Case Study: The "Real Token" Compliance Failure
Category: Case Study
Subject: Institutional Risk Management
In 2024, the City of Detroit filed a landmark lawsuit against Real Token Inc., a company that tokenized Detroit real estate for international investors.
The core of the lawsuit? Nuisance Abatement and Unpaid Blight Tickets.
The Failure Point: Information Asymmetry
Real Token owned hundreds of homes. They relied on third-party Property Managers to handle the day-to-day.
- The Gap: The Property Managers were receiving tickets but arguably not resolving them fast enough or communicating the severity to the owners.
- The Result: The portfolio accumulated over $500,000 in fines and corrections.
The "Nuclear" Option
The City didn't just send more tickets. They sued for a Nuisance Abatement Order.
- The Ruling: The Court ordered a freeze on rent collection.
- The Impact: Tenants were instructed to pay rent into escrow, effectively cutting off the cash flow to the investors until the blight was resolved.
The Lesson for PMs and Investors
You cannot outsource compliance blindly.
- If you are an Owner: You need an independent audit of your PM. Are they actually keeping the grass cut? Our alerts confirm it.
- If you are a PM: You need a system to catch these tickets before the owner finds out via a lawsuit.
Detroit Compliance is the insurance policy against the "Real Token" scenario.