Owner FAQs

We use a multi-member manager-managed LLC. These LLCs are a unified front that represent and protect a group of buyers. Each LLC has its own bank account, tax ID number and holds title to the Pacaso Home.

The Home Operating Estimate is based on the previous year actuals and takes into account market-level and macroeconomic changes, as well as projected maintenance and capital projects. Pacaso Accounting reviews the Home Operating Estimate on a quarterly basis and makes updates, if needed, to provide the most up-to-date information and ensure the LLC is in good financial standing. Quarterly true-ups or one-time assessments may be needed to reconcile any overages or underages.

During periodic reconciliation processes, the Pacaso management team will determine if any increases are required based on the actual costs needed for the home. Any increase to cover operating costs will be communicated during the review, and backup documentation will be provided.

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

The Technology Systems Fee gives owners access to Pacaso’s SmartStay technology to make scheduling easy and equitable for every owner. This fee allows us to continue to support and invest in new product and service features via the Pacaso app.

Reserve funds are held in the individual LLC'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.

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

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

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.

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

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

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.

Legal expenses, to the extent incurred on behalf of the LLC, may be passed through to the owners as a Basic Expense of the LLC. Each home has a homeowners liability insurance policy of up to $11 million.

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

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 program manager of the home and self-manage the property.

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.

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.

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

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

Pacaso would step in and advocate on behalf of the LLC. However, this is very unlikely. Many second home markets are comprised of LLC-owned properties. We do not anticipate local zoning laws to change, given it would disrupt many households in many markets.

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

Owners have the right to use the reserve funds for replacing life-limited items (e.g., washers and 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).

Pacaso is responsible for paying property taxes and will provide an annual K-1 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.

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