Investor Agreement


Between

  1. The Property Crowd Limited (company number 5684149), B:HIVE, 74 Taharoto Rd, Takapuna, Auckland 0622, New Zealand (The Property Crowd or we) and
  2. You, being a person (Investor or you) who wishes to consider subscribing for PropertyShares* in a property in response to an offer (Offer) made through The Property Crowd's website located at www.thepropertycrowd.co.nz (Platform).

1. Our relationship

In addition to the information described here we ask that you read our:

  1. Privacy Policy at www.thepropertycrowd.co.nz/privacy-policy
  2. Terms of use of the Website at www.thepropertycrowd.co.nz/terms-and-conditions
  3. Service Disclosure Statement at www.thepropertycrowd.co.nz/service-disclosure-statement
  4. FAQ's which will highlight more information here www.thepropertycrowd.co.nz/frequently-asked-questions

You must go through an initial registration followed by a verification process before you are able to fund your account and buy PropertyShares* on the Platform.

2. Account Activation

This is carried out in two stages:

  1. Registration - Where we ask for your name and email address and you select a password and agree to adhere to our Privacy Policy. You also need to confirm that you are over 18. You'll receive an email to verify your email address. Once you have registered you'll be able to view properties and have a look at the financials, the photos and all the reports you would need to make a decision to purchase.
  2. Verification - You'll be asked for your Full Name, Address, Date of Birth, NZ Bank Account No, NZ Drivers Licence details and NZ Passport details.

Once you have registered and verification has been completed then you can fund your account and buy PropertyShares* on the Platform.

There may be times when we require additional information to comply with identification and other anti-money laundering requirements. For instance we may need to see certified documents or require more information about the sources of funds you will use to invest in properties.

3. Account Rejection

We can reject, cancel or suspend your account if at any time we are concerned about:

  • The results of your identity verification process.
  • Your age (under 18).
  • Any of your activities on the Platform.
  • Your overseas investor status.

4. Your Account

Please advise and update us of any change in bank account details or email address. This is important for us to meet our reporting obligations and enable your verified status to be maintained.

Also note that by giving us your email address you give us the authority to communicate with you. Additionally the Financial Markets Authority (FMA) has authority to access your details and any information we have about you.

5. Our Property Management Companies

We undertake due diligence of all our Property Management Companies. This includes background checks on the directors and senior managers and their processes to ensure good management practices are maintained.

Property Management Company performance is regularly monitored on an ongoing basis. In addition, we repeat our checks on the Property Management Company's directors and managers, as well as on specific processes every year to include regulatory, financial and operational matters.

The Property Management Companies:

  1. Establish and manage the company established as a special purpose vehicle to own the investment property (SPV); and
  2. Carry out the day to day management of the investment property.

As such the Property Management Companies are responsible for:

  • Establishing the SPV that owns the investment property.
  • Administering and managing the SPV.
  • Sourcing and managing tenants for the investment property.
  • Collecting rent, managing the SPV's bank account and paying surplus income from the investment property to The Property Crowd's Trust Account for distribution to you as dividends.
  • Ensuring properties are kept in good order and paying for all property expenses from the SPV's bank account.

In the event that a Property Management Company is no longer able to manage the investment property, or should The Property Crowd find that the Property Management Company no longer meets its obligations then The Property Crowd will transfer the investment property to an alternative Property Management Company.

6. The Investment Properties

The investment properties that are offered on the Platform have been carefully selected before being offered to our investors.

The Property Crowd has selection criteria and standards against which it measures potential investment properties.

The Property Management Companies source and recommend investment properties to The Property Crowd that they feel meet these criteria and standards. The Property Crowd then makes the final decision as to which of the investment properties are offered on the Platform - effectively a two stage selection process.

7. Fees

You pay The Property Crowd 4% on PropertyShares* purchases.

$1000 per annum is charged to the SPV holding the property to maintain the property on the Platform.

The Property Crowd's fees may change at any time and we will inform you 30 days in advance of any change in fees.

The Property Crowd will retain any interest that is earned on investor funds in The Property Crowd's trust account for the period that they are held. This interest is retained as an administration fee.

8. The Investment Process

1. Account activation

A simple two part process that allows you to invest on the Platform is described in Section 2 above.

2. Selecting a property

Browse all properties on the Platform. Each property will have information available to help you evaluate your potential investment decision. Photographs, Floor Plans, Valuation, LIM, Builders Report, Meth Report, Property Commentary, Rental Manager's Statements and Inspection Reports as well as other useful information (such as ROI ) are made available for each property.

3. Funding your account

Using your nominated bank account deposit funds into your account on the Platform ready to start the investment process. With a minimum investment value of $100 (to a maximum of 20% of the funding target) you are ready to start making your selection.

4. How your money is held

When you deposit funds into your account on the Platform your money will always be securely held in The Property Crowd's trust account. You will be able to see the money in your account when you log on to your dashboard on the Platform.

5. Investing in a property

When you choose to invest an amount in a property, that money is kept secure in The Property Crowd's trust account until the funding target for the property is met. When the property is fully funded the money leaves The Property Crowd's trust account to settle the payment due on the property. If the funding target for the property is not met by the deadline The Property Crowd has the option to:

  • Extend the deadline for investment.
  • Top up the investment to a maximum of 20% if it chooses to do so.
  • Refund the money back to your account on the Platform.

In the unlikely event that a property is withdrawn your money will be refunded to your account on the Platform.

When you buy PropertyShares* your money is deducted from your account on the Platform and is paid into the seller's account.

6. Settlement of a new property purchase

When a newly listed property is fully funded, our lawyers will be instructed to settle the purchase of the property and the SPV that will own the property will be established. Your money will be deducted from The Property Crowd's trust account and PropertyShares* in the SPV will be issued. The number of PropertyShares* that you purchased will show on your dashboard on the Platform.

7. Dividends

Dividends payable from rental income on a property (once costs have been deducted) are paid monthly to your account on the 5th day of every month. If the 5th day falls on a weekend or public holiday then your dividend payment will be made on the next available working day. Dividends are payable to those holding PropertyShares* at 12.00 am on the 1st day of every calendar month.

8. Withdrawing funds from your account

Withdrawing funds from your account on the Platform can be done at any time. You will be asked if any of your details have changed. Funds will be transferred to your nominated NZ bank account.

A record of your transactions and investments are accessible at all times on your dashboard on the Platform.

9. Appointment of proxy

If an SPV you hold PropertyShares in has 10 or more shareholders, you appoint the SPV's Chairperson as your proxy for the purposes of opting out of the requirement for the SPV's financial statements to be audited. The Chairperson will exercise your proxy vote to opt out of the requirement for the SPV's financial statements to be audited each year by signing a written resolution or voting at a shareholders' meeting. This is intended to reduce costs and increase returns. However, it means you will not have the same assurance about the SPV's financial statements.

You can revoke your appointment of the proxy at any time by giving written notice to the SPV. Unless you revoke the appointment of the proxy, the proxy's sole power is to vote in favour of opting out of the audit requirement each year. The proxy will not have any other powers in respect of that appointment.

9. Associates of The Property Crowd may invest in any property

Persons associated with The Property Crowd such as the directors, senior managers, employees and their families as well as people with which The Property Crowd has a business relationship may invest in properties offered on the Platform. Any such investments will not be disclosed by The Property Crowd to you or any other investor. If you do become aware that an associated person has invested in a particular property you should not rely on that fact when making a decision whether or not to invest in that property.

10. Variations to Investor Agreement

From time to time we may amend or supplement the terms of this Investor Agreement provided that such an amendment does not materially affect your existing rights. You agree that you will have been sufficiently notified of an amendment if you receive an email from us to notify you of that amendment. The most recent version of the Investor Agreement that appears on the Platform will govern at all times. If you cannot accept amendments to the Investor Agreement you should not invest through us.

11. Force majeure

The Property Crowd will not be in breach of this Investor Agreement nor liable for delay in performing, or failure to perform, any of its obligations under this Investor Agreement if such delay or failure results from events, circumstances or causes beyond The Property Crowd's reasonable control.

12. Consumer Guarantees Act 1993

Nothing in this Investor Agreement is intended to avoid the provisions of the New Zealand Consumer Guarantees Act 1993 except to the extent permitted by that Act (or to exclude liability arising under any other statute), if and to the extent that such liability cannot be lawfully excluded, and this Investor Agreement shall be modified to the extent necessary to give effect to that intention.

13. Warning Statement

Equity crowdfunding is risky.

You may lose your entire investment, and must be in a position to bear this risk without undue hardship.

New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision.

The usual rules do not apply to offers by issuers using this facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.

Ask questions, read all information given carefully, and seek independent financial advice before committing yourself.

By signing this Investor Agreement I confirm that I have read the above warning statement about crowdfunding.

14. General

This Agreement is effective once both parties have signed electronically.


* shares in a company that owns an investment property.