Owner FAQs

Limited company co-ownership

• Can Pacaso raise the monthly home operating estimate?

  All operating expenses are passed through at cost, and all cost statements are available to owners upon request. Pacaso cannot increase its fees without cause. As the limited company manager, we will only increase what is collected from owners as necessary to cover a change in household expenses (e.g., an increase in insurance rates).

• Does the Pacaso program management fee go up each year?

  No, our management fee is a fixed €199 per month.

• Can Pacaso make changes to the owner operating agreement?

  Material changes require an ownership vote. Pacaso has limited authority to make non-material changes (e.g., change of address for local government reporting purposes) on behalf of the ownership group.

• Where do the reserve funds go and how are funds used?

  Reserve funds are held in the individual limited company's bank account, managed by Pacaso. Funds are only used for the home’s repairs and maintenance. When the need for a major repair arises, Pacaso will allocate funds after a transparent competitive bid process.

• What services are provided for Pacaso second home owners?

  Pacaso provides an array of services, including ongoing maintenance and property management; aggregating and managing monthly owner expenses and taxes; overseeing the limited company and resolving any disputes; continually innovating and improving the Pacaso app and other digital technology; and providing dedicated owner support, 365 days a year.

• Can Pacaso borrow against the property’s limited company?

  Other than for the purpose of securing a mortgage for the owners, Pacaso can not borrow against or encumber the limited company in any way.

• How does voting work? How do owners call for a vote?

  Every share owned holds a vote. Owners can bring major issues about their home to a vote of the group (e.g., a decision to upgrade the sound system). To call for a vote, notify your Pacaso Home Manager.

• What kind of limited company does Pacaso create?

  The exact type of limited company depends on the country; for example, in the USA it's an LLC, and in Spain it's an SL. These limited companies are a unified front that represent and protect a group of buyers. Each limited company has its own bank account, tax ID number and holds title to the Pacaso home.

• Is Pacaso ownership the same as a Tenancy in Common (TIC)?

  No. With a TIC, each owner’s name is on the deed, which requires a formal real estate completion and recording of a new deed each time a share is sold. With Pacaso, owners purchase a share in a property-specific limited company, and the limited company is the singular deeded owner of the home. The limited company structure is widely adopted for residential and commercial real estate.

• Can owners use a limited company trust to purchase their Pacaso?

  Yes. Owners can close under a limited company trust or use their legal name, subject to compliance with the details in the Pacaso Home Documents.

• What if another owner defaults? How does Pacaso protect me as an owner?

  Pacaso serves as the corporate guarantor of any share financing, protecting you should another owner default. In the unfortunate event of an owner default, Pacaso will step in to service the loan. If not resolved within 90 days, we will foreclose on that specific share and manage the resale without any disruption to the ownership group.

• Does Pacaso pay the legal fees if the limited company is sued?

  Legal expenses, to the extent incurred on behalf of the limited company, may be passed through to the owners as a Basic Expense of the limited company. Each home has a homeowners liability insurance policy.

• Can an individual owner be held liable?

  Generally, to the extent such costs are not covered by insurance, the limited company indemnifies owners acting on behalf of the limited company in good faith and in accordance with the limited company operating agreement. Owners who act on behalf of the limited company with gross negligence or willful misconduct, or violate the terms of the limited company operating agreement, will not be indemnified by the limited company.

• Can owners decide to run the limited company without Pacaso?

  Pacaso works at the service of its owners. If owners decide that Pacaso is not providing adequate service, the owner group can vote to remove Pacaso as the programme manager of the home and self-manage the property.

• Can Pacaso stop me from selling?

  No, owners may sell at any time once all other shares of their Pacaso have been sold. You set your own price, and Pacaso will list and market your share much like a whole home sale.

• Can Pacaso sell the entire property?

  Pacaso can sell the entire property in the unlikely event that more than three shares are in default for more than 90 days, and the shares fail to sell for the loan-to-value ratio of 50%. Before a property can be sold, each owner will have the right to purchase the defaulted shares at a discount.

• What is considered a “routine matter” that Pacaso can resolve without ownership voting?

  Routine matters are minor repairs to keep the home in owner-ready condition. Examples are ongoing home maintenance like winter-proofing a deck or replacing a broken dishwasher.

• Who is responsible if something breaks?

  Owners are not individually responsible for life-limited items that eventually need repair or replacement, like a dishwasher; those are paid for by the limited company reserve fund. However, each owner is responsible for replacing or repairing items damaged as a result of their actions, such as a broken window.

• Can owners themselves borrow against their share in a Pacaso?

  No, this is not permitted per the terms of our operating agreement.

• How can owners use the reserve funds?

  Owners have the right to use the reserve funds for replacing life-limited items (e.g., washing machines and tumble dryers or roofs) and/or can request a vote to use funds to add or replace items in and around the house (e.g., upgrading the sound system).

• How do taxes work?

  Pacaso is responsible for paying property taxes and will provide an annual partnership tax form for each owner. Funds for taxes are included in the owner operating expenses. We are not tax professionals and suggest you consult with a professional for more information should you wish.

• How is the deed recorded?

  The deed for each property is recorded in the name of a property-specific limited company. Each owner holds their interest through the limited company, which provides for both privacy and liability protection.