Implications for commercial real estate
Ohio has opened the door to blockchain-based business transactions. On August 3, Gov. John Kasich signed Ohio S.B. 220, which for the first time acknowledges the legitimacy and enforceability of blockchain transactions and creates an affirmative defense to tort actions against certain eligible businesses for claims relating to data breaches. To be eligible for the affirmative defense, a business must have adopted a cybersecurity program that reasonably conforms to the requirements of the law. The Ohio law modifies the statutory definitions of “electronic record” and “electronic signature” to include references to blockchain technology.
By legally recognizing blockchain data in approving the measure, the Ohio Legislature gives the green light for recognizing blockchain along with other electronic transactions. Other states that have approved blockchain legislation include Colorado, Delaware and Illinois.
“The private sector already is investing in blockchain. So what this bill does is give certainty to any transactions you’re engaging in in Ohio … in case there was any question about that.” – Ohio State. Sen. Matt Dolan
What is a Blockchain?
A blockchain is a continuously growing list of records – commonly called blocks. The core of blockchain is a record of transactions, like a traditional ledger. However, the blockchain ledger is a continually updated, transparent, fixed and distributed record of transactions on a peer-to-peer network. Blockchain software has the capability for smart contracts and securely recording records.
Until recently, blockchain was known as the technology powering bitcoin. However, numerous industries have begun exploring Blockchain based applications for their business. These applications include: smart contracts, property rights, medical records, supply chain management and many others.
For those in the commercial real estate industry, smart contracts mean that every step of a sale or lease deal is automated, from validating loan eligibility to making payments 24/7. In other words, contracts can be initiated, authenticated and audited in real time anywhere in the world without the need of a middleman.
Read related e-book: Blockchain Primer — Preparing for the Next Phase of Digital Growth
Blockchain is revolutionizing commercial real estate by its potential to expedite deals through rapid transactions. Because every transaction can be verified by anyone using the system, it provides enhanced transparency while protecting user privacy.
So what does this mean going forward? Some advocates want to make Northeast Ohio a leader for blockchain-related research. At the very least, Ohio now will recognize smart contracts as legally enforceable as any other contract would be.
Blockchain smart contracts are beginning to be adopted by real estate executives for purchasing, sales, leasing and financing. To determine whether blockchain makes sense for your company, consider the importance of transparency, the need for more streamlined transactions and reduced risk.
Questions about whether blockchain could increase efficiencies for your company? Please call Dennis Murphy 440-449-6800 or email Dennis.