• Blockchain Solutions for Real Estate

FAQ

Trusken wants to make buying and selling of Real estate as easy and convenient as any other asset class like gold, equity, FD’s etc. Buying Real Estate is a big decision due to it being chunky. A large sum of money is required for each purchase. This reduces the benefit of diversifications. Once a buyer purchases a Real Estate, it is very difficult for him to sell instantaneously in case of a dire need of money.
Trusken will utilise blockchain frameworks for this. Property records will be securely stored on distributed ledgers. Trusken will create a mechanism to achieve consensus on the veracity of the records. Smart contracts will be used to facilitate transactions. Option to tokenise Real Estate Assets is being introduced. All this is aimed at making real estate more liquid.
TBlockchain allows counterparties to trust each other without the need of a central authority. It is the “distributed trust network that the internet never had but always wanted” (Tapscott and Tapscott, 2016).

Blockchain is most closely associated with its first (very) successful use case – Bitcoins. It would however be short-sighted to limit the power of ‘the technology’ blockchain only to one of its ‘use cases viz. crypto currencies’. Without any reference or requirement of digital currencies, blockchain has potential across a range of industries and use cases.

The same trust frameworks on which a currency (having a valuation of over 150 billion US$) with no controlling authority was created is now being deployed by Trusken for bringing liquidity to Real Estate.
The Indian Government is very supportive of Blockchain. The Government of India and 14 Indian State Governments are themselves implementing blockchain pilots. This includes projects in Real Estate.

There is some ambiguity around regulations around “cryptocurrencies” which the government and judiciary is still resolving. Trusken has nothing to do with cryptocurrencies. We are only utilising some of the frameworks of the technology “blockchain” to bring liquidity and trust to Real Estate.
Blockchain today is often compared to what the internet was in 1994. At that point in time, internet enthusiasts, who used to claim that internet can be used to order groceries were not believed. Today it is a reality. The Internet has democratised information. Blockchain democratises trust and will lead to massive economic gains. Let us try and elaborate.

Economic activity primarily consists of production and consumption of goods and services. In between is the marketplace or exchange. An efficient marketplace of goods or services needs the following.

1. Intermediaries: Third parties that bring in trust (like traders, brokers, regulatory authorities, banks, surveyors, appraisers, law firms etc...)
2. Records of Assets / service transactions: for accounting and book keeping (on ledgers)
3. Terms and conditions to effect the transaction: written or verbal (on contracts)
Blockchains with “distributed ledgers” and “smart contracts” facilitate transactions between untrusted parties while simplifying the required involvement of intermediaries and government authorities. This helps accelerate the digital economy.

At present, trade is encumbered by a market system that has a massive trust deficit. It needs a colossal network of trust building third-party intermediaries, including brokers, financial institutions, law firms, regulatory bodies, etc… Bitcoin, as the first use case of blockchain technology, has given us a glimpse of a future of trade without bottlenecks created by intermediaries. The same technology can be applied to a host of use cases including Real Estate.
Intermediaries like Real Estate brokers, banks, law firms, regulatory bodies have a very important role for smooth transactions. At Trusken, we believe that a practical and workable system will benefit greatly from the continued involvement of these intermediaries. However, we intend to create a framework which will greatly enhance the process efficiency of the whole system. A faster throughput of transactions will save time and costs for everyone enabling a reduction in fees while helping everyone make more revenues overall. At Trusken, we wish to co-opt all the existing players and support them to serve the customers in a better manner.
Real Estate is the largest global asset class with a value in excess of US $ 217 trillion. To contrast and for perspective, the total value of Gold ever mined is only ~ US $ 8 trillion. The valuation of total equity in the world is estimated at ~ US $ 80 trillion. Imagine the benefits to society and commerce; if the value inherent in Real Estate could be unlocked and made more tradeable. Blockchain offers that promise.

Real Estate has traditionally been an opaque industry in India. RERA and Demonetisation has brought about deep structural changes in the functioning of this industry. However, the core problem of messy transactions remains with iterative negotiations, title defect rectification and distrust amongst counter parties. This results in Real Estate remaining an investment class which is highly illiquid. Blockchain; a new technology can help make this investment class liquid and easy to transact.
To create a decentralised ledger solution for Real Estate, we would need the involvement of most of the private and government players. We are confident that this will eventually happen but it will take some time. In the meanwhile, we wish to start by using some of the frameworks of blockchain to start gearing the system. Some of the key benefits of blockchain are immutability, digital ledgers, smart contracts and tokenisation. Trusken believes in creating tangible value for customers right from day one for the spends they incur and efforts they invest.

Not many Purist blockchain applications have been successful. They lack the scale which comes from widespread adoption. It is a chicken and egg conundrum which requires tactical intervention. Today, Trusken may not adhere to a purist’s conceptualisation of blockchain. However, we intend to start introducing parts of the blockchain frameworks that can provide tangible benefits today to build traction. We are confident that as adoption increases, we will eventually reach to a point where we can transition to harness the full power of blockchain. We believe that sustainable success can only be achieved by creating value at each stage of the journey towards the ultimate goal.
1. Ease for Buyers to shortlist the property of their choice using innovative Trusken Tools like digital site visits on demand, escrow payments, document verifications, digital document sharing for mortgage approvals etc..

2. Ease for Sellers to list their properties on exclusive trust portals, live showcase their projects to customers in remote geographies, get offers instantaneously, negotiations and deal closure in real time basis on a blockchain backed platform, collect customers advances in escrow backed by smart contracts

3. Ease for Banks / Loan Providers to access a credible pool of loan seekers, easy availability of credible information required to make a quote, online onboarding of customers, access to all documents from seller and buyer through the Trusken Platform etc.

4. Ease for Investors: Increase Liquidity through creation of fractional investment opportunities through “Asset Tokenisation”

5. Ease of Transactions: Transaction Ease by the use of online “Smart Contracts” and “Escrow Accounts”. Buyers and sellers can definitely conclude transactions completely online. Brokers can claim their commissions seamlessly.

6. Document Management through title and approvals on Secure distributed Ledgers

7. Digital Keys that completely secure your information through 2FA (two factor authentication)

8. Bridge the Trust Gap between stakeholders like developers, government and buyers etc. through the embedded verification mechanism.
While technology has permeated the records in the Real Estate sector due to RERA and digitisation efforts of the government, this has been implemented in bits and pieces on disparate databases. Consensus is a way to bring in transparency through the cross referencing of the records and certifying that the same entry is present in the multiple databases. Credible private service providers and entities like law firms, brokers, mortgage providers, building societies etc. can also be roped in to bolster the consensus framework. Blockchain technology is not a magic solution: information must be organized and digitized for blockchain to work.
How does Trusken help sellers increase sales? Trusken brings transparency and liquidity to Real Estate by the use of Blockchain frameworks. Currently sales in Real Estate are slow due to a loss of trust amongst buyers. Any solution that increases trust will both increase the rate of sale of inventory and also the value of such properties. By the introduction of latest technology solutions creating trust, Trusken facilitates the transition of the entire buying process online. This results in faster buying process with more number of participants. The attractiveness of a real estate investment market to investors is closely related to transparency. Countries that are ranked high in transparency rankings attract 75% of the total amount of Real Estate investments in the world.
Innovative Trusken Tools like digital site visits on demand, escrow payments, document verifications, digital document sharing for mortgage approvals etc.. enable the buyer to purchase the property of their choice quickly. The transparency helps buyers make a decision faster. The buyer enjoys peace of mind.
The key solutions Trusken is introducing to bring in Transparency are

1. Digital Records
2. Personal Digital keys (2FA)
3. Digital Site Visits
4. Additional Document Upload
5. Document Sharing
6. Real Time Updates
The key solutions Trusken is introducing to bring in Liquidity are

1. Online Terms Finalisation
2. Smart Contracts
3. Escrow Accounts
4. Reduced Transaction Time
5. Loan facilitation
6. Reduced Forex Risks
7. Wider Options
8. Reduced Information Asymmetry
Trusken provides an on demand robust storage and access infrastructure to its customers. This is available on the go through mobile and web.

Initially Trusken is storing all the records on secure S3 cloud storage of Amazon. All uploads and downloads will be recorded on blockchain. Later on; when the system matures, the system will transition to Hyper Ledger Fabric on the Blockchain with multiple nodes.
One of the biggest concerns of digital records is security. In addition to digital passwords, Trusken is using the latest 2FA (Two Factor Authentication) Digital Hard Keys to ensure that only authorised users can access the relevant documents.

Trusken has a provision of issuing a physical Digital Key which fits into a USB port of the device from which the user wishes to access the Trusken Portal. The provision of biometric secure access is also available.

Thus in addition to a password, the user can further secure his account by enabling the Digital Keys without which the portal will not allow access to the records.
Real Estate Developers will be provided an option of enabling the Remote Site Visit functionality from Trusken. Prospective buyers and others can e-visit their shortlisted properties anytime from anywhere.

Each Real Estate developers will be provided a seamless digital link which can be shared with prospective and current buyers. On clicking the link from any internet enabled mobile or computer, an instant direct video link will be established between the customer and the site / marketing office.

This will enable the customer to track the real time status of his property at his convenience from a remote location. The Real estate developer can create a governance structure of his choice around the scheduling of such site visits at his convenience and manpower availability.
This link can also be used to establish a video hotline between prospective customers at a remote location and the sales representatives who can then handle the transaction face2face for faster and more successful closure of deals.
Trusken allows property owners to streamline and update all their important property related papers in one place in a secure manner.

Trusken allows sellers to upload all pertinent documents available on the property on the secure Trusken Platform.

Buyers can upload additional documents (like Identity, property tax payments etc.) which will be only visible to them. This helps organise the records.
Sellers and property owners can update the property records with any status changes which would be visible to buyers instantaneously.

Uploads and downloads can be done multiple times. Alert notifications can be generated whenever a new record is uploaded. This allows sharing of information on a real time basis.

All access trails will be recorded on the immutable blockchain and can be audited by authorised permissioned users who own the data.
Using the Trusken platform, authorised stakeholders can instantaneously share the documents with permissioned third parties creating transparency.

Trusken customers can allow access to people they wish to share these documents with (like buyers, prospects loan providers etc.)

It also allows buyers and other authorised permissioned access to the documents.

When buyers become sellers, the same platform is extendable to share the documents with selected prospective buyers.
Trusken uses a proprietary blockchain backed tool that securely and instantaneously allows terms negotiation and agreements. This is a web and internet enabled application available on the go.
This allows sellers, buyers and brokers a digital platform to conduct negotiations and discussions online to conclude the transactions.

All communications are recorded on the immutable blockchain hence there is no scope for any misunderstanding or confusion.

The output of this exercise is the clarification of terms on the basis of which a Smart Contract can be created for concluding the transaction.

This digital innovation will go a long way in enabling remote deal making without requiring the buyer, seller or broker to travel physically when not required.
Trusken enables the use of rule based online contracts that will allow buyers and sellers determine the conditions of the transactions. Smart contracts self-execute transaction processes and can therefore shorten the settlement period. Use of a blockchain framework can prevent injustice such as unauthorized data manipulation and alteration.
Trusken enables deals through Escrow accounts.

Once the deal terms are negotiated between the buyer and the seller, interested buyers can pay advances into a secure Escrow Account.

This will enable them access to property details and allow them to block the property for a certain time period as agreed between the buyer and the seller.

On achieving on pre-agreed milestones, the smart contract initiates payments to seller. In case the deal fails, the amounts are refunded to buyer and seller as per terms agreed upon.
By the use of various tools of Trusken, the time taken for due diligence will be substantially shortened. This will reduce the time for deal conclusion creating liquidity.
One of the biggest impediments to a speedy and smooth loan or mortgage application is the absence of requisite papers.

The query raising and resolution process is also broken with most loan processing agents and loan seekers complaining about the inordinate time and effort required.

The Trusken platform allows the onboarding of loan providers into the ecosystem and they can map themselves to buyers / seller’s accounts through a secure process.

Using the real time document sharing functionality of Trusken, the buyers can quickly and easily obtain loans to fund their purchase.

Since the time taken for making a deal is shortened, currency risk associated with overseas investments will be mitigated.
Trusken eliminates the barriers of distance and distrust.

Hence buyers, sellers and brokers can easily deal with each remotely and even conclude transactions and payments.

Buyers and Sellers will have wider options as they will be able to reach out to a larger network not constrained by geography.
By making use of technology, we can create an environment where both the buyer and seller can share information transparently. Blockchain frameworks build trustworthiness. Hence information asymmetry is reduced allowing all stakeholders to make a real estate transaction with peace of mind. This will result in higher sales and faster transactions.
Trusken brings in liquidity to Real Estate by increasing the speed of the due diligence and transaction process. By introducing property tokenisation, Trusken will enable the investors to invest fractionally in properties of their choice.
Trusken tools will enable Real Estate Brokers to close deals faster and online. Since the buyers have a relationship of trust with their brokers, this will enable them to conclude the transaction through the broker online itself. The brokers will be able to fully participate in Trusken’s smart negotiation module and help push the deal forward to a successful completion. Trusken has made a provision in the smart contracts and escrow mechanisms to protect the commissions of the brokers.
Trusken believes in creating solutions that solve the problem of customers today. In addition, they will also lead the customer to a path of incremental gains as he adopts more of the modules over time. Each of the module is envisaged to be both standalone solutions to pressing problems yet can be combined to become holistic solution. Trusken offers the following modules

1. Module 1 – Document Management for Real Estate Stakeholders

2. Module 2 – Smart Listing for Real Estate Sellers

3. Module 3 – Remote Site Visit Facilitation

4. Module 4 – Smart Deal Negotiation on Blockchain

5. Module 5 – Online Smart Contracts

6. Module 6 – Deal closure through online Escrow mechanism

7. Module 7 – Asset Tokenisation to facilitate fractional investments

The founders of Trusken have worked in the Real Estate Industry for decades. The experience has been that at times property transactions get delayed if not derailed due to lack of some or the other document. If all the records are maintained in a systematic manner, it will go a long way in seamless transactions. The ultimate goal of Trusken, which is online “Smart Contract” empowered transactions and “Tokenisation” can never be achieved if the paperwork is not first put in order and digitalised.
Trusken aims to digitalise Property Documentation. Every property has a large number of appurtenant records. This helps establish the right of the owner to use or sell the property. Records have traditionally been stored in paper formats. These can be tampered with, necessitating the use of notary services to certify the validity of signatures and authenticity of documents. Trusken plans to use Distributed Ledgers to store, share and verify these records.
A distributed ledger also called a shared ledger or distributed ledger technology (DLT) is a consensus of replicated, shared, and synchronized digital data geographically spread across multiple sites, countries, or institutions. A peer-to-peer network is required as well as consensus algorithms to ensure replication across nodes is undertaken. Distributed ledger design can be either public or private (permissioned).

Trusken is utilising the broad framework of permissioned DLT to ensure that consensus can be built on provenance of records. The distributed ledger would be automatically updated and accessible for all participants who have the requisite authority and permissions.
Initially Trusken is Targeting new projects. Most document pertaining to these projects are available with the developer. Real Estate developers are currently sharing these documents with buyers on a CD or on a pen drive or even on e-mails.

Trusken has created a portal where Real Estate Developers can easily (yet securely) upload the documents pertaining to each Flat to individual buyers account. From here the buyer can access his documents on the go through his smart phone or through a computer.

Later on the buyers can upload additional documents like property tax payment receipts etc. which gets generated frequently. When the buyer becomes a seller, he has full systematic record of all papers in one place making it convenient for a transaction.
Real Estate approvals and documents are not generated all at one go. As the project development milestones are achieved, a number of additional important documents are generated. The Trusken platform enables multiple uploads and downloads securely tracked on the blockchain.
The Trusken Platform also has a feature where the authorised holder of the document (either seller or buyer) can further share the documents with requestors like home loan providers, insurance companies etc. Again, all document access trail is tracked on the blockchain. This enables a control and check on the circulation of documents which is not possible in the existing hardcopy / CD sharing mode
A requestor is anybody who requires a copy of the property record. This could be for reasons like issuing loans, checking the provenance of the property before purchase etc. The record owner can give access to particular records to parties of his choice through the Trusken Platform. Document access trail is tracked on the blockchain.

The process of tracking down all historical records pertaining to a property (e.g., permits, deeds) would be simplified and consolidated so that any interested and authorized party could see all relevant information in one place at the click of a button. However, all document access will be tracked on the blockchain and the source of any misuse easily identified.
Trusken allows Real Estate developers who avail its Document Management module to systematically list their ongoing projects onto an exclusive listing platform.

Only projects whose documentation is uploaded will be able to list. Once listed these projects will be exposed to brokers and customers who can use Trusken’s online tools to quickly conclude transactions.

Sellers, buyers and brokers all will benefit from faster transactions enabled by Trusken.

Trusken will enable Increased sales for credible developers by listing properties on its Blockchain Platform

• It will consolidate the data of credible properties which are amenable to online due diligence.

• It will speed up the search process for buyers and brokers interested in faster deal throughput.

• Due-diligence for the buyers would be paperless and predominantly online.

• Availability of trustworthy real-time data increases the buyer’s propensity to invest and speeds up the buyer’s decision-making process.
Real Estate Developers will be provided an option of enabling the Remote Site Visit functionality from Trusken. Prospective buyers and others can e-visit their shortlisted properties any time from anywhere.

Each Real Estate developer will be provided a seamless digital link which can be shared with prospective and current buyers. On clicking the link from any internet enabled mobile or computer, an instant direct video link will be established between the customer and the site / marketing office.

This will enable the customer to track the real time status of his property at his convenience from a remote location. The Real estate developer can create a governance structure of his choice around the scheduling of such site visits at his convenience and manpower availability.

This link can also be used to establish a video hotline between prospective customers at a remote location and the sales representatives who can then handle the transaction face2face for faster and more successful closure of deals.
Trusken uses a proprietary blockchain backed tool that securely and instantaneously allows terms negotiation and agreements. This is a web and internet enabled application available on the go.
This allows sellers, buyers and brokers a digital platform to conduct negotiations and discussions online to conclude the transactions.

All communications are recorded on the immutable blockchain hence there is no scope for any misunderstanding or confusion. The output of this exercise is the clarification of terms on the basis of which a Smart Contract can be created for concluding the transaction.

This digital innovation will go a long way in enabling remote deal making without requiring the buyer, seller or broker to travel physically when not required.
Trusken enables the use of rule based online contracts that will allow buyers and sellers determine the conditions of the transactions. Smart contracts self-execute transaction processes and can therefore shorten the settlement period. Use of a blockchain framework can prevent injustice such as unauthorized data manipulation and alteration.
Smart Contracts are self fulfilling agreements that get executed the moment pre-agreed milestones are achieved. Many real estate transactions have conditional clauses and can be executed through smart contracts. For instance, the conclusion of a purchase-sale transaction could be dependent on loan approvals or title clearances. The previously agree upon protocol is the sole arbiter of the transaction. Thus, the transaction can be carried out transparently, free of conflict, and without expensive and time-consuming middlemen.

In the context of real estate, a smart contract effectively serves as an automated and immutable escrow officer. The escrow officer releases funds upon the occurrence of certain conditions according to previously agreed upon instructions. Once the parties agree to the conditions and turn those conditions into code in the blockchain, the satisfaction of those conditions would automatically trigger release of funds and transfer of the deed.

Smart contracts were first conceptualised by computer scientist Nick Szabo in 1997. He described the use of e-commerce protocols to establish contracts between untrusted parties on the Internet. “A smart contract is a set of promises, specified in digital form, including protocols within which the parties perform on these promises”. Using blockchain technology, smart contracts can ensure that all participants know the contract terms which are then executed automatically when specific conditions are met.
Trusken enables deals through Escrow accounts. Once the deal terms are negotiated between the buyer and the seller, Interested buyers can pay advances into an secure Escrow Account.

This will enable them access to property details and allow them to block the property for a certain time period as agreed between the buyer and the seller.

On achieving on pre-agreed milestones, the smart contract initiates payments to seller. In case the deal fails, the amounts are refunded to buyer and seller as per terms agreed upon.

Trusken brings in liquidity to Real Estate by increasing the speed of the due diligence and transaction process. By introducing property tokenisation, Trusken enables the investors to invest fractionally in properties of their choice.
Historically, investment in Real Estate could only be done by buying the whole property under single / joint ownership. This made real estate invest chunky with only full value to be paid upfront. Joint ownership route usually consisted of family members due to lack of trust. The system of enabling trust amongst multiple owners was missing. Tokenisation is a method to facilitate partial ownerships by multiple investors who may not know each other.

Tokens are digital representations of a physical assets and can be used to verify the asset’s authenticity. Using the immutable property of blockchain technologies, tokenisation contains information of the property like ownership, asset details, maps, surveys, legal & approval status, leases and financial position.

Property title can be converted into a token that can be easily tracked, and also used as collateral in mortgage transactions.
Recently REIT (Real Estate Investment Trusts) have been touted as a way to invest in a pool of assets managed by large Corporate REIT Manager. While REIT’s are a welcome step in creating more investment options in Real Estate at a lower entry point, the decision on which property should be bought or sold and its timing is not available to the investor. There are also high management costs associated. Investments are usually in commercial properties with high rental yields which may not be tax efficient for all investors.

Tokenisation is an important alternative method to make Real Estate more Liquid and investible. The laws around this are evolving and once they stabilise, this will become a ubiquitous tool. Many fractional investment platforms are already successfully implementing this albeit without blockchain. Tokenisation will give wings to all these endeavours.