On the 23rd July, the Sumitomo Corporation announced its partnership with blockchain firm bitFlyer for a home rental contract platform. The Tokyo based companies aim to digitize real estate contracts on a blockchain, allowing the rental process to take place entirely on a smartphone.
In Japan, it is more common for potential renters to meet their landlord face to face before any agreement takes place. Much of the administration is paper-based, often faxed and posted to many parties, including intermediate property managers and guarantors along with renters and landlords.
The blockchain as a service arm of bitFlyer has joined forces with Sumitomo, one of the world’s largest trading and logistics companies, to tackle these issues with smart contracts.
Digitizing contracts on a blockchain allows for secure and tamper-proof storage in one shared space. Furthermore, it creates a single source of trust, as smart contracts give a transparent and immutable record of responsibility. The project will also save time and costs in printing, mailing, and storing documents digitally.
The firms aim to present a complete rental service on a single app, from the initial property search to contracting and even post move-in admin. They claim to have developed separate systems for renters, landlords, and intermediaries for their respective smart contract roles.
“You can contract without a stamp, and it will be a world where everything from browsing to contract is completed with your smartphone. You just need to live by paying the rent,” Yuzo Kano, MD of bitFlyer Blockchain told CNET.
Sumitomo and bitFlyer plan to complete their prototype by the end of 2019 before releasing it to the public. They also want to expand into real estate sales and even general contracting, such as in the insurance industry.
Indeed, using blockchain for property mortgages is already happening. Some national land registries, notably the UK with R3’s Corda platform, have used the technology to digitize housing sales.
In May, the Enterprise Ethereum Alliance published a paper on how blockchain could be utilized in the real estate sector, focusing on tokenization, sales, and insurance. It looks like Sumitomo and bitFlyer are some of the first to aim at the rental industry rather than sales, unlike a Hong Kong project and a successful test by firms U.K. including Clifford Chance and Barclays.