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  • Welcome to Lofty's FAQ đź‘‹
  • FAQ
    • What is Lofty?
    • How does the Lofty Marketplace work?
    • Which payment methods can tokens be purchased with?
    • Can non-US citizens participate?
    • Can I sell my tokens anytime?
    • How does Lofty make money?
    • How do taxes work?
    • How does governance work?
    • How are repairs handled?
    • How often do I receive rental income?
    • How do I withdraw my rental income?
    • Do I benefit from depreciation?
    • Will I lose my tokens if Lofty AI goes out of business?
    • As an owner am I liable if any lawsuits / accidents occur at the property?
    • Who manages the properties?
    • What is your Property Manager's process and tenant selection criteria?
    • Are Lofty properties purchased using debt?
    • Who owns the properties that are being listed on your platform?
    • How long after I pay will I receive tokens in my Algorand wallet?
    • Does the price of Algorand affect the price of Lofty tokens?
    • What is an Algorand wallet’? Why do I need one?
    • Which blockchain is Lofty AI using to tokenize properties?
    • How many tokens can I purchase in each property?
    • Can I do a 1031 Exchange with Lofty properties?
    • Who legally has ownership of these properties?
    • How is token appreciation determined over time?
    • How do we ensure each LLC owns the deed on its property?
    • Do I have to submit my ID before I can participate?
    • Why do I need to fill in personal information, and is it encrypted?
    • Why is my ID verification taking so long?
    • How can I track the performance of my property?
    • How long are properties held before they're sold?
    • Do you have 2 Factor Authentication (2FA) available?
    • What happens if a property doesn't sell fully by the deadline on the website?
  • Glossary
    • IRR
    • Cash on Cash return (CoC)
    • Cap rate
    • Appreciation
    • Net Operating Income (NOI)
    • Diversification
    • Operating Expenses
    • CapEx
    • Single-Family
    • Duplex
    • Triplex
    • Quadplex/Fourplex
    • Capital Gains Tax
    • Closing costs
    • MLS
    • HVAC
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  1. FAQ

How does governance work?

Token holders vote on all decisions of the properties they’re owners of. These decisions may include when to increase rents, when to sell the property, whether to evict a tenant or offer them cash for keys, and more. All co-owners must fill out a survey after their first investment specifying the decisions they’d like to make in certain situations.

The winning decision is decided by a 60% Supermajority vote and the winning vote is sent to the property manager who carries out the decision. Issues that aren't covered by this automated process will be put up for voting on our platform by owners of the property in question. We're continuously improving our governance protocol. Token holders are the owners of these properties, not Lofty––which is why token holders have full control and voting rights on all properties.

The only exception is that owners cannot vote on things that are illegal. For example, in many states, it's illegal to not fix problems in a property that's causing it to be unlivable when a tenant is leasing it. If a pipe broke and the house was flooded, the PM by law has to fix the problem at the earliest possible time. The membership cannot vote to save funds and not fix a problem like this.

In Q3 of 2022, we will launch our fully automated governance system at which point owners will be able to vote on property decisions in real time from within their dashboard.

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Last updated 3 years ago