To initiate the land acquisition process, the user establishes an account on one of these exchanges and then the

user
navigates to the metaverse platform where the land purchase will occur and adheres to the established procedures.
Further, the trading of virtual land parcels within the metaverse leverages smart contracts which are self-executing
programs inscribed on the blockchain. These contracts are secure and immutable transactions and upon completion of a
purchase the ownership of the virtual land is conveyed through an NFT. This NFT which is analogous to a real-world deed
is stored within the user's crypto wallet

In essence, while traditional title deeds serve as legal documentation of ownership for physical property NFTs function as
digital certificates containing metadata that uniquely identifies the virtual asset they represent. Decentraland's current
smart contract infrastructure empowers users to engage in land purchases, sales, and leasing agreements all conducted
using the platform's native token

Celebrity ownership further inflates virtual land value, replicating the star power effect observed in the physical world. An
example is the $450,000 purchase of a virtual estate in Snoopverse (Snoop Dogg's Sandbox domain)

One of the core strengths of metaverse land ownership lies in the blockchain's decentralized nature as purchased records
are stored on this distributed ledger, making them tamper-proof and resistant to unauthorized modification. This ensures
that ownership remains firmly in the hands of the purchaser represented by a unique NFT stored securely within their
crypto wallet. These NFTs (digital deeds of ownership) require the owner's wallet password for any transfer of virtual
assets like apartments, clothing, or other digital goods. However, despite the seemingly strict security measures offered by
blockchain the legal landscape surrounding virtual property ownership remains muddled

the regime applicable to virtual immovable property should resemble the regulatory framework applicable to physical real
estate. The individual who invests money in the acquisition or rental of virtual land would acquire rights akin to those of an
owner or tenant. The developer, on the other hand, would retain their intellectual property rights over the specific program
code. There are some factors that favor the consideration of virtual land as authentic real estate. One of them is its
inherent lack of portability, thus establishing a crucial distinction from other digital assets. Another factor is location. As in
real life, the location of these lands and buildings is a crucial factor in determining their value. Contrary to the ephemeral
nature of certain virtual objects, virtual land in the metaverse anchors its existence to a specific location, which in turn
entails significant legal and economic implications. This geographical fixation establishes the basis for arguing that, like in
the physical world, the possession and ownership of virtual land are subject to spatial and geographical considerations.
Size, proximity to popular hot spots, or whether the property is next to a road are factors that accordingly influence the
value of virtual real estate.37 As an interesting aside in support of considering virtual land as real estate, even indigenous
communities have raised their voices, demanding participation in land distribution in the metaverse to prevent the
repetition of past injustices.
Essentially, the ownership of all assets purchased from metaverse platforms is governed by the platform's user license
agreement, not property law. Hence,the validity of the regulations regarding immovable properties such as land and
houses purchased in the real world are not valid in the metaverse. Users have limited rights with the terms of use and
terms of service of the relevant platform after the land purchase, and these rules are considered legally binding
documents. For example, it reserves the right to limit and terminate the right to use and access land and other digital
assets purchased on Sandbox and most other metaverse platforms. In other words, platforms can only access digital
assets for a certain period. In such a case, a user with a $100,000 digital painting can be banned from the platform the
next day, and his NFT has no value and no function.

In the real estate sector, some regulatory steps are needed by the regulatory authorities in the field of smart contracts.
Because today, smart contracts created for the sale and lease of land envisage regulations in limited areas such as
monetary obligations and term limitations. For areas other than these regulations, no legal protection model is foreseen in
most platforms. In one of these gray areas, if the property owners lease their land; An example would be what happens if
the lessee establishes a business or takes action that reduces the value of the land. In such a case, it is expected that the
provisions that automatically eliminate the activities or actions of the tenant will be provided by smart contracts or
additional contracts. In addition, the establishment of contractual relations with property owners who are adjacent to each
other to manage the use of property in similar areas will also be on the agenda. Again, the case of lenders offering
cryptocurrency loans for virtual real estate also needs to be considered. If the borrower defaults by not being able to pay
his debt, some actions should be taken. For example, it is envisaged that smart contracts will be coded so that the
metaverse user who receives the loan is unable to make payments in the stipulated terms and that the rights and
authorizations arising from the ownership of the NFT can be automatically transferred to the company extending the loan,
with the execution of the warning procedures.

1. How is ownership of virtual land actually proven or demonstrated in the metaverse?

Ownership of virtual land is proven through NFTs (Non-Fungible Tokens) stored in a person's crypto wallet. Think of an NFT as a digital
deed or certificate that contains specific information about that piece of virtual land.
When someone buys virtual land, the transaction is recorded on a blockchain - which is like a digital ledger that can't be changed or
tampered with. This blockchain record shows who owns what land, when they bought it, and for how much.
The owner controls their virtual land by having the private keys (basically a secure password) to their crypto wallet where the NFT is
stored. Without these keys, no one else can transfer or sell the virtual property.
When other users visit the metaverse platform, they can see who owns which plots of land because this ownership information is visible
to everyone. The NFT proves ownership similar to how a deed proves you own a house in the real world, except it's entirely digital.
2. What happens to someone's virtual property if the platform hosting it shuts down?
This is actually one of the biggest risks of virtual property ownership. If a platform shuts down, the virtual land within it could become
worthless, regardless of how much someone paid for it.
Unlike physical property that exists independently of any company, virtual land only exists within the platform that hosts it. This means
your ownership is only meaningful as long as that platform continues to operate.
Some platforms are trying to address this by using decentralized systems where the virtual world could potentially continue even if the
original company disappears. However, this is still a developing area.
The platform's terms of service usually specify what happens in case of shutdown, but typically there's no guarantee or compensation
for virtual landowners. This highlights why virtual property has fundamentally different risks than physical property, and why we need
specific laws to address these unique vulnerabilities.
3. How might property tax work for virtual real estate?
Property tax for virtual real estate is a fascinating question that governments are just beginning to consider. Several approaches might
work:
Value-Based Taxation: Similar to physical property tax, governments could tax virtual land based on its market value. This would require
methods to accurately assess the value of virtual properties, perhaps based on recent sales of similar properties.
Transaction Taxes: Instead of annual property taxes, governments might tax only when virtual land is bought or sold, similar to stamp
duty on real estate transactions.
Platform-Based Fees: Governments could require metaverse platforms to collect and remit taxes based on the virtual land within their
worlds.
Income-Based Approach: If someone earns money from their virtual property (by renting it or running a business), governments might
focus on taxing this income rather than the property itself.
The challenge is creating a fair system that doesn't stifle innovation while still recognizing that virtual properties can represent
significant economic value. Currently, most countries don't have specific tax frameworks for virtual property, but this will likely change as
these assets become more mainstream.
4. Can you explain more about how smart contracts work in virtual property transactions?
Smart contracts are self-executing programs stored on a blockchain that automatically carry out actions when certain conditions are
met. For virtual property, they work like this:

Automated Transfers: When a buyer pays for virtual land, the smart contract automatically transfers the NFT (representing ownership)
to the buyer's wallet without needing a middleman.
Defined Rules: The smart contract contains all the terms of the sale - price, what's being sold, and any special conditions.
Permanent Record: Once executed, the smart contract transaction is recorded on the blockchain, creating a permanent, tamper-proof
record of the sale.
Beyond Simple Sales: Smart contracts can handle more complex arrangements too. For example, they can automatically collect rental
payments for virtual land and terminate access if payments stop.

Currently, most smart contracts for virtual land handle basic aspects like transferring ownership and processing payments. However,
they have limitations - they don't yet address many complex situations that might arise, like disputes with neighbors or property
damage.
As virtual property becomes more sophisticated, we'll likely see more complex smart contracts that can handle a wider range of
situations, potentially even connecting to real-world legal enforcement mechanisms.
5. What rights do virtual property owners actually have compared to real-world property owners?
Virtual property owners have significantly fewer rights than real-world property owners:
Platform Dependency: Virtual property rights exist only within the platform's ecosystem and are governed by the terms of service, which
can change at any time. Real property rights are protected by law regardless of any private company.
Revocable Access: Most platforms reserve the right to terminate user accounts or change access to virtual assets. In contrast, no one
can typically take away your physical property without legal proceedings.
Limited Control: Virtual property owners often can't fully modify their property however they want - they're limited by the platform's
features and rules. Real property owners generally have broader rights to use their land (subject to zoning laws).
No Governmental Protection: Real property rights are protected by government systems like land registries and courts. Virtual property
typically has no such institutional protection.
Uncertain Longevity: Virtual property exists only as long as the platform supporting it exists. Real property continues to exist regardless
of any company's success or failure.
Terms of Service Override: Even if you "own" virtual land, the platform's terms of service typically take precedence over ownership
rights. These terms often give the platform broad powers to modify, limit, or revoke access to virtual property.
This significant gap between virtual and real property rights is why many legal experts argue we need specialized frameworks to better
protect virtual property owners.
6. How might disputes between neighboring virtual property owners be resolved?
Disputes between virtual neighbors could be resolved through several mechanisms:
Platform Governance: Currently, most disputes would be handled by the platform's own rules and enforcement mechanisms. Each
metaverse platform typically has its own guidelines about what users can and cannot do with their virtual property.
Smart Contract Rules: More advanced platforms could encode "virtual zoning laws" into smart contracts that automatically enforce
certain standards. For example, a smart contract might prevent building structures that exceed certain heights.
Community Governance: Some decentralized platforms use DAOs (Decentralized Autonomous Organizations) where property owners
vote on rules and dispute resolutions.
Traditional Arbitration: Platforms could establish arbitration processes where neutral third parties resolve disputes between virtual
landowners.
Court Systems: As virtual property becomes more valuable, traditional courts might begin hearing cases about virtual property disputes,
especially if real money is involved.
Typical disputes might involve:

Visual obstruction (someone building something that blocks another's view)

Offensive content displayed on neighboring property
Excessive "traffic" causing technical slowdowns
Activities that decrease neighboring property values

The challenge is balancing property rights with platform limitations, as ultimately the technical capabilities of the platform determine
what's possible and enforceable.
7. Could someone take out a loan using virtual property as collateral?
Yes, loans using virtual property as collateral are already emerging, though they're still uncommon. Here's how they work:
Virtual property loans typically use smart contracts that automatically transfer ownership of the NFT (representing the virtual land) to the
lender if the borrower fails to make payments. This is similar to how a bank might foreclose on a physical house when mortgage
payments are missed.
These loans face several challenges:

Volatility: Virtual land values can change dramatically, making it risky collateral
Platform Risk: If the platform shuts down, the collateral becomes worthless
Legal Uncertainty: Without clear legal frameworks, enforcement of these loans exists in a gray area
Limited Market: Finding a lender willing to accept virtual land as collateral can be difficult

Some crypto platforms now offer these services, but traditional banks generally don't accept virtual property as collateral yet. As
mentioned in the additional materials, smart contracts for these loans would need to include warning procedures and automatic transfer
mechanisms if payments aren't made.
As the market matures and legal frameworks develop, we might see more sophisticated lending options for virtual property, possibly
even integration with traditional financing systems.
8. What happens if someone "trespasses" on virtual property?
Trespassing in virtual worlds works differently than in the physical world:
Technical Controls: Most metaverse platforms have technical barriers that prevent unauthorized access to private virtual property. For
example, platform code might simply not allow other avatars to enter private spaces without permission.
Different Levels of Access: Typically, property owners can set different access levels - fully public, restricted to friends, or completely
private. This is more flexible than physical property.
Limited Enforcement: If the platform allows people to enter others' spaces, there may be reporting systems to alert moderators about
unwanted visitors.
No Physical Harm: Unlike physical trespassing, virtual trespassing doesn't threaten physical safety, though it could potentially cause
emotional distress or interfere with business activities.
Content Theft: A bigger concern than simple trespassing might be theft of virtual items or copying of unique designs within the property.
Currently, consequences for virtual trespassing are primarily determined by platform rules rather than laws. A platform might ban users
who repeatedly violate others' space, but there's generally no legal consequence unless the trespassing involves other illegal activities
like harassment or fraud.
As virtual property becomes more valuable and virtual activities more important, we may see the development of specific "virtual
trespass" laws to address these issues.
9. How might inheritance laws apply to virtual property?
Inheritance of virtual property presents unique challenges compared to physical assets:
Access Credentials: The biggest practical challenge is ensuring heirs can access the crypto wallet containing the NFTs that represent
virtual property. If someone dies without sharing their private keys or recovery phrases, their virtual assets could be permanently
inaccessible.
Will Specifications: People should specifically include virtual assets in their wills, including details about how to access the necessary
accounts and wallets.
Platform Policies: Many platforms don't have clear policies for transferring ownership after death. Some might require death certificates
and legal documentation to transfer accounts.
Valuation Issues: Determining the value of virtual assets for estate purposes can be challenging due to market volatility and the unique
nature of each property.
Jurisdictional Questions: Which inheritance laws apply when the deceased, the platform, and the heirs are all in different countries?
Digital Estate Planning: New services are emerging to help people plan for the transfer of their digital assets, including virtual property.
Current inheritance laws generally don't specifically address virtual property, creating potential confusion and disputes. As these assets
become more valuable, we'll likely see both legal evolution and technical solutions to ensure virtual property can be properly passed to
heirs.
10. Do you think virtual property will ever have the same legal protections as physical property?
I believe virtual property will eventually gain stronger legal protections, but they'll likely remain different from physical property
protections due to their fundamentally different nature.
Reasons why protections will increase:

As more money flows into virtual worlds, economic pressure will drive better legal frameworks
Technological improvements will make ownership and transfer more secure
Government recognition of digital assets is already growing
Court cases will gradually establish precedents for virtual property rights

Reasons why protections will remain different:

Platform dependency means virtual property can't be fully independent like physical property
The global nature of virtual worlds makes unified legal approaches challenging
The ability to create unlimited virtual land creates different economic dynamics
Technical aspects of digital ownership are fundamentally different from physical possession
I think we'll see a hybrid approach develop:
Special legislation specifically for virtual property
Standards for platform responsibilities toward property owners
International agreements on cross-border virtual property issues
Technical solutions like decentralized platforms that reduce dependency on single companies
The end result will likely be a robust but distinct legal framework that acknowledges both the similarities and fundamental differences
between virtual and physical property.

Recent Developments (1-2 minutes) Since completing this research, there have been several significant developments
in the virtual real estate space: In February 2025, major tech companies including Meta and Microsoft jointly announced
the "Digital Property Standards Initiative," establishing common protocols for interoperability between different metaverse
platforms.
Just last month, Singapore became the first country to enact comprehensive digital property legislation, recognizing
NFT-based ownership of virtual assets and establishing a blockchain-based registry system for recording transactions.
Meanwhile, the Reserve Bank of India recently issued a discussion paper on the regulatory framework for virtual assets,
suggesting the government is actively considering how to approach digital property rights. However, concerns about
speculative bubbles in virtual real estate markets have grown after prices in some metaverse platforms dropped by over
60% in the past quarter, highlighting the volatility of these emerging assets.
Slide 1. Hello everyone! Today, I'm talking about how property laws might work for virtual real estate -
digital land that people buy and sell in online worlds or the "metaverse."

Slide 2. Traditionally, property has been defined in relation to physical, tangible things like land,
buildings, or objects of inherent value. But there has been a rise in digital assets like
cryptocurrency, NFTs and virtual real estate that challenges this traditional concept of property.

Just like people buy houses and land in the real world, they're now spending real money to own
digital spaces where they can build, socialize, and even run businesses. My research looks at
whether our current property laws can handle these new digital assets or if we need brand-new
laws.

First, a user creates an account on a digital marketplace or metaverse platform. When they find
a piece of virtual land they want to buy, the purchase happens through something called a
"smart contract" - basically, a self-executing computer program stored on blockchain technology.

Slide 3. Once the purchase is complete, the buyer receives an NFT (Non-Fungible Token) representing
their ownership. This NFT works like a digital deed and is stored in the buyer's crypto wallet. It
contains unique information proving they own that specific piece of virtual land.

Slide 4. Just like real-world property, location matters in virtual worlds! Land near popular areas or
celebrity-owned properties can be much more expensive. For example, someone paid $450,000
for virtual land next to Snoop Dogg's property in a platform called Sandbox!

Slide 5. Property rights have changed dramatically throughout history. In medieval times, land was divided
between lords and regular people in a system called feudalism. The landmark case of National
Provincial Bank v. Ainsworth in 1965 established that traditional property rights must include
definability, identifiability, capability of assumption by third parties, and some degree of
permanence.

By the 1800s, countries like India created formal property laws that defined how land could be
bought and sold. The Transfer of Property Act from 1882 set up rules for how property changes
hands in India.

These laws were created for physical things you could touch and see. But virtual property exists
only as computer code and blockchain entries. It challenges our basic ideas about possession
and control.

For example, in real life, we show ownership by physically occupying land or having a paper
deed. In virtual worlds, ownership is shown through cryptographic keys and blockchain records.
This fundamental difference creates legal challenges.

Slide 6. When we try to apply traditional property theories to virtual assets, we encounter significant
challenges: Under Locke's labor theory, which suggests we acquire property rights by mixing
our labor with natural resources, can the coding or designing of virtual space qualify as sufficient
labor to justify ownership?

From a utilitarian perspective, recognizing virtual property rights could stimulate creativity and
economic productivity in virtual environments but might also lead to monopolization and wealth
concentration.
 Virtual property can also be viewed through social constructivism, where value and ownership
are determined by social beliefs and practices rather than inherent qualities.

The fundamental question becomes: can we meaningfully conceptualize and enforce ownership
without physical control? The lack of clarity around virtual real estate's legal status creates
practical problems for businesses and leaves consumers vulnerable to fraud.

Slide 7. whether India's Transfer of Property Act (TPA) can handle virtual land?

Section 5 defines property transfer as an act of "conveyance," traditionally referring to physical

transfer through deeds or registration. In the case of virtual real estate, conveyance could be
reinterpreted as the transfer of control over cryptographic keys or access credentials that grant
ownership rights. For example, when a digital plot in a metaverse is sold, the buyer receives a
unique token (often in the form of an NFT) that represents ownership. This token functions as a
digital deed, ensuring that ownership is transferred securely and transparently.

Section 6 establishes a default position that property is transferable unless specifically

prohibited. As there is currently no law in India expressly prohibiting the transfer of virtual real
estate, it can be argued that such transfers are permissible under this section.

Section 54 of the Transfer of Property Act (TPA) governs the sale of immovable property,
defining it as a transfer of ownership in exchange for consideration. It outlines key requirements
for a valid sale, including delivery of possession and registration.

In the case of virtual real estate, ownership is typically transferred through blockchain
technology, where cryptographic keys or tokens (such as NFTs) represent ownership rights.
These transactions often involve smart contracts that automate the transfer process once
payment is made. While this aligns with the concept of consideration under Section 54, the lack
of physical documentation or tangible possession raises questions about whether such transfers
can be categorized as "sales" under Indian law. To adapt Section 54 to virtual real estate,
ownership transfer via blockchain can be interpreted as a digital equivalent to traditional deeds
or contracts. The cryptographic token functions as proof of ownership, similar to a registered
deed in the physical world.

****when you buy virtual land, your rights are actually governed by the platform's user
agreement, not property law.

This creates a significant problem. Even if you spend $100,000 on virtual property, the platform
could theoretically ban your account the next day, making your NFT essentially worthless.

Most platforms like Sandbox reserve the right to limit or terminate your access to digital assets
you've purchased. This means virtual property ownership is much less secure than real-world
property ownership.

For example, if someone leases their virtual land to another user who then does something that
reduces the land's value, there's often limited protection. Smart contracts currently handle basic
things like payment and time limits, but don't address many potential problems.*********

Slide 8. Indian courts haven't directly addressed virtual property in relation to the Transfer of Property Act.
However, there have been some relevant cases about digital assets:
 In 2021, India's Supreme Court struck down the RBI's ban on cryptocurrency transactions,
showing some recognition of digital assets' importance.

More recently in 2024, the Orissa High Court ruled that cryptocurrencies aren't considered
"money" under certain laws, allowing their use in transactions.

These cases suggest courts are beginning to recognize digital assets, but we still need clearer
rules specifically for virtual property.

Slide10. Ethical Considerations (1 minute)

Virtual property raises important ethical questions:
●​ Fair access: Will only wealthy people be able to own prime virtual land?
●​ Monopolies: Could big companies control too much virtual space?
●​ Indigenous rights: Some indigenous communities have raised concerns about being
excluded from metaverse land distribution, seeing parallels to historical land seizures
These ethical considerations should guide how we develop laws for virtual property, ensuring
digital spaces don't reproduce or worsen real-world inequalities.
Recommendations (2 minutes)
Based on my research, here are some suggestions for addressing virtual property:
1.​ Create specialized laws specifically for virtual real estate that clearly define ownership
rights and responsibilities
2.​ Develop smart contracts that offer more comprehensive protections, covering issues like:
○​ What happens if someone defaults on a virtual property loan
○​ How to resolve disputes between neighboring virtual landowners
○​ Protections for people who lease their virtual land to others
3.​ Establish some government oversight of virtual property platforms to protect consumers
4.​ Create a system for registering virtual property ownership that gives similar protections
to real-world property registration
5.​ Consider international cooperation since virtual worlds cross national boundaries

Conclusion (1 minute)

Virtual real estate presents both exciting opportunities and complex challenges for our legal
system. Our current property laws weren't written with digital worlds in mind, creating a gap
between existing rules and new realities.

As more people invest real money in virtual spaces, we need clear rules to protect these
investments and prevent fraud. The goal should be creating a system where virtual real estate
can develop safely while still allowing for innovation.

By updating our legal framework, India could become a leader in this emerging digital frontier,
ensuring that as technology evolves, our laws evolve alongside it.