Risk Disclosures
Investing Involves Risk. Here’s Ours.
We believe every investor deserves a frank, plain-English account of what can go wrong. Read this page carefully before investing.
Important Notice
Investments in real estate — including tokenised fractional ownership — are subject to market, legal, regulatory, and operational risks. Returns are not guaranteed. The value of your investment can go down as well as up. This page is not a substitute for independent financial or legal advice.
Risk Categories
Risks You Should Understand
1. Market & Property Risk
Property values and rental income can fluctuate based on economic conditions, interest rates, demand-supply cycles, and local market dynamics. A property that yields 9% today may yield less — or more — in the future. There is no floor on property value.
2. Liquidity Risk
Fractional real estate is more liquid than whole-property ownership, but less liquid than listed securities. RX Secondaries (the secondary market for FRAX) is currently in development. Until it is live, your primary exit option is finding a buyer through the platform.
3. Regulatory Risk
Tokenisation and digital assets operate in a still-evolving regulatory environment in India. Future regulations from SEBI, RBI, or state governments may impact processes, tax treatment, or compliance requirements.
4. Asset-Specific Risks
Each property carries unique risks: tenant default, vacancy, maintenance costs, title disputes arising after purchase, natural disasters, or location-specific market deterioration.
5. Technology Risk
Blockchain technology, smart contracts, and DLT systems can have vulnerabilities. While RealX employs security best practices, technology failures, bugs, or cyberattacks cannot be entirely ruled out.
6. Tax Risk
The tax treatment of FRAX token income and capital gains may change as regulations evolve. We recommend consulting a tax advisor for your specific situation.
Platform Risk — Specifically
What If RealX Stops Operating?
This is the most important risk question for any platform-based investment. Most tokenisation platforms use an SPV (Special Purpose Vehicle) structure — the platform controls a company that owns the property. If the platform fails, the SPV may be wound up, and investors’ claims sit behind company creditors.
RealX deliberately avoids this model.
How RealX Mitigates Platform Risk
- RealX uses the Secure Digital Rights (SDR) framework — ownership rights are directly in investors’ names.
- Once the sale deed is executed, all legal rights transfer directly to the investors. RealX holds no ownership of the property.
- The blockchain record of your FRAX holdings exists independently of RealX’s servers.
- In a worst-case scenario, a property manager can be appointed without RealX’s involvement.
Mitigation Summary
What RealX Does to Manage Risk
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Rigorous Due Diligence
Title verification, encumbrance checks, independent valuation, and developer/seller background checks for every property before listing.
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Escrow Protection
Subscription funds are held in escrow until the property reaches 100% subscription — protecting early investors from capital being deployed into underfunded projects.
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Non-SPV Structure
The SDR framework ensures your rights exist independently of RealX’s operations. Property ownership is not commingled with platform assets.
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Transparent Reporting
Regular reporting of property performance, rental income, and distribution records through the investor dashboard.
This risks page is provided for informational purposes only and does not constitute financial, legal, or investment advice. Investors should independently assess their risk appetite and seek professional advice before investing.