In Virginia, Using Blockchain-Like Tech for Land Records

Land titles need to be stored for as long as the land lasts, and they need to be stored securely. They represent major investments. This is why the title insurance industry exists.

Title fraud is one of the big threats to the integrity of our land records. Criminals who can forge titles and get past the title insurers can steal and sell property. Real estate professionals need to know about the technology that can identify fraud vectors, and repel the bad actors. So, can technology offer “smart” land records?

A smart land record system would keep any and all title activities on one, transparent ledger, potentially for the duration of the title’s existence. The idea is more than “disruptive.” It makes sense.

Did Amazon Web Services (AWS) Develop a Database That’s Perfect for Property Titles?

Rural Virginia might seem an unlikely testing ground for smart land records, but Wise County is putting land titles on a blockchain-like ledger.

What does blockchain-like mean? Wise County’s system is not a decentralized ledger like the blockchain we associate with bitcoin. It’s a private real estate title recordkeeping system. But the model for it is the blockchain ledger.

The Virginia-based tech company Bloqable is collaborating with the county to establish the system of indelible entries; and it’s using Amazon Web Services’ secure Quantum Ledger Database. Using AWS makes the system inexpensive as well as reliable. More than 1,200 Wise County titles were in the system by mid-summer 2022.

Jack Kennedy, the county clerk, says a small, rural county with just 16,644 residences is actually a perfect sample for such a project.

Wise County’s Unique System Could Become a Role Model. Could It Also Make Title Insurance Obsolete?

The Wise County records project would automate title abstracting, too. What’s title abstracting?

The classic title abstract is used in the proof of a property’s marketability. It traces the title back in time — over the course of 40 years, in Virginia. A trained abstractor researches and summarizes the title records and certifies their authenticity and completeness.

Normally, tracing a title four decades back would take an abstractor about three hours. But the new digital system would use machine learning to do some of the work.

Could a system like this make abstractor companies unnecessary? It would certainly cut down on the work for humans. And if it gets to the point where we could replace title insurance, then everyday home purchases will be cheaper and quicker. A blockchain-like system would allow us to know, without doubt, how a title has been conveyed through time. Overcoming a title’s vulnerability to confusion, fraud, or accidental errors and omissions would be a huge step forward.

But of all the use cases for blockchain-stored land titles, the best would be in places with missing records, corruption in the registries, or a lot of heirship properties (homes passed down in family circles without official deeds). If Wise County succeeds in reconstructing the chains of title in real estate with tangled histories, it will point to a model in which many people could receive benefits — literally.

Notably, the Wise County deed recorder can write a new entry over a previous error with this new system. The corrected deed shows up first in the search, but the historical chain can still be reviewed.

What’s Ahead? Are Deed Recorders in Other Counties Adopting Blockchain Title Record Systems?  

The Wise County land records project is not the first to experiment with blockchain-inspired tools. We’ve reported on Cook County, Illinois. Cook County ran a pilot project, but didn’t adopt blockchain as its official system.

“At the end of the pilot,” a Congressional report stated, “the Cook County Recorder of Deeds did not undertake large-scale conversions to blockchain due to office consolidations.”

Cook County deed recorder Edward M. Moody did note the fraud-busting power of the technology. Moody explained that inserting false title records on the blockchain is nearly impossible, because every action presses a unique digital fingerprint on the chain.

And as Wise County’s efforts indicate, the story of the blockchain title record continues.

Supporting References

Rob Pegoraro for This Virginia County Is Trying to Use Blockchain-Like Tech to Store Land Titles (Jul. 6, 2022). The Real Estate Deal, Decluttered: Blockchain and Deed Recording (Jan. 28, 2019)

And as linked.

Photo credit: Tima Miroshnichenko, via Pexels.