RealX, a Pune-based financial technology startup, is aiming to do transactions in fractional ownership of properties worth Rs 100 crore in the next one year. Recently, it executed the first ever digital fractional ownership transaction in the country.
In digital fractional ownership transaction, a seller puts his property for sale on the RealX platform and multiple buyers can co-own the property. After the sale deed is registered, it is sent to RealX's tech partner REGKO for the issuance of fractional ownership certificates or FRAX to respective co-owners.
On July 31, RealX executed a pilot transaction in Karad, Maharashtra, selling a 150 sq ft shop worth Rs 10 lakh to 19 investors.
RealX said the co-owners can exit at any time, but the property will be disposed off only after five years.
Abhishek Gupta, CEO of REGKO, says, “Our solution was ideally suited for RealX, as we can keep verified records of the fractional ownerships on Blockchain. This technology has inherent benefits of immutability (tamper-proof) and verifiability of records. These records are kept distributed across multiple nodes and this ensures the durability and correctness of it. RealX wanted all of these as its registry solution and we are glad to support it”.
Manish Kumar, Group CEO of iVentures says “We will now open up our platform for various players in Real Estate industry to register with us and begin commercial transactions in two to three months.”
However, there are risks involved as the company itself can decide if the owner can sell the property on completion of five years. Besides, the FRAX isn't tradeable on an exchange, so a co-owner will have to organise his exit from the property on his own.
However, there are risks involved as the company itself can decide if the owner can sell the property on completion of five years. Besides, the FRAX isn't tradeable on an exchange, so a co-owner will have to organise his exit from the property on his own.