Detroit Sues RealToken LLC for Neglecting Properties and Endangering Tenants
Detroit has filed a lawsuit against RealToken LLC and its co-founders, Remy and Jean-Marc Jacobson, as well as 165 corporate defendants, in what is being deemed as the largest nuisance abatement lawsuit in the city’s history. The lawsuit, filed in Wayne County Circuit Court, accuses the Florida-based blockchain real estate startup of failing to meet health and safety standards across 400 properties under its management, leaving tenants in hazardous living conditions.
City of Detroit Corporation Counsel, Conrad Mallett, stated, “These defendants have profited from our communities while ignoring their most basic legal obligations as landlords and property owners. Our neighborhoods are not investment portfolios, they are homes for Detroit residents.”
While RealToken promises high yields to investors, tenants are allegedly living in unsafe and non-compliant conditions. The lawsuit seeks repairs to be mandated, rent escrow accounts to be established, and personal liability for the co-founders for failing to authorize payment for necessary repairs.
The complaint also highlights the negative impact of RealToken’s mismanagement on Detroit neighborhoods, leading to dangerous structures attracting criminal activities. Many properties lack essential amenities such as heat, running water, and secure entryways, with some tenants enduring years without basic necessities like a working shower or safe access to their homes.
Fractional Ownership and RealToken’s Role
RealToken LLC, operating as RealT, has been accused of quietly acquiring hundreds of properties in Detroit and selling fractional ownership through cryptocurrency. Fractional ownership involves tokenizing real-world assets and allowing multiple investors to own shares collectively in a single asset.
RealToken claimed to have launched the world’s first real estate tokenization platform on Ethereum in 2019 before moving to Gnosis Chain due to rising fees on Ethereum. The concept of asset tokenization aims to provide transparency, efficiency, and lower investment thresholds for traditionally illiquid asset classes.
Asset tokenization has the potential to revolutionize real estate investment by making it more accessible and transparent for investors. However, the lawsuit against RealToken underscores the importance of responsible management and compliance with health and safety regulations to ensure the well-being of tenants and the community.
As the legal proceedings unfold, Detroit is taking a stand against negligence in property management and advocating for the rights and safety of its residents.
Article edited by Sebastian Sinclair