Perspective
Abstract
Both land registration and blockchains pursue the production of immutable information. Land registration is hence among the most often suggested use cases of the blockchain technology. However, only a very small number of successful large-scale applications exist in the wild. This chapter aims at explaining why this number is so low despite blockchain’s prima facie suitability for land registration. After laying technical and legal foundations, we argue that trading shares of real estate investment funds on a blockchain has little to do with land registration. This allows us to concentrate on the benefits that the blockchain technology may provide for land registration in a proper sense. We show that “anchoring” land registers in public blockchains by regularly writing hash values of their content in one or several of those blockchains can overcome lack of trust in the immutability of digitized land registers without affecting the latter’s rules and organization. In contrast, implementing the entire land registration system on a blockchain and change rules and governance accordingly may result in high efficiency and effectiveness. This may be a big leap forward for many jurisdictions. In jurisdictions with already well-functioning land registration systems, the gain from a transition to the blockchain technology tends to be small for both deeds recordation and title registration systems, in fact often too small to justify the costs of transition. The major reason is that many inevitable links between real-estate reality to its blockchain representation require human decisions to balance the diverging interests of affected parties.
Georg von Wangenheim
Land Registration in the Twenty-First Century: Blockchain Land Registers from a Civil Law Perspective
Abstract
Few things seem so opposite to each other as the highly innovative blockchain technology and the ancient land registration sector, in which one traditionally feels thrown back into the pre-digital era. However, for some believers this unlikely pair might be on its way to form one of the world’s new power couples. This contribution aims at analyzing blockchain technology in land registration matters from a material legal point of view. First, some blockchain land registration initiatives are discussed. Second, the possibilities of blockchain technology for land registration are evaluated on the basis of two variables: the lacunar or complete nature of a land register and its negative or positive nature. In doing so, Belgian, French and German law will be taken into account, offering a thorough civil law perspective on the matter.
Benjamin Verheye

New Technological Applications

Frontmatter
Selling LAND in Decentraland: The Regime of Non-fungible Tokens on the Ethereum Blockchain Under the Digital Content Directive
Abstract
Rewind to the early 1990s: an infant World Wide Web recently created by Tim Berners-Lee was starting to redefine the way people were connected globally. First came communication services (e.g. e-mail) and a shift from physical to digital marketplaces (e.g. ecommerce). Then came the rise of Internet platforms, in what is now deemed to be Web 2.0. The critics of Web 2.0 claim it is a spoiled version of early Internet promises: freedom from surveillance, online safety (even through anonymity)—in a nutshell, more control and power for the user. The answer to the problems of Web 2.0 is thought to be the third era of the Internet, namely the Decentralized Internet, based on (among others) blockchain technology. While a lot of literature has focused on the legal implications of blockchain assets such as cryptocurrencies from a banking perspective, not the same can be said about the consumer protection angle necessary in tackling the hype that has affected users who spent valuable financial resources on investing, playing on or using blockchain-based platforms. This chapter aims to make a contribution to fill this research gap, and focus on Decentraland, a virtual world where LAND, a non-fungible token is traded in order to allow users to build their own spaces on these plots. In doing so, the chapter elaborates on the notion of Internet of Value, and looks at the inner workins of Decentraland from the perspective of European law, more specifically the Digital Content Directive.
Catalina Goanta
Application of a Systems Engineering Approach as a Preventative Measure Against Disruptions to Real Estate Institutions
Abstract
As technology changes at an exponential rate, business and development industries must prioritize investments to be prepared for disruptive technologies. Within the real estate industry, the influence of new technologies is readily apparent in areas such as design and construction with Building Information Modeling (BIM), the incorporation of smart and sustainable/energy efficient systems into new buildings, and a shared economy approach to space use (e.g. AirBnB). However, there is an extensive network of critical interrelated institutions connected to real estate that is often overlooked, making the effects of disruption less transparent in the context of the larger system. This chapter will emphasize the complexity of the system that supports real property and its relevance for infrastructure, humanitarian, and market interests. The chapter will then propose a systems engineering approach as the appropriate lens through which to view the “real estate system” to ensure projects are holistically envisioned and disruptions can be anticipated.
C. Kat Grimsley, Cody A. Pennetti
Backmatter
Metadata
Title
Disruptive Technology, Legal Innovation, and the Future of Real Estate
Editors
Amnon Lehavi
Ronit Levine-Schnur
Copyright Year
2020
Publisher
Springer International Publishing
Electronic ISBN
978-3-030-52387-9
Print ISBN
978-3-030-52386-2
DOI
https://doi.org/10.1007/978-3-030-52387-9

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