On Wednesday, the city of Detroit filed a lawsuit against tokenized real estate specialist RealT. What is the company being accused of?
Detroit municipality sues RealT
With its value proposition, RealT has shaken up the real estate investment market by making it much more accessible. However, the company is now facing legal action in Detroit, a city where it has a significant presence.
And with good reason: on Wednesday, the city filed what it calls the largest nuisance lawsuit in the city’s history. As reported by local media outlet The Detroit News, the lawsuit targets the parent company Real Token, its founders Remy and Jean-Marc Jacobson, and 165 affiliated companies, for a total of 408 companies named in the complaint, for failing to obtain full compliance certification.
In its complaint, the municipality goes so far as to consider 53 properties “unquestionably harmful to the health, safety, or welfare of the public.”
On a map provided for the occasion, we can see three levels of priority, ranging from violations of the rules of the Buildings, Safety Engineering, and Environmental Department (BSEED) to health hazards:
Conrad Mallett, the city’s lawyer, responded to the claims made against RealT:
First, we want our $500,000 in fines. Second, we want all of these properties to pass a compliance inspection, which will entitle them to a certificate of compliance. And if you can’t get a certificate of compliance, repair the property so that it qualifies for the certification required by the ordinance.
For its part, RealT has blamed “several unscrupulous property management companies” for failing to fulfill their part of the contract despite receiving significant payments, prompting it to take over the management of its properties itself as of December 1, 2024. In addition, the company claims that it is taking care of the properties in need of renovation, but that the process is taking time:
We took over all the properties at once and began addressing damage violations, administrative issues, maintenance, and complete renovations. We have fully repaired dozens of properties, addressed hundreds of damage violations, and have teams of contractors on the ground every day to address every dissatisfied tenant and every municipal violation.
As this article is being written, the company has announced a community call today at 5:30 p.m. Paris time. With RealT now claiming more than 65,000 investors and $29 million in distributed revenue, we will be following this procedure to find out what happens next.
