DETROIT – A Wayne County Circuit Court judge ordered Real Token and its affiliated companies to cease rent collection from hundreds of Detroit properties until they meet city compliance standards—marking a significant development in Detroit’s largest nuisance abatement case to date.
Judge Annette Berry’s temporary restraining order requires Real Token to establish escrow accounts for tenant rent payments, which can only be accessed for property repairs.
The blockchain-based real estate investment platform faces allegations of widespread code violations across more than 400 residential properties in Detroit.
Key Court Order Requirements
- Rent collection prohibited until properties receive certificates of compliance
- Tenants must deposit rent into escrow accounts
- Real Token barred from pursuing evictions in non-compliant properties
- Company must secure 58 vacant Priority One properties within 30 days
- Code violations must be corrected within 90 days
“These defendants have profited from our communities while ignoring their most basic legal obligations as landlords,” said Corporation Counsel Conrad Mallett. “Our neighborhoods are not investment portfolios — they are homes for Detroit residents.”
The lawsuit alleges Real Token used multiple shell corporations to avoid responsibility for maintaining properties, leading to health and safety hazards, including:
- Structural decay
- Fire hazards
- Rodent infestations
- Criminal activity at properties
- Non-functioning utilities
How Real Token works
Real Token operates as a decentralized real estate investment platform, allowing international investors to purchase fractional ownership of rental properties through blockchain tokens.
The lawsuit represents the first major legal challenge to a blockchain-based property investment platform for large-scale nuisance violations.
“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 said.
Tenant Protection Measures
The City of Detroit will assist affected tenants with:
- Setting up escrow accounts for rent deposits
- Guidance through the compliance process
- Property inspection coordination
- Documentation of repairs and improvements
City officials announced plans for door-to-door outreach in the next seven days to inform residents about the escrow process before August rent payments are due.
Real Token released the following statement on July 2 when the original lawsuit was filed:
“Since RealToken has entered the Detroit market, we have been committed to the goal of providing safe, affordable housing for our tenants, and playing a supporting role in revitalizing Detroit’s neighborhoods. Unfortunately, we have been one of many victims in Detroit of several unscrupulous property management companies. These companies were paid hundreds of thousands of dollars to oversee RealToken’s properties, address tenant complaints and make repairs, and maintain each of our properties in accordance with City of Detroit municipal codes. As it turns out, there are many instances where these goals were not achieved, and each management company, in its own way, stole these funds to the detriment of RealToken and more importantly, the tenants we serve.
We know that nobody is going to feel sorry for RealToken and we have taken full responsibility for our mistakes: that is why since December 1st 2024, we have invested in our property management company to directly manage our properties, and instituted comprehensive checks and balances to ensure something like this never happens again. We took over all the properties at once and started addressing blight violations, administrative filings, servicing maintenance calls and conducting full rehabs. We have made complete repairs to over several dozens of properties, addressed hundreds of blight tickets, and have contractor teams in the field every day addressing each disgruntled tenant and city citation in turn. This process cannot happen overnight. It takes time. But we are committed to addressing every issue, and finally execute on our original mission.
That being said, we have not been served with a lawsuit, and reserve all further comment until after our lawyers have had a chance to review the allegations and present our response at the appropriate time in Wayne County Circuit Court."
Statement from Real Token