A home included with city press release addressing lawsuit.
The City of Detroit announced Wednesday that it filed a sweeping lawsuit against the Florida-based Real Token real estate firm and its 165 affiliated corporations for public nuisance violations involving more than 400 residential properties in the city, both occupied and vacant.
"The lawsuit alleges that Real Token — a blockchain-based real estate investment platform — and its network of shell corporations and affiliates neglected their responsibility to ensure that hundreds of properties in Detroit complied with basic health and safety requirements," the city said in a press release. "That failure led to widespread code violations and blighted properties, including criminal activity and threats to the health and safety of Real Token tenants."
Also named in the suit are brothers Remy and Jean-Marc Jacobson, founders of Real Token, also known as RealT.
RealT sells fractional ownership of properties to overseas investors using cryptocurrency, according to Outlier Media. In Detroit, it has raised close to $93 million and amassed a portfolio of more than 600 properties. The company did not immediately respond Wednesday to Deadline Detroit for comment via email.
The lawsuit says the properties in question fall into these categories:
- Residences with emergency correction orders or serious health, safety, and welfare issues
- Vacant residences that are open to trespassers and provide a haven for squatters and criminal activity
- Residences not in compliance with city codes
The suit states that there are hundreds of thousands of dollars in unpaid blight violations and hundreds of thousands of dollars in outstanding property taxes.
“This is the largest nuisance abatement case in our history,” said Conrad Mallett, Corporation Counsel for the City of Detroit, in a statement. “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.”
“We are sending a message: No matter how innovative your business model may be, you cannot hide behind technology or corporate formalities to evade your responsibilities as a property owner,” Mallett added.
Key allegations, according to the suit and a press release, include:
- Persistent Code Violations: The properties cited in the lawsuit were repeatedly found to be in violation of local building, health, and safety codes.
- Negligent Ownership Structure: Real Token allegedly used a complex web of LLCs and shell companies to evade responsibility for property upkeep.
- Endangerment to Public Health & Safety: The neglect has led to increased criminal activity, rodent infestations, fire hazards, and structural decay.
- Blockchain and Accountability: This is believed to be the first lawsuit of its kind targeting a blockchain-based property investment platform for nuisance-related violations at scale.
