What is Legria's legal structure?
Questions and answers to understand our model and how you truly become an owner of the property.
To help you better understand Legria's structure and how you truly become an owner of the property, among other things, we put together this questions and answers document. It will give you a better overall understanding of our model, and if you need more details, write to us and we will be delighted to answer absolutely any question you have.
How can I truly own a Legria home together with other people?
At Legria we create a joint-stock company (SpA) to acquire each property. The SpA is legally the direct owner of the property, which is registered in its name. Each SpA has 8 shares that hold the economic rights of the SpA. Legria sells these shares to its clients, who, by buying them, hold the economic rights of the SpA that owns the property as its only asset. In this way, clients own the property through the SpA.
What are the advantages of using a joint-stock company (SpA)?
Each co-owner owns a share of the SpA that owns the property, which is an easily tradable and inheritable asset. Because the co-ownership operates through an SpA, the co-owners and the property are protected from whatever happens to another co-owner, and it allows for a co-ownership system that empowers Legria as manager to ensure it is properly followed.
How do you acquire a share of a house?
What you acquire is one (or more) of the eight shares of the SpA, which in turn owns the property. This happens immediately through the digital signature of a private purchase agreement. The SpA has already done all the prior work of signing the promise of sale, reviewing the titles, signing the deed and registering the property.
Where is the operation of the co-ownership regulated?
By signing the share purchase agreement, the client adheres to:
i. The Company's Shareholders' Agreement
ii. The Management Agreement
iii. The Rules and Policies for the Use and Enjoyment of the Property.
These 3 documents govern how the co-ownership works on matters such as booking, Legria's role as manager, permitted use of the property, collection of the property's maintenance costs, how conflicts between shareholders are resolved, among others.
What are the tax implications of selling a share of the joint-stock company (SpA)?
Each shareholder can put their SpA share up for sale. To do so, they can list it on Legria's platform and/or through a real estate broker, at the price the owner decides. Legria will provide an estimate of the share's market value based on the market value of the property. Just like when the share was bought, the sale is carried out by digitally signing a share purchase agreement. As with any share of a private company, the owner must pay tax on the capital gain obtained from selling the share.
What happens if Legria goes bankrupt or shuts down?
First, it is important to be clear that, as with any real estate investment, there is risk. The most important thing to understand is that, since you are buying a share in a company that holds a real estate asset, your investment is not affected by any situation involving Legria. Legria's role is that of manager of the property and of the co-ownership program. If they wish, the co-owners can remove Legria from this role.
In the unlikely event that Legria shuts down, the co-owners remain the owners of the property and can unanimously decide to appoint a new manager. If that does not happen, the sale of the property is triggered and the proceeds are then distributed among the co-owners. In that situation, Legria has 12 months to sell it at market price. If Legria is no longer around, a broker carries out this process.
