Detroit Takes Crypto Landlords to Court Over “Dangerous” Properties
The city of Detroit just filed what it’s calling the biggest nuisance lawsuit in its history—targeting a crypto real estate startup and a long list of affiliated companies. The case, filed Tuesday in Wayne County Circuit Court, goes after Florida-based RealToken LLC, its co-founders Remy and Jean-Marc Jacobson, and 165 other corporate defendants.
At the heart of it? Hundreds of properties allegedly left in shambles while the company promised investors double-digit returns.
“Not Investment Portfolios—Homes”
According to the lawsuit, RealToken—which lets investors buy fractional ownership of properties using cryptocurrency—failed to keep up even basic health and safety standards across roughly 400 Detroit homes. Tenants, the city claims, have been stuck with leaky roofs, busted plumbing, and worse.
“These defendants have profited from our communities while ignoring their most basic legal obligations,” said Conrad Mallett, Detroit’s corporation counsel, in a statement. He didn’t mince words: “Our neighborhoods are not investment portfolios, they are homes for Detroit residents.”
The complaint paints a grim picture: no heat in winter, collapsed porches, mold creeping up walls. One tenant reportedly went without a working shower for two years. Inspectors flagged 53 properties as immediate hazards, citing sewage backups, rodent infestations, and structural damage that could literally leave people out in the cold.
Fractional Ownership—But Who Pays the Price?
RealToken’s model isn’t complicated. They buy houses, split ownership into digital tokens, and sell them to investors chasing yields as high as 16%. But the lawsuit argues tenants foot the bill through neglected repairs and unsafe conditions.
Detroit council member Angela Calloway pointed out the company had been “quietly acquiring” properties across the city, often without much notice. RealToken’s own materials boast about pioneering real estate tokenization back in 2019, though they later switched blockchains to avoid Ethereum’s rising fees.
The city wants the court to force repairs, set up rent escrow accounts, and hold the Jacobsons personally liable. There’s also mention of “vacant, dilapidated properties” allegedly attracting squatters and crime—a problem Detroit knows all too well.
RealToken hasn’t responded to requests for comment yet. But if the allegations stick, this could become a test case for how cities handle landlords who treat homes like crypto tokens—fast to trade, slow to maintain.
And for tenants? It’s not about blockchain or yields. It’s about whether the roof leaks.
