Detroit has launched its largest-ever nuisance abatement lawsuit against Real Token LLC, a Florida-based blockchain real estate company, and its 165 affiliated entities. The city alleges widespread property violations, blight, and neglect across over 400 properties, impacting tenant safety and neighborhood integrity.
Detroit Takes On Crypto Landlord Over Blight
The City of Detroit has initiated a landmark lawsuit against Real Token LLC, also known as RealT, a company that sells fractional ownership of properties to global investors using cryptocurrency. The lawsuit, described by Detroit Corporation Counsel Conrad Mallett as the "largest nuisance abatement lawsuit ever filed by the City of Detroit," targets the company and its founders, Remy and Jean-Marc Jacobson, for allegedly neglecting hundreds of properties, leading to widespread blight and unsafe living conditions.
RealT has amassed a portfolio of over 600 properties in Detroit, raising close to $93 million. However, an investigation by Outlier Media revealed millions in unpaid taxes and blight tickets, with tenants reporting neglected and unsafe homes. More than 100 properties are reportedly vacant.
Allegations of Neglect and Exploitation
The lawsuit outlines a pattern of severe neglect, with properties exhibiting numerous code violations. City Councilmember Angela Whitfield Calloway stated, "This is not innovation. This is exploitation," highlighting the impact on Detroit families living in unsafe conditions.
Key allegations include:
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Persistent Code Violations: Properties repeatedly found in violation of local building, health, and safety codes.
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Negligent Ownership Structure: Real Token allegedly used a complex web of LLCs and shell companies to evade responsibility for property upkeep.
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Endangerment to Public Health & Safety: Neglect has led to increased criminal activity, rodent infestations, fire hazards, and structural decay.
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Unpaid Dues: Hundreds of thousands of dollars in unpaid blight violations and property taxes.
Fifty-three properties are cited as "unquestionably harmful" to public health and safety, lacking basic amenities like heat or windows, or suffering from structural damage. Tenants have reported living without working showers for years and collapsed porches blocking access to homes.
City's Demands and RealT's Response
The City of Detroit is seeking several remedies through the lawsuit:
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An order for RealT to bring its entire portfolio up to code.
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Informing tenants of their right to put rent into escrow until repairs are made.
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Holding founders Remy and Jean-Marc Jacobson personally liable for compliance costs.
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Allowing the city to make repairs at the company's expense if violations are not corrected within 90 days for the most dangerous properties.
Real Token has claimed victimization by dishonest property management companies, stating they have invested in new management to prevent future issues. However, the city rejects this defense, citing numerous unheeded correction orders and warnings sent directly to Real Token.
Sources
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Detroit sues blockchain-based real estate company from Florida, Yahoo.
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Detroit sues crypto landlord RealT over blight, tenant harm, Outlier Media.
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Detroit Sues Real Estate Firm That Owns Hundreds of Homes in The City With Health and
Safety Violations, Deadline Detroit. -
Detroit Sues Blockchain Real Estate Firm for Widespread Property Violations, Weekly Real Estate News.
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Detroit Sues Crypto Real Estate Platform Over Safety, Health Violations, Decrypt.
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