Saturday, December 4

Real estate blockchain could help the Spanish Registry, but not replace it

Key facts:
  • Registrars in Spain warn that a real estate blockchain would not replace their function.

  • They claim that it would remove red tape and facilitate access to building data.

Different government representatives of Spain affirm that blockchain platforms cannot replace the legal accreditation of the Registry. This technology would only facilitate access to building data by digitizing the real estate register, which is currently handwritten in books.

The theme was presented by the Registrars of Spain in a conference during the third Blockchain Economy conference Thursday, October 25. The meeting, which lasted around five hours, took place on the graduate campus of the University of Navarra in Madrid.

During the conference, the College of Registrars of Spain reported that it has been investigating with blockchains for more than four years. José María de Pablos O’Mullony, the director of the Information Systems sector of the organization, he questioned current policies that require a paper record of buildings to be kept.

O’Mullony said publicly: “Why not replace the partner book of companies with an electronic one in the Commercial Registry, on blockchain?” He warns that the application of this technology “would eliminate bureaucratic obstacles”, both for “companies, neighborhood communities or construction.”

However, Jesús Sieira Gil, the Property and Commercial Registrar at the Palma de Mallorca Registry, implies that not everything is solved with a blockchain. Although it extends its support for the adoption of this technology at the national level, it warns that these platforms have certain limitations.

The official explains that there is no possibility for the system to work fully automatically. There must be human control.

On this matter, it is important to clarify that a blockchain does not guarantee infallibility of the data. If the information that is entered in the registry is false (either maliciously or by mistake), it will be thus registered on the platform.

Sieira said that “you cannot give a legality check automatically.” The Registry will have to access the blockchain, under the technical requirements determined by law. That is, transferring a real estate token from one wallet to another is not valid without the intervention of the Registry, such as a home tokenized in NFT, for example.

The entity specifies that “registering a sale in the Registry is the only way to automatically prove ownership of the property to third parties, according to Spanish regulation.”

Blockchains will not replace the legalization function that the Spanish Registry has

So far, it is necessary to submit a construction book for each building with all its data in the Spanish Registry. Although the entity states that not all surrender and many are lost, for which a blockchain would guarantee the registration of the relevant records updated through tokenization.

It also points out that a tokenization of property titles could be done. On this, Jesús Sieira Gil, the Property and Commercial Registrar at the Palma de Mallorca Registry, warned that “real estate blockchain platforms will not replace the property registry.” They would not give the legal security of the Spanish Registry. Simply they would facilitate their access.

Likewise, the purchase of a token in a financed way would be allowed in exchange for a future promised return. In this way, the tokenization platforms of movable or real estate assets would represent the right over an object. This is something that deepens the announcement of adoption of this technology made by the Registrars of Spain a month ago, as reported by CriptoNoticias.