In this article we intend to introduce the reader to a real estate tokenization use case, that of Multi-Owner Real Estate Tokenization, which you can find on our Investment Platform once you register, and learn about the details of the tokenized opportunity.

What we mean by Multiple Ownership Properties.

Multiple-owner properties are properties or real estate owned by multiple owners. They are also known as shared ownership, condominium ownership, or timeshare ownership. These properties allow several people to own and use the entire property or a specific part or fraction of the property.

For our use case we focus on those properties that multiple owners want to exploit economically and do not agree on the investment, use and destination of the property.

We give as an example the case of inheritances, where some heirs are interested in selling the property and others in keeping it, but cannot buy it in its entirety. It could also be the case of properties that need investment for their tourist exploitation and the owners do not agree or all of them cannot undertake the investment.

Even timeshare timeshare properties, where the owners have the right to use the property only during certain periods, such as a week or a month a year, could be included in our use case. Provided that there were periods of tourist exploitation to third parties, i.e. that the property generates economic return, they would be susceptible to tokenization in our platform.

It is important to keep in mind that properties with multiple owners imply that they must jointly bear the burdens of the property, such as expenses, taxes or repairs.

When in a property with multiple owners some wish to sell and others do not, the situation can become complicated. The resolution of this type of conflicts usually depends on the agreements and regulations established in the property contract or in the specific condominium regime of the property. The solution may lead to conflict if there is no agreement between owners or if none of them can exercise the right of first refusal by matching the offer of a third party. Situations that may lead to the forced sale of the property and the payment of significant legal expenses.

For timeshare properties, the sale of an owner’s interest always involves time-consuming bureaucracy, notary and registration fees.

Benefits of Tokenization for Multi-Owner Real Estate.

How simple it would be to have a solution that would allow you to enjoy the use of the property or its economic right, and to be able to transfer your participation freely without any cost or prejudice to the rest of the owners.

For inheritances as well as for all other situations where the property is owned by multiple owners, who do not agree or simply need investment for their property, tokenization provides a great opportunity to prevent everyone from selling their share of the property at the current market price.

The greatest benefit offered by tokenization for properties with multiple owners is that of fractioning and digitizing the economic right to the property. These fractions or tokens of the property can be sold to investors who become creditors of a proportional part of the profits generated by the project to exploit the property.

The most advisable is to assign the management of the property to a company specialized in maximizing its exploitation, although it could also be the case that the multiple owners maintain the commercial management and are responsible for maximizing the profit of the investors.

There are also various rights in rem for the multiple owners to assign the economic right of the property to the SPV, which defends the interests of the investors. For example with a purchase or lease agreement, with special clauses.

In short, tokenization is the best solution for conflicts or problems in properties with multiple owners.

• Inheritances: the heirs interested in selling receive the consideration in trust money and the heirs who do not want to sell receive the consideration in tokens of the property. Therefore, the heirs holding the tokens are entitled to receive the economic return on the property according to the conditions agreed upon in the sale, i.e. rental return and capital gain on future sale.

• Need for investment: if the property needs renovations for its operation and the owners cannot afford it, they can sell tokens of the property to capitalize and execute the real estate project. Sharing the risk and benefit of the real estate project with an investment community.

• Management incapacity: the owners do not have time or are not experts in tourism management, but they do not want to unlearn their property to enjoy it at certain times of the year. They can tokenize the economic right of the property for a specialized company to maximize its exploitation, sharing the benefits and enjoying the property according to the agreed periods.

How we tokenize properties with multiple owners.

For this use case, Tokeniza Real Estate follows its standardized tokenization protocol, consisting of subscribing a Tokenized Participating Loan with the investors who purchase the tokens.

Our role is to facilitate a legal vehicle for the owners and the investment community, solving the needs of both parties.

By way of example, but not limited to, we take care of:

• Analyze the situation of the property with multiple owners, its current state and its potential tourist or commercial exploitation.

• Define a real estate project plan, with the legal structure, the necessary investment and the expected return.

• Make the offer to the owners of the property, who can receive trust money or tokens of the property. If the offer is accepted, we consult the investment community about the opportunity to tokenize the real estate project.

• If the Investment Community has a favorable response, we offer the tokens to the investors.

• With the funds raised, we undertake the agreed tourist exploitation project and distribute the profits to the token holders.

In each legal subscription contract to the Tokenized Participative Loan Offering, the tourist exploitation project is described in detail, stating the actions that we will carry out with the funds raised, all the legal clauses required by our legislation, the characteristics of the token and the financial projection.

It is important to note that in this type of tokenized real estate project if periodic returns are distributed, unlike the use case of tokenization of Non Performing Portfolio Loans (NPL).

If you have arrived here and you are interested in knowing the details of our Multi-Owner Real Estate Tokenizations, do not hesitate and enter the Tokeniza Real Estate Platform to be part of this change of era.

Likewise, if you share ownership of a property and you believe that tokenization can solve your particular case, contact us and we will inform you about our service.

Let’s democratize access to the real estate market!