Trusted timestamping of schedules to a contract

In many European jurisdictions, it is common for landlords and tenants to inspect the property prior to the start of the tenancy in order to document the condition of the leased premises. This way, arguments at the end of the tenancy over whether or not any damage to the property was caused by the tenant can be avoided. Such pre-tenancy inspection is often supported by photographs of the leased premises, certainly so if the report of the pre-tenancy inspection is drawn up by a real estate expert. A paper copy of the report would then be attached to the tenancy agreement as a schedule.

In such cases, i.e., where digital documents are attached to a contract as a schedule, it would make sense to attach them to the contract in digital form, rather than in paper form. This way, loss of quality can be avoided, and the schedule will be easier to verify in case a dispute would arise. If, for instance, there would be a crack in one of the walls of the leased premises, digital photographs (which can be enlarged) will offer greater verifiability than paper copies of the photographs in determining whether or not such crack was there prior to the start of the tenancy.

If the photographs are attached to the contract in digital form, on a USB stick for instance, it is of course essential that they cannot be tampered with (e.g., ‘photoshopped’). Although such tampering would cause the landlord’s version and the tenant’s version of the photographs to differ from one another, it cannot reliably be determined which party has engaged in the tampering.

A convenient and secure solution to this problem would be to time-stamp the photographs using a blockchain. Many online service-providers offer trusted time-stamping services, either for a subscription fee, a one-time fee, or free of charge. One free variant with a user-friendly interface is OriginStamp. This website works as follows. First, OriginStamp hashes your file using the cryptographic hash function SHA256. The hash is immediately published on twitter. Next, it collects the hashes of all files received from all users over the course of a day and hashes these hashes together using SHA256 to form one single hash. The latter hash is then used to generate a Bitcoin address. Finally, once a day, the smallest possible amount of Bitcoin is sent to the Bitcoin address so generated. This way of working enables secure and reliable verification that an exact version of a particular file was submitted on a particular time and date. Any amendments to the file, however small, will be immediately detected, as the amended file will generate a hash that is different from the hash of the original document.

Turning back to our tenancy hypothesis, the landlord and the tenant could compress the photographs taken during the pre-tenancy inspection into a .zip-file and submit the .zip-file to OriginStamp.  The resulting hash could then be included in the execution version of the tenancy agreement. After execution of the contract, each of the parties receives a copy of the agreement, which includes the hash of the photographs taken, and a USB stick containing the photographs. If a dispute would arise afterwards, and one of the photographs serves to support a claim, it can be easily demonstrated that such photograph is the original and unaltered photograph.

Sweden enters second phase of its blockchain land registry project

Sweden is studying the possibilities of using blockchains as a technical solution for real estate transactions. Kairos Future, one of the parties working on the project, has prepared an interesting report, which provides insight in the thought process and the choices made.

Links: Full report | CoinDesk article