Velox, a blockchain technology provider, will provide the technology that will furnish better information on vacant Chicago buildings to prevent fraudulent conveyance. A pilot program will test compatibility among distributed ledgers and the client-server database model.
John Mirkovic, deputy recorder of deeds for communication and IT for the county’s recorder of deeds office, said the office sees blockchain technology as the next generation land records system. The office is anxious to partner with a group interested in applying the technology to “real world” situations.
A blockchain-based public record will be a starting point for someone creating a public land record from scratch, Mirkovic said.
Velox software will help the county test how blockchain can improve its mission to simplify recording, reduce fraud and minimize costs to residents, said Ragnar Lifthrasir, company CEO and the founder of the International Blockchain Real Estate Association (IBREA).
The recorder of deeds office maintains its own land records management system and has its own IT staff. The office is elected and operates separately from the Cook County Government.
The office, having its own IT operation and enjoying support of Karen A. Yarbrough, recorder of deeds, has explored the next generation of land record databases and ways taxpayers can securely store any data they seek in an unhackable internal records structure.
The office has determined three features that make distributed ledgers and blockchain viable options: 1) the record is immutable, permanent and immune to nation state attacks; 2) it offers a path to paperless land transfers, and 3) it reduces costs for counties nationwide to move to electronic document processing.
Such features can make transactions more secure and seamless, while making real estate more liquid.
The county is taking a big first step in bringing the transfer and ownership of real estate to the modern era, according to Lewis Cohen, a partner at the Hogan Lowells law firm in New York, which is providing legal advice to the project.
Armour Settlement Services LLC, a nationwide real estate title firm that manages thousands of transactions annually, will assist with cross compatibility testing. The firm will also spearhead the consolidation of disparate property data across the county.
Tali Raphaely, president of the Armour Settlement Services, said the effort will create an immutable database and minimize the chances that property owners and investors will spend funds on properties that can’t be conveyed or occupied.
Based on the pilot program’s results, IBREA could advocate changes to laws in the state that will lead to a blockchain public record, Lifthrasir said.
Images from iStock and Cook County.