Legal & Regulatory
Frequently Asked Questions

Yes — landlords set the cap (5–100% of equity), and tenants must agree before signing.

• Landlords retain control and decide how much equity to tokenize.
• Tenants can negotiate or walk away if terms don't fit.
• When tenants reach 100%, they assume ownership of the LLC that owns the property.
• All terms are codified in a Series LLC operating agreement and mirrored on-chain.

Token value reflects property fundamentals — not daily trading.

• At issuance: based on appraised value.
• Updates: annual revaluations or major events (refinance, sale).
• Liquidity: trades only inside KeyPath, with KYC/AML and right-of-first-refusal.

No. Rent-based tokens reflect equity accumulation, not operating costs.

• Landlords cver maintenance until full tenant ownership.
• No separate platform fees for tenants.
• Optional “spot contributions” let tenants buy more equity at current valuation.

Tenants can:

1. Sell tokens back to the landlord (first right of refusal).
2. Sell to approved investors.
3. Apply tokens toward ownership.
4. Join portfolio-level liquidity events. All trades occur within the KeyPath ecosystem, ensuring compliance and transparent pricing.

Yes — unless their contract specifies a required buyback.

• Default: they can hold tokens passively or sell via the platform.
• Smart contracts define if/when forced buybacks occur.
• Tokens can't trade on open markets, only within KeyPath.

KeyPath unlocks both financial and operational value:

• Partial liquidity (tokenize 5–30% without refinancing).
• Reduced turnover → +200bps NOI uplift.
• New income streams via token trades.
• Access to ESG-aligned and impact-focused capital.
• AI dashboards for churn prediction and tenant analytics.

Yes — under pre-defined conditions only:

• Sale of property or portfolio.
• Lease termination or eviction.
• Refinancing events. Tenant protections include agreed valuation formulas, FRoR options, and visibility on-chain.

Token value may decline — but tenants never face foreclosure or debt.

• Risk limited to accumulated equity.
• Smart contracts track landlord payments (mortgage, taxes, insurance).
• Tenants receive alerts if obligations fall behind and can trigger protective rights.

Landlords: onboard → set token % → launch dashboard. Tenants: sign lease → accrue tokens monthly → view holdings and liquidity in real time. Dashboards:

• Track equity growth and property performance.
• Enable cash-outs, FRoR, and smart-contract compliance.
• Integrate alerts for missed mortgage/tax payments.

Your full control center for tokenized equity:

• Value Creation: simulate NOI/IRR uplift.
• Token Management: create, buy back, or resell tokens.
• Performance Insights: real-time NOI, delinquency alerts, ESG reporting.
• Compliance: AML/KYC + Reg D/CF monitoring built-in.

Yes. KeyPath partners with lenders (e.g., Figure, Tellus, Melo) that accept tokens as part of the down payment collateral or credit history toward rent-to-own conversion. This bridges Web3-enabled ownership with traditional home financing.

No. Token holders receive economic exposure only, not deeded ownership. The title remains with the LLC or Trust that owns the property. This prevents complications with lender covenants, title insurance, and property transfer taxes.

No, not inherently. Token issuance and distribution are structured to comply with SEC exemptions such as Regulation CF and Regulation D (506b/506c). Tokens are not marketed for investment return, are only issued via rent-to-own structures, and are not offered to the general public. KeyPath follows Howey Test guidance to avoid classification as securities.

No. Liquidity is controlled. Tokens can only be sold or transferred within KeyPath or its approved partners, subject to KYC/AML compliance and First Right of Refusal enforcement. For Reg D offerings, resale restrictions (e.g., 12-month holding period) may apply.

Token holders receive economic participation rights, including token value appreciation and utility (e.g., using tokens to make a down payment or purchase a unit). They do not receive: Voting rights, Rental income participation, or Control over the property.

KeyPath maintains a formal AML compliance program aligned with FinCEN and SEC guidance. All token issuances and transfers are subject to KYC/AML screening, and tokens are non-transferable without compliance clearance.

No. Since the deed remains with the LLC or Trust and no actual title transfer occurs, tokenization does not trigger: Transfer taxes, Due-on-sale clauses, or Lender consent requirements

Each tokenized property is held in a Series LLC or dedicated Trust, isolating financial and legal risk. Tokens are governed by an operating agreement, and landlords retain full control over: Tenant eligibility, Token issuance terms, or Exit scenarios (buyback, resale limits, etc.)

Yes, potentially. Token holders may incur capital gains taxes if tokens are sold or redeemed for cash value. However, KeyPath is structured to minimize triggering taxable events. All holders receive IRS-compliant tax guidance and annual disclosures when applicable.

KeyPath's legal team tailors each deployment based on jurisdiction-specific real estate and securities laws. Entities are formed and registered in accordance with local statutes to avoid state-level conflicts or enforcement risk.