Block Chain Technology: Smart Contract Application in the Real Estate Industry in Kenya

International Journal of Research and Scientific Innovation (IJRSI) | Volume VII, Issue VIII, August 2020 | ISSN 2321–2705

Block Chain Technology: Smart Contract Application in the Real Estate Industry in Kenya

Jedidah Wanjagi¹, Olanrewaju Isola Fatoki, PhD^2
1Department of Economics, Accounting and Finance, Jomo Kenyatta University of Agriculture and Technology, Nairobi, Kenya
²Department of Accounting, Finance and Economic, School of Business, KCA University, Nairobi, Kenya

Abstract: Block chain is widely known as the underlying technology powering bitcoin. However, with the wide usage of technology, the block chain based smart contracts are being used to serve a wide range of data set such as financing, purchasing, leasing, sale and management of property transactions. This research embarked on determining the applicability of smart contract in the real estate industry. The researcher explored the usage of smart contract in management of property, purchasing, leasing and sales. Data was collected using secondary data from different articles and journals. From the findings revealed that, the real estate industry is transforming fast and there is need to have all the data in one place to reduce cases of fraud and simplify the title deed record process. Smart contract eases the lack of trust between the buyer and seller since with block chain, data is more transparent and there is accurate record keeping. It also provides an opportunity for auto-confirmation by the land registries and enhances transparency. It was further revealed that with smart contracts, several entitles can modify the database including tenants, owners, investors and lenders. Recommendations indicate the real estate industry should adopt block chain due to its usefulness and ability to create a difference in the industry.

Keywords: Block chain, smart contract, real estate.

I. INTRODUCTION

The real estate sector is a key economic development sector that builds our country, Kenya. However, it is seriously being affected by incidences of corruption, theft and fraud which pull the economy down. One of the key reasons includes the wrong recording of land transactions by government organizations in certain areas. In order to correct this, we need to have accurate data recording of the property values such that, all parties are aware of all prices and sizes, which is where smart contract through block chain comes into perspective.

Blockchain is a digital peer-to-peer network that allows transactions between two parties without the need for an intermediary (Swan, 2015). Block chain is a global distributed ledger allowing transactions within seconds globally, with minimal application fee. The technology reduces use of brokers in the real estate industry (Ngo, 2016). The most commendable feature is that it can assist in avoiding cases of theft in the real estate industry. It uses an open ledger system where a form of identity to and from which the transactions are done is recorded in the form of a code.

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