Legal Clarity
For Tokenized Housing
Understand how KeyPath's platform uses compliant, secure legal structures to support tokenized real estate, without disrupting ownership, financing, or regulation.
Legal Framework for All Stakeholders
Our compliant structure protects everyone while enabling shared value creation
Landlords
Protect title, retain control, improve NOI and IRR, no change to lender agreements.
Tenants
Acquire tokens, each of which represents equity in the LLC that owns a specific rental home or portfolio.
Community Stakeholders
Ensure promises tied to subsidies or public land are enforced.
Investors
Purchase tokens (fractional ownership) backed by compliant legal wrappers.
KeyPath's model allows equity and incentives to be distributed fairly, while maintaining centralized control via Series LLCs or Trusts.
Legal Model Summary
Compliant structures that protect all parties while enabling innovation
Structure & Compliance
Tokenized Ownership
Tokens reflect shares of ownership of the specific LLC that owns the tenant's property. This represents economic participation without transferring the deed.
No Property Title Transfer
Tokens reflect economic exposure, not deeded ownership. This avoids triggering transfer taxes, due-on-sale clauses, or violating lender covenants.
Not a Security Sale
Tenants get tokens via lease/rent-to-own. Not marketed for investment return; no accreditation requirement.
Series LLC or Trust
Each tokenized asset is separated for legal clarity and control
SEC-Aligned Model
Token design and issuance structure adhere to Reg CF, Reg D (504/506b), and avoid security classification under the Howey Test. Legal guidance integrated into onboarding and distribution to ensure compliance across jurisdictions. Token resale restrictions may apply based on exemption used (e.g., Reg D 506b holding periods).
Jurisdictional Compliance
Platform structure adapts to varying state-specific real estate and securities regulations. Tokens issued through entities registered in compliance with applicable laws
Tax & Reporting Compliance
Token activity monitored for potential tax implications. Designed to minimize triggering taxable events unless explicitly sold/transferred. Issuers and holders guided through IRS-compliant disclosures
Control, Liquidity & Protections
Full Landlord & Lender Control
Landlord defines eligibility, benefits, resale rules. No impact on title or senior debt.
Smart Contract Governance
Transparent rules + token rights managed digitally.
Controlled Liquidity
Trading only within KeyPath or approved partners. KYC/AML + First Right of Refusal enforced. KeyPath maintains a formal AML compliance program aligned with FinCEN and SEC guidance
Clear Tenant Disclosures
(Fully Customizable) Not equity, not guaranteed, not transferable to ownership. Designed for financial empowerment, not speculation.
Token Utility For Traditional Loan Financing
Use tokens as collateral for down payments via Figure, Melo & Tellus. Bridging rent-to-own with traditional mortgage pathways. KeyPath doesn't disrupt traditional financing; landlords remain the single borrower and guarantor, keeping lenders fully protected. Tokenization simply layers on top of the capital stack, giving renters economic upside without altering debt enforceability or ownership control.
Risk-Isolating Entities
Series LLC or Trust for each property. Tokens governed by an operating agreement
Defined Token Holder Rights & Custody
Token rights (economic participation, transferability, etc.) are codified in smart contracts and operating agreements. Custody models balance tenant access with landlord control.
Legal & Regulatory FAQ
Need Legal Clarity for Your Use Case?
Our legal team is here to help you understand how KeyPath works For your specific situation.