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PROPERTY DIGITAL RIGHTS
Technological advances over the past ten years have been astounding. Among these developments has emerged a new asset class, Property Digital Rights (PDRs), thereby opening up a new market stream for those in property management.
It is estimated that almost two billion people use augmented reality, increasing its revenue incrementally. Therefore, it bodes well that property owners use said platforms well through their properties’ advertising, marketing and planned usage.
That being said, it is challenging to situate such rights within a traditional category, further adding to the complexities of competently legislating this sector.
What are PDRs?
Digital assets allow for creating, publishing, utilising and distributing specially assigned rights. PDRs are predominantly associated with intangible assets that property owners use to monetise and protect their property in the metaverse, such as on AR and VR platforms. They are registrable or indeed licensable; therefore, for a consumer or a third party to utilise the property on such platforms, they must seek permission or otherwise face criminal sanctions.
Further, the licences stemming from ownership are amenable according to the individual needs of landlords; for example, ‘you can select any restrictions or content preferences that should apply to your property to ensure the advertisements or other digital content meet your requirements and preserve the reputation and prestige of your property’.
Societal and legal impact
The critical advantage of PDRs is that landlords and property managers retain absolute control over their property with PDR licensing and could, same as with other digital assets (owing to their flexible nature):
- Manage maintenance schedules and the procurement of contractors, as well as better control their property portfolio.
- Manage rental licensing arrangements based on the individual needs of their tenants whilst also certifying there is total adherence to legislative requirements, such as GDPR and the remediation of defective premises, and energy efficiency management.
- Have complete autonomy over the adherence to GDPR requirements.
- Market their property adequately by conducting virtual property tours, for example.
However, PDRs are a complex subject matter. Although recognised by common law, the sector is inadequately legislated, translating into potentially unfettered opportunities for criminal activities. Property owners are left at significant risk compared to when the legislative measures for tangible assets are considered.
Also, AR and VR platforms are situated in a mixed-reality space. Whilst there is some cross-over between legislation for the physical world and that of the metaverse, the lack of specific statutory measures is worrying. For instance, immersive advertising in the metaverse, which calls for tight controls, doesn’t contain copyright, regulatory or contractual restrictions, and this leaves tenants at a disadvantage as landlords could withhold permissions deemed contrary to good service.
As such, there needs to be a bespoke yet comprehensive legal framework for this fast-developing class of assets to guarantee the complete protection of property owners, managers, and consumers. These potential pitfalls have led to industry experts calling for the government to halt potential catastrophes swiftly. For instance, the UK Jurisdiction Taskforce has recommended that there be a panel of experts to guide courts on ‘complex legal issues relating to digital assets’ and that the legislature must confirm ‘that a thing will not be deprived of legal status as an object of property rights merely by reason of the fact that it is neither “a thing in action” nor “a thing in possession”.
Ideally, the government must adopt and establish a permission-based approach when appropriately legislating for this sector. Doing so ensures that all those involved in such property transactions remain protected. Intellectual property and property lawyers will experience profound changes within their complex industries, as the government will likely heed the urgent call to action.
