Property Obligations

Owning a property token means owning the underlying real property, with all the rights and responsibilities that entails. This page outlines the ongoing obligations property owners should be aware of.

Property obligations vary significantly by jurisdiction. The information below reflects common requirements in the United States, where Fabrica validators provide support. Property owners in other jurisdictions should consult local professionals.

Property Taxes

The owner of the Fabrica property token is responsible for paying property taxes. Taxes are assessed by local governments and failure to pay may result in:

• Liens being placed against the property
• Penalties and interest charges
• Potential foreclosure proceedings

How Fabrica Helps (US)

In the United States, the Fabrica validator assists property owners with tax obligations:

• Property tax information is included in token metadata
• Validators monitor tax status as part of ongoing validation
• Tax delinquencies affect the property's confidence score

The holding entity (e.g., Fabrica Trust) remains the recorded owner at the local jurisdiction level, so tax notices are typically sent to the trust. Beneficial owners should ensure they receive and act on these notices.

Insurance

Property insurance is the owner's responsibility. Considerations include:

• Liability coverage: Protection against claims from injuries on the property
• Property coverage: Protection against damage or loss
• Title insurance: Protection against title defects (typically obtained at on-ramp)

Insurance requirements may vary based on property type (developed vs. unimproved land) and location.

Maintenance and Compliance

Property owners remain responsible for:

• Maintaining the property in compliance with local codes
• Addressing any violations or citations
• Managing access and use of the property
• Environmental compliance where applicable

Impact on Confidence Score

Property obligations that are not met can affect your token's confidence score. Issues that may lower your score include:

• Unpaid property taxes
• Outstanding liens or encumbrances
• Code violations

A lower confidence score may impact your ability to sell the property or use it as collateral for lending.

Jurisdiction-Specific Considerations

Property obligations are highly dependent on where the property is located. In the United States, Fabrica's validator infrastructure helps manage these obligations as part of the protocol's application layer.

For properties in other jurisdictions, local validators would need to implement equivalent support. The Fabrica framework provides a model for how jurisdiction-specific obligations can be integrated with onchain property ownership.

Property owners should always:

• Consult local real estate professionals
• Understand jurisdiction-specific requirements
• Maintain records of compliance

See Regulatory Framework for more information on how Fabrica operates within legal requirements.