A
sprawling lawsuit filed by the city of Detroit on July 2 targets Real Token, a Florida-based blockchain real estate company, and its affiliates for public nuisance violations involving over 400 residential properties in Detroit. The suit alleges that tenants are paying the price with poorly maintained rental properties and unsanitary conditions.

    At issue is Real Token's cryptocurrency venture, which offers international investors "fractional ownership of Detroit properties represented as digital tokens." However, the city claims that its tenants are suffering due to unresponsive management and neglected properties. Tenants have reported persistent mold, broken plumbing, caved-in ceilings, and a lack of basic maintenance.

    District 2 Council Member Angela Whitfield-Calloway stated that behind the high-tech language lies a familiar problem: neglected properties, unresponsive management, and Detroit families living in unsafe conditions. Real Token has garnered over 65,000 registered investors since 2019, with ownership spread across "representative tokens" allowing owners to collect revenue from rent and vote on property decisions.

    RealToken blames management companies it hired for the properties, claiming they stole funds meant for repairs and maintenance. However, the company says it has taken steps to address blight violations, administrative filings, and maintenance calls, and has contractor teams working daily to address issues.

    Brenda Davis, a 68-year-old tenant, lives in an apartment with no running water for two months, forcing her to rely on bottled water and family assistance. Minnie Pearl Pratt, another tenant, has had to buy water and boil it due to a broken kitchen sink. Both women have received eviction notices despite their rent being paid.

    Detroit City Council members expressed outrage over the conditions renters were living in and the negligent landlords. They claim that bad landlords have gotten away with too much for years, exploiting vulnerable situations. The city's suit alleges that the cited properties repeatedly violated local building, health, and safety codes, using a web of LLCs and shell companies to evade responsibility.

    The city is seeking all 408 properties to pass a compliance inspection, leading to a certificate of compliance, and wants the defendants to notify tenants that rent must be paid into an escrow account. The city also requests that no evictions take place while this process is ongoing.