What are Voting Rights?

Voting rights are the rights granted to ownership-interest holders to participate in defined governance decisions of the SPV. As specified in the operating agreement; It covers matters such as:

Major asset dispositions

Amendments to the operating agreement

Removal of the general partner.

The operating agreement for each SPV defines which decisions require investor approval and which are within the manager's or general partner's discretion.Voting structures vary significantly across fund types, with commingled funds offering limited voting compared to private partnerships where investors retain substantial control.

Matters typically requiring a vote include:

The sale or refinancing of the property

Amendments to the operating agreement

Changes to the distribution waterfall

Removal or replacement of the general partner,

Decisions to extend or terminate the hold period.

Day-to-day operational decisions, including

Leasing

Maintenance

Rent adjustments

Vendor selection,

are typically delegated to the property manager and general partner without requiring a vote.

The operating agreement draws the line between governance matters (voted) and operational matters (delegated).

How Voting Rights Are Structured?

Voting rights are proportional to ownership. An investor holding 5% of the outstanding ownership interests in an SPV has 5% of the voting power. Most governance actions require a simple majority (more than 50%) of ownership interests to approve. Certain fundamental matters, such as dissolution of the entity or amendment of core economic terms, may require a supermajority (66.7% or 75%).

The practical implications of voting rights allow minority investors with 20% capital but higher voting percentages to effectively prevent changes without consent.

Co-investment funds increasingly include single-asset voting and key man provisions requiring investor consent for manager departures. Partnership structures typically grant voting proportional to capital contribution, though tiered systems grant different classes different voting power.

Sophisticated investors negotiate for retained control over major decisions while allowing sponsors flexibility in day-to-day management. The operating agreement specifies the voting thresholds for each category of decision, the notice requirements for calling a vote, the procedure for casting votes, and the quorum needed to make a vote valid.

Voting Rights in Tokenized Real Estate

Tokenization makes voting mechanically simpler. Since the cap table is maintained on-chain and each ownership interest is tied to a verified wallet; voting can be conducted through the platform without manual ballot collection.

The smart contract can verify that only eligible holders can vote and that each vote is weighted correctly according to the cap table.

This does not change the legal substance of the vote. The operating agreement defines the governance rules. The blockchain provides the execution layer. The legal authority of the vote derives from the operating agreement, not from the smart contract.

Voting Rights at Node Proptech

Voting rights for each Node SPV are defined in the operating agreement and disclosed in the Private Placement Memorandum. The scope of matters subject to investor vote, the required thresholds, and the voting procedure are specified before investors commit capital.

Best practices include clear documentation of voting procedures, timelines, quorum requirements, carve-outs for routine operations, and dispute resolution mechanisms.

Voting is proportional to ownership and it is conducted through the platform's governance infrastructure.