What is a Title?

A title is the legal record of ownership of a property, establishing who holds the right to possess, use, and transfer that property, held by the SPV that owns the asset in tokenized real estate structures rather than by individual investors directly.

What Title Means in Real Estate

Title insurance provides protection against defects that were unknown at the time of purchase. A title defect might be a lien from a prior debt, a claim from a former spouse, or a boundary dispute with a neighbor.

Title insurance ensures that these issues do not disrupt ownership. The cost of title insurance is typically paid at closing and is a standard, expected expense. Title is the legal concept that establishes ownership of real property. A clear title means the owner has an uncontested legal right to the property, free of liens, encumbrances, or competing claims.

Title insurance protects the owner and lender against defects in title that were not discovered during the search. In commercial real estate transactions, both owner's and lender's title insurance policies are standard requirements at closing.

Title in SPV-Based Structures

The SPV structure simplifies property transactions. If investors owned the title directly, any disposition would require transfer approval from all fractional owners. By holding title in the SPV, the manager can disposition the property with SPV-level authorization, significantly streamlining the sale process.

This efficiency benefit is one reason why real estate funds and REITs universally use SPV or similar entity structures. In a tokenized real estate offering structured through an SPV, the title to the property is held by the SPV entity, typically a Delaware LLC.

This distinction is fundamental.

Node does not tokenize titles. Node tokenizes ownership interests in legally structured entities. The title remains a traditional off-chain legal instrument, recorded in the county where the property is located, held by the SPV that was formed specifically to own that asset.

Why the Distinction Matters

The SPV also provides bankruptcy remoteness. If one investor encounters financial difficulties, it does not affect the property's title or the other investors' interests. The property is ring-fenced within the SPV, insulating it from investors' personal creditors and legal claims.

Multiple investors can hold interests in the same SPV without creating competing claims to the property's title. The title stays clean because there is one owner on the deed: the SPV.

This structure also simplifies property management, financing, and eventual disposition.

The property manager, the lender, and any buyer at exit interact with a single entity (the SPV), not with dozens or hundreds of individual fractional owners. The operating agreement governs the investors' rights within the entity.

Title at Node Proptech

Each Node asset sits inside its own SPV, and the SPV holds title to the property. Investors purchase ownership interests in the SPV, not fractional titles to the real estate. Title status, insurance, and any encumbrances are disclosed in the Private Placement Memorandum for each offering.

The ring-fenced SPV structure ensures that title to one property is never affected by the performance or obligations of another.