In a world first, the Real Estate Institute of Queensland (REIQ) has announced plans to deliver digital residential tenancy agreements.
The proptech initiative will see residential tenancy agreements executed as digital smart contracts by the end of the year.
“All parties will have visibility over the contract at any time from the palm of their hand, says REIQ General Manager Josh Callaghan.
“By executing as a smart contract, we’re also able to build out the functionality to handle payments of bond and rent plus facilitate other activities related to the property such as routine inspections and maintenance.
The REIQ has partnered with Queensland based technology firm Igloo to produce the digital residential tenancy agreements, available via the Institute’s Realworks form generation software.
“Since the inception of smart contracts, their application to real estate contracts seemed obvious to me. We were very fortunate to discover an Australian based startup that also shared that vision,” says Callaghan.
Igloo founder and CEO Jeremy Hastings says the partnership represented a marriage of opportunity.
“As a startup, we knew that our world-leading technology could vastly improve the way that people are connected with property, but we needed an established partner to take it to market,” he reveals.
“The REIQ not only had the most widely used forms product in the state, it was also open to challenging the status quo – an essential element for working with us to drive value back into the tenancy process.”
The smart contracts will use blockchain technology to ensure simple and secure transactions that leverage the benefits of the technology as an irrefutable source of truth.
“Most people have heard about blockchain in the context of Bitcoin, which is somewhat unfortunate as the technology has applications for every sector. Smart contracts, in particular, are clearly the way of the future in a form of law that has relied on a hand-written signature for literally thousands of years,” says Callaghan.
“At its simplest, a smart contract is a digital contract that can live beyond its initial execution by facilitating transactions and giving all parties a central record of what has happened during the tenancy.”
Not only does the initiative benefit from the implementation of new technology, but it also provides a platform for the unparalleled real-time collection of rental prices and trends. Such a platform is considered long overdue in the Australian market.
“The instant a tenancy agreement is signed, we will know how much a property was rented for, how long the agreement is for, how long it was vacant and so on, which will give the REIQ unprecedented insights into rental market trends as it happens,” says Callaghan.
“This new level of property market visibility will make Queensland one of the most attractive property investment destinations in the world.”
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