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Namal College Mianwali

Final Year Project Proposal

Project Title: Smart-Rental-Solution

Supervisor: Ambreen Hanif

Co-Supervisor: Adil Azeem
Name: Muhammad Shoaib Ahmed
UoB: 14031195
Email: shoaib2014@namal.edu.pk
Synopsis:

The project aims to convert the conventional property rental (one of the most common contract)
into smart contracts under Ethereum based blockchain technology enforcing the negotiation and
performance.

Problem Under Observation:

According to 2015’s European Union survey, every 4 out of 10 people lived in a rental apartment.
Similarly, around the globe, a large number of people live in rented houses or apartments. Finding a
rental property is much of hassle, Innovation in online business brought some solution to market like
Zameen.com which are mostly being run by agents. So Marketplace is controlled by third party,
dismissing the direct connection between tenants and the owners. Agents get a sufficient
commission from both sides for just getting the deal done. Ignorance of law at time of agreement
also cause problems for both tenants and owner afterwards. It does not ends here. Once deal is
done and both the tenant and the owner have agreed upon some conditions, still that agreement is
not properly enforced.

Some owners do not regularly raise their rent to match the cost of owning and maintaining the
property and after some years they suddenly increase upto 25% which is a lot of increase for many
tenants. On the other hand if you are owner and you rented out some property, things will go well
with tenants for first few months because they paid you deposit and rent for first month rent upfront.
But after few months you might be getting rent late or sometimes not getting rent at all.

Getting security deposit back which tenants pay at time of renting the apartment/house is also a big
problem. According to a poll conducted by rent.com for Americans revealed that more than 1 in
every 4 tenants did not get their security deposit back because of whatever reason.

Possible Solution:

Blockchain is a new revolution in computer science which was originally introduced by Satoshi
Nakamoto. Blockchain is a digitized public database which is decentralized i.e not owned by any
central authority rather it exists on all the peers(known as miners) connected to Network. Constantly
growing blocks of data are recorded and added to the ledger in chronological order once it is verified
by more than 50% of peers. Once a new block is added to ledger it is automatically downloaded to
each peer. This database is not immutable whose proof is given in paper presented by Satoshi
Nakamoto.

Smart-contract is a self-executing digital-contract which can execute some operation on basis of

some conditions specified at time of creation of contract. Smart-contract is one good solution to
above described problems.

The idea is to put an IoT based electronic lock on the main entrance of the house/apartment to be
rent out which will be controlled by a mobile application. There will be a Portal where owners can put
advertisement for renting out their apartments/house and people looking for them can view and
approach them. When the owner wants to rent out his/her property he/she creates a smart-contract
between him and the tenant which removes the dependency of the agent. This contract will contain a
standard template of agreement according to rental law for people who are not aware of rental laws.
This template will be modifiable to add/remove or change any clause(s). After both have agreed to
some conditions the agreement is initiated. Once agreement is initiated, on date mentioned in
agreement agreed amount of money is automatically transferred from tenant’s account to owner’s
account and for next month lock can be only opened by tenant and not by owner or anyone else.
Increase in rent occur only according to the fixed percentage agreed at time of contract creation.
After the month is passed and tenant has no money left in his account to pay to owner, the lock can
be only opened by the owner. Once the validation period of contract is completed the deposit money
is transferred to the account of tenant without permission of owner.

Technologies/Concepts to be Used:

● Angular with Nativescript

For application front end.
● Django Framework
For Application Backend.
● Ethereum Smart-Contract API
For contract creation between the two parties.
● Blockchain
For keeping contracts decentralize, immutable.

References:
1: "Bitcoin: A Peer-to-Peer Electronic Cash System - Bitcoin.org." https://bitcoin.org/bitcoin.pdf.
Accessed 30 Sep. 2017.

2: "Rental Horror Stories: Renters Who Pay Late or Don't Pay at All...."
https://www.rentalutions.com/education/articles/rental-horror-stories-renters-who-pay-late-or-dont-pay-at-
all. Accessed 30 Sep. 2017.

3: "What to Do When Your Landlord Raises the Rent - Rentec Direct." 12 Aug. 2016,
https://www.rentecdirect.com/blog/landlord-raises-the-rent/. Accessed 30 Sep. 2017.

4:"Housing statistics - Statistics Explained - European Commission."

http://ec.europa.eu/eurostat/statistics-explained/index.php/Housing_statistics. Accessed 30 Sep. 2017.

5:"Blockchain Definition | Investopedia." http://www.investopedia.com/terms/b/blockchain.asp. Accessed

30 Sep. 2017.

6: "What Are Smart Contracts? A Beginner's Guide to Smart ... - Blockgeeks." 16 Sep. 2017,
https://blockgeeks.com/guides/smart-contracts/. Accessed 30 Sep. 2017.