Tenants Fight Back Against RealT

A cryptocurrency platform designed to bring real estate investors into Detroit is causing constant headaches for the tenants who live in the affected homes.

Tenants linked to the RealT platform allege the firm’s property managers have failed to do adequate repair work on roughly 1,000 rentals, Outlier Media reported. Many residents are unaware of who they pay rent to and don’t even have leases.

The threat of eviction also looms over some tenants. Many make use of Section 8 housing vouchers or other forms of subsidized rent, which largely ensures consistency in regards to payments. But the landlords are still on the lookout for evictions, recently sending notices to tenants through a new property management company that took charge of rent collection in October.

Florida-based RealT — run by Remy and Jean-Marc Jacobson — allows overseas investors to take fractional ownership of properties through cryptocurrency. Hundreds of investors can own a single property as a company splits a property into hundreds or thousands of tokens, sold to investors who receive dividends based on rental income.

U.S. investors are not allowed to participate. The company’s portfolio spans 1,500 properties, according to the Jacobsons, including tokenized homes in Chicago, Cleveland and St. Louis.

The company outsources property management to local companies, who tenants claim are unresponsive to a growing list of repair needs. The Jacobsons blame former property managers for issues and claim to be planning litigation against at least one. They squarely reject the “speculator” label.

Accountability from investors is hard to come by, as their identities are obscured through blockchain.

More than 100 properties appear to be vacant, according to data for the U.S. Postal Service. That’s a sizable percentage of RealT’s Detroit portfolio, which may range anywhere from 500 to 1,000 properties, all of which were purchased in the last five years.

The alleged delinquency of the owners extends to taxes: hundreds of properties are at risk of tax foreclosure. The company is behind on upwards of 300 properties and more than 200 are at risk of foreclosure due to unpaid debt by next month. A spokesperson claims the company is on payment plans for every tax-delinquent property.

And the Michigan real estate affiliate of RealT, Michigan Realtoken, has accumulated more than 1,000 blight tickets in just a few years.

— Holden Walter-Warner