Ellen Murphy SVP, Deputy General Counsel | realtors.com
Detroit renters are facing challenges due to issues at properties managed by RealT, a cryptocurrency real estate venture. RealT, based in Florida, promotes its method of "revolutionizing investment through tokenization" on its website. This approach has involved selling portions of rental properties in Detroit to foreign investors, resulting in some tenants living in poorly maintained homes.
Outlier Media reports that many of the approximately 1,200 housing units owned by RealT across 800 properties have deteriorated. Tenants report difficulties contacting property management for necessary repairs and some face eviction despite paying rent. Additionally, confusion exists about whom tenants should pay rent to due to the anonymity of token holders on the blockchain.
RealT's business model involves an online marketplace where fractional ownership of properties is sold as cryptocurrency tokens. These tokens represent property value and entitle holders to dividends from tenant rent payments.
Problems arise when contracted management companies fail to maintain properties effectively. Shirquera Ayers, a tenant on Detroit's east side, expressed frustration with unresolved maintenance issues and described her landlords as "slumlords."
RealT co-founders Jean-Marc and Remy Jacobson attribute problems to former property managers accused of misappropriating funds meant for repairs and taxes. They assert their commitment to rectifying past errors and benefiting the community.
New Detroit PM LLC has taken over property management duties but allegedly did not inform all tenants, leading to uncertainty about rent payments. Eviction notices were issued despite assurances from Jean-Marc Jacobson that residents willing to cooperate would not be evicted.
Glenn Oswald from Marx Layne & Company stated that New Detroit is addressing portfolio issues previously unknown before Fall 2024. He confirmed separate ownership between New Detroit PM and RealToken but noted efforts made by New Detroit PM such as creating an advanced online portal for tenant services.
Oswald emphasized ongoing attempts to identify missing leases during management transitions and assured tenants with a history of timely payments would not be penalized for lease absence caused by prior oversight failures.
Efforts continue as New Detroit PM seeks cooperation from residents through direct communication initiatives like door-to-door visits while working towards updating leases for compliant tenants.
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