This will prevent land title records from being exposed to fraud and human errors, says expert
by AFIQ AZIZ / pic by HUSSEIN SHAHARUDDIN
BLOCKCHAIN is the way forward to solve land and property registration issues, including fraudulent transactions in the country.
SysCode Sdn Bhd CEO Reza Ismail said the distributed ledger technology — which was invented to support the bitcoin cryptocurrency — could help the authorities in keeping, retrieving, safeguarding and maintaining the integrity of data in the ecosystem.
The blockchain expert said the use of the smart contracts application would prevent land title records from being exposed to fraud and human errors.
“Traditionally, keeping track of landowners involve mountains of hand-signed documents which makes managing land titles susceptible to forgeries and simple clerical errors.
“On the other hand, using the smart contracts application will integrate land registry transactions in one system and make it more difficult for data to be forged,” he told The Malaysian Reserve (TMR) in a phone interview recently.
Last year, two fraud cases related to the property industry were reported — namely the RM200 million real estate loss involving the Federal Land Development Authority and the RM9 million land purchase in Gombak and Hulu Langat, Selangor — which saw 150 people fall victim.
In 2010, police had warned the public over the rising number of property fraud cases, with 37 reports lodged to the force in the first three months of the year.
Reza explained that smart contracts are computer programmes which facilitate, verify and enforce the negotiation or execution of an agreement.
“The main goal of the smart contracts is to enable two anonymous parties to trade and do business with. It is usually done over the Internet with no middlemen needed,” he added.
He said for example, in a land transaction process, both the seller and buyer will enter into a digital contract within the blockchain.
“The process will be witnessed and approved by the appointed legal entities, such as the government authorities, or a lawyer through a multi-signature transaction environment.
“Then, the blockchain will store the digital signatures in the transaction, which will encrypt the digital copy of the land title. As such, no parties can amend any information of the land without the original participants’ agreement,” he said.
Reza added that the transaction would be concluded within seconds or in a minute, depending on the design of the blockchain “consensus cycle”.
Recently, the Housing and Local Government Ministry (KPKT) had announced that it is working to develop a comprehensive land database in order to aid first-time house buyers in owning a property.
KPKT Deputy Minister Datuk Raja Kamarul Bahrin Shah Raja Ahmad said the database, slated to be completed next year, will include transactions and property ownership data which will become a reference for property developers in improvising their supply plan.
As of now, he said the systems in maintaining the records are not properly managed and had caused difficulties to the ministry, especially in determining genuine first-time house buyers.
“What we have to do is to get all the data together under one system so that it will be easier to be retrieved and ensure that affordable homes could only be awarded to first-time buyers,” he told TMR at the 4th Smart Cities Asia 2018 conference in Kuala Lumpur (KL) recently.
He said the ministry has already engaged with technology providers, including those from overseas, to study the most suitable system for that purpose.
While the government is still contemplating to decide on the approach, Reza suggested that Malaysia should look into how developed countries are moving in this sector.
“In Sweden, its land authority, which is called Lantmateriet, has been experimenting
on a way to record property transactions on the blockchain since 2016.
“It is also estimated that the project could save the Swedish taxpayers over €100 million (RM477 million) a year by eliminating paperwork, reducing fraud and speeding up transactions,” he said.
Reza said the country has already achieved its proof-of-concept for land registry in the blockchain platform recently.
Meanwhile, CyberSecurity Malaysia CEO Datuk Dr Amirudin Abdul Wahab concurred that the government should explore blockchain technology elements in managing land registry.
He said the blockchain would have lesser data integrity issues as every transaction — including removals, reversals or additions — would stay on the record forever.
He added that confidentiality, integrity and availability of data aspects would be fulfilled by adopting the blockchain.
“Users could define each data confidentiality level so that there will be no unauthorised access to certain information.
“The system could also be shared to the public for their convenience and make it more accessible, depending on the authorisation level,” he said at the event.