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Rentals and commercial leases are stuck in the dinosaur era while interruptions occur in other areas.
Paper copies of rental contracts are still signed and maintained by owners and their tenants, while manual spreadsheets are used to monitor leases and transactions.
These traditional methods of transaction are paved with challenges for landowners. Fortunately for the commercial property market, blockchain technology, used primarily in the cryptocurrency transaction, can be used as a digital smart contract, revolutionizing the way landlords and tenants deal with.
<h2 class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "1. Painful documentation processes "data-reactid =" 27 ">1. Painful documentation processes
Traditional commercial property leasing processes require much documentation. Between you and the landlord, there are lawyers, guarantors, agents, financial institutions and other necessary to verify and safeguard every transaction.
The moment you engage your agent with the interest in leasing a property, start your paper trail. Then it goes through various parts, with forward and backward amendments, additions and cleansed versions with each new iteration of the contract.
With digital contracts, these processes and paperwork are greatly reduced.
Signature collection can be performed almost instantly online. Once the main stakeholder is verified and signed, countersigners can be notified and collected in the right way.
<h2 class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "2. Need for internal checks"data-reactid =" 32 ">2. Need for internal checks
The manual process of leasing transactions opens up opportunities for fraud; the more involved the more the possibilities are. Internal and external audits, multi-level approvals and corporate governance procedures are needed to minimize theft and instil trust. These processes lead to bureaucratic swelling and inefficiencies.
Using artificial intelligence, discrepancies can be quickly identified for immediate ratification by the parties involved.
<h2 class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "3. Risks for privacy and security"data-reactid =" 35 ">3. Risks for privacy and security
The use of Excel spreadsheets to record data makes it vulnerable to data attacks by third parties. Last year's Singhealth database violation is a great example of how manual processes offer little or no security. With the Blockchain cryptographic security system that requires the use of a public and private key, your data is secure and immutable.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Read also: 4 good reasons why commercial properties should use blockchain"data-reactid =" 37 ">Read also: 4 good reasons why commercial properties should use blockchain
<h2 class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "4. Inefficient manual monitoring"data-reactid =" 38 ">4. Inefficient manual monitoring
The current real estate leasing, monitoring and booking systems are often recorded manually on Excel spreadsheets. This is both time and boring when records need to be tracked and verified. This also places unnecessary administration
burdens on the staff responsible for inserting entries in the Excel sheet and creating non-productive work hours.
During the application of the blockchain, commercial real estate companies can now eliminate painful documentation processes as contracts will now be traded online with a system for monitoring the actions of each interested party. Risk of privacy and security will be greatly reduced due to the characteristics of Blockchain.
<h2 class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "5. Hostile environment and space"data-reactid =" 42 ">5. Hostile environment and space
The large amount of documents that follow a leasing transaction is not very green – many trees should be sacrificed. With that large number of documents, it also means that you need substantial storage space to accommodate all these documents. This translates into a waste of space that could be used for commercially viable businesses.
Needless to say, if these transactions are made online, you can save tons of paper. While the storage space can then be repurposed for commercial use.
<h2 class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "6. High intermediate costs"data-reactid =" 45 ">6. High intermediate costs
Leasing a commercial space in a traditional way does not only involve the lessee and the lessor. There may be many parties involved, such as lawyers, guarantors, financial institutions, courier companies, and more. Collectively, such third party fees and brokers could inflate the actual business cost for both the landlord and the tenant.
Because platforms that use blockchain technology to create smart contracts usually behave like an agent. High administrative commissions and commissions will be eliminated, saving the real estate companies unnecessary expenses that can improve their final result.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Read also: Because proptech and real estate technology will be important in Asia"data-reactid =" 48 ">Read also: Because proptech and real estate technology will be important in Asia
The time between the start of a lease transaction and its completion may be long. With the intermediation of several intermediaries, in addition to the time necessary for the display and approval of contracts up and down the corporate hierarchy of each organization, it may take 2 or 3 weeks for approval and the approval of a contract.
This excludes the transport time needed to deliver the physical copies of the contract back and forth between the different parts.
By carrying out online transactions, all these inefficiencies will disappear magically. It's as simple as the sign, check, confirm. It's like running an online check-in online before you
travel. Improve the experience between landlord and tenant by reducing the need for unnecessary waiting times.
<h2 class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "8. Expensive to manage short-term leases"data-reactid =" 58 ">8. Expensive to manage short-term leases
The tendency of tenants who rely only on short-term leases makes the process of managing tedious and laborious leasing. Manual records should be documented frequently, in addition to the need to incur intermediary fees regardless of the size of the lease.
Smart platforms for digital contracts are independent of the size of the leasing contract. The cost and time required for the transaction are the same for 1-month leases, as well as ten-year leases. It means convenience without imposing heavy brokerage fees.
<h2 class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "9. Tentious Due Diligence Tenant"data-reactid =" 61 ">9. Tentious Due Diligence Tenant
Evaluating potential tenants and tenants is a painful necessity. Failure to ascertain creditworthiness may result in potential risks such as default by tenants on payments or having on board tenants with bad experience.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Read also: (Infographics) 16 industries that blockchain is interrupting"data-reactid =" 63 ">Read also: (Infographics) 16 industries that blockchain is interrupting
<h2 class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "10. Research costs inefficient tenants"data-reactid =" 64 ">10. Research costs inefficient tenants
Finally, the commercialization of available commercial spaces is archaic, cumbersome and expensive. Property owners must list their spaces on multiple online and offline media, incurring marketing and advertising expenses.
It is surprising that it took so long before the industry took a digital approach to their commercial real estate leasing. Like airlines, commercial property should adopt a direct booking or inquiry approach due to the simple fact that you can see cost savings when you make a transaction directly with the owner. There are not many plug and play solutions out there to help owners easily market their space and there should be more, much more.
<h2 class = "canvas-text canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Trace the path to follow"data-reactid =" 67 ">Trace the path to follow
Thanks to the advent of blockchain, smart contracts and cryptocurrency tokens, commercial real estate owners and managers can now create a new path to take.
Offering more security, near real-time approvals, trust-free audits and frictionless transactions, blockchain-based systems can transform the way commercial leases occur.
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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Photos of & nbsp;Sandro Katalina& Nbsp; & nbsp;Unsplash"data-reactid =" 72 "> Photo by Sandro Katalina on Unsplash
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