🏛️ Token Holder Governance Guide
🧩 Your Ownership Rights
When you buy property tokens, you become a fractional owner of real estate. That ownership gives you governance rights over decisions affecting your investment.
Governance runs on-chain on Arbitrum One, so every proposal, vote and result is transparent and permanent.
📘 Overview
Through the PropertyGovernance smart contract, you can:
- 🛠️ Vote on property expenses: approve or reject repair and maintenance costs above the property's voting threshold
- 📄 Review contractor quotes: inspect the supporting documents before you vote
Whether a buyout of your property happens is not a governance vote. Holders decide that by choosing whether to sell into the buyout offer (see the Token Holder Buyout Guide).
The buyout premium is not a governance vote either. It is set by the SecondaryDAO administrator and any change takes effect only after a 30-day notice period (see "Buyout Governance" below).
⚖️ How Voting Power Works
Voting is token-weighted: 1 token = 1 vote.
- Your voting power is your token balance at the moment the proposal was created. The contract takes a snapshot at creation.
- Tokens you buy after a proposal opens don't add voting power to that proposal. Tokens you sell after it opens don't reduce it.
- To vote you must hold at least 1 token at the snapshot and be KYC-verified with a whitelisted wallet.
- Each wallet votes once per proposal, YES or NO. Votes are final once submitted.
🗳️ Types of Proposals
🔧 Expense Proposals
When the property manager needs to spend reserve funds above the property's voting threshold, a proposal is created automatically.
| Category | When it applies | Voting period | Minimum participation |
|---|---|---|---|
| 🚨 Emergency | Flagged urgent by the property manager (any amount) | 3 days | 5% of tokens |
| 🧹 Small | Under $5,000 | 7 days | 5% of tokens |
| 🛠️ Maintenance | $5,000 to under $10,000 | 7 days | 10% of tokens |
| 🏗️ Major Change | $10,000 and up | 14 days | 25% of tokens |
Note: Routine expenses below the property's voting threshold are handled directly by the manager.
🧮 How Approval Works
Expense proposals
A proposal passes only if all three of these are true:
- Minimum participation is reached: enough tokens voted (5%, 10% or 25% of all tokens, by category), and
- More than 50% of the tokens that voted are YES, and
- Enough different wallets voted YES — the distinct YES-voter floor, explained below.
If participation is too low, or the YES-voter floor isn't reached, the proposal fails automatically.
Example
A property has 10,000 tokens. A $6,000 maintenance proposal needs 10% participation, which is 1,000 tokens.
| Tokens voted | YES | NO | Result |
|---|---|---|---|
| 800 (8%) | 700 | 100 | ❌ Fails: not enough participation |
| 1,200 (12%) | 500 | 700 | ❌ Fails: majority NO |
| 1,200 (12%) | 650 | 550 | ✅ Passes: participation met and majority YES |
🧑🤝🧑 The distinct YES-voter floor
Token-weighted participation on its own lets a handful of large holders carry a proposal between them. So a proposal also has to clear a minimum number of different wallets voting YES. It puts a floor on how many separate holders have to agree, not just how many tokens.
The floor is min(10, 10% of eligible holders, rounded up) — always the smaller of the two, so it can never grow beyond reach.
How the floor scales (eligible holders → different wallets that must vote YES):
-
6 holders → 1 YES voter
-
10 holders → 1
-
11 holders → 2
-
60 holders → 6
-
100 holders → 10
-
400 holders → 10 (the cap holds it there)
"Eligible holders" is the property's holder count at the moment the proposal is created, minus SecondaryDAO's own contracts that hold tokens: the sale escrow, its trading contract, the buyout registry, the reserve fund manager, the deposit manager, the distribution manager, the compliance escrow and the treasury. Each of those is subtracted once, even where one address fills two of those roles.
A few details worth knowing:
- 🔒 The number is fixed when the proposal is created. Holders joining or leaving the property afterwards don't move it.
- ✅ Only distinct YES voters count. NO votes don't count toward the floor.
- 🚫 If a property has no eligible holders at all, no proposal can be created.
- ℹ️ The holder count isn't filtered by KYC status, so a holder whose KYC has lapsed is still counted even though they can't vote. That makes the floor slightly stricter than intended — never looser.
Example
A property has 40 eligible holders, so the floor is 4. A $6,000 maintenance proposal reaches 12% participation and 60% of the tokens that voted are YES — but every one of those YES votes came from just 3 wallets. The proposal fails: participation and majority were met, the YES-voter floor was not.
🏗️ How Expense Proposals Are Created
- 🧭 Manager identifies a need (e.g., roof repair, HVAC replacement)
- 📑 Quotes collected: at least 2 contractor quotes
- 📝 Requisition submitted with description, cost and documents
- ⚙️ System checks the threshold and creates a proposal if a vote is required
- 🔔 Token holders notified, and voting opens
🚀 What Happens After Voting
If the proposal passes
- Status → Executed
- 💸 Funds released from the property's reserves
- 🛠️ Work authorized
- 🧾 Result recorded on-chain
If the proposal fails
- Status → Failed
- No funds released
- The manager may revise and resubmit
- All documents stay on record
🧾 What You Can Review Before Voting
- 📘 Description of the work
- 💵 Amount (in USDC)
- 🔗 Quote links
- 🧑💼 Property manager information
- 🏷️ Proposal type
🏦 Reserve Funds
Each property keeps reserve accounts funded at the initial token sale:
| Reserve type | Purpose | Replenishment |
|---|---|---|
| 🛠️ Initial Maintenance | Routine upkeep | From rent |
| 🏘️ Vacancy Reserve | Cover vacancy shortfalls | When rent resumes |
| 🧱 Deferred Maintenance | Known issues at launch | Not replenished |
Approved expenses don't require extra contributions from you. Funds come from reserves.
🏷️ Buyout Governance
🤝 What Is a Buyout?
A compliance-approved buyer offers to purchase all tokens of a property at one price per token.
- Holders decide by selling (tendering) into the offer. If holders of 51% of the tokens the buyer does not already own tender before the deadline, the remaining holders are bought out at the same price.
- Tendering is a final sale. If the 51% threshold is not reached, the offer expires, the buyer keeps the tokens already sold, and everyone else keeps theirs.
💰 The Buyout Premium
The buyout premium (also called the exit premium) is a fee the buyer pays to SecondaryDAO, on top of the offer price, on the tokens they acquire.
- It is not paid to token holders and does not change the price per token you receive.
- The range is 5% to 50%. The rate in force when an offer is created is locked for that offer.
- It is set by the SecondaryDAO administrator. A change is announced in advance and takes effect only after a 30-day notice period; it is not a token holder vote.
Example
Offer price = $100 per token, premium = 10%. You receive $100 per token, minus the platform fee. The buyer pays $100 per token to holders plus $10 per token to SecondaryDAO.
⏱️ Timeline Reference
| Stage | Duration |
|---|---|
| Emergency voting | 3 days |
| Small and maintenance voting | 7 days |
| Major change voting | 14 days |
| Buyout premium notice period (admin-set, not a vote) | 30 days |
❓ Frequently Asked Questions
🗳️ Voting
What if I miss a vote? The proposal is decided by the tokens that voted. If participation is too low, it fails.
Can I change my vote? No. Votes are final once submitted.
How will I be notified? Through platform notifications and email.
What if I buy tokens after a proposal opens? Voting power comes from your balance when the proposal was created, so new tokens don't count for that proposal.
👥 Participation
Do I have to vote on everything? No, but participating gives you a say.
Do more tokens mean more votes? Yes. Voting is token-weighted: 1 token = 1 vote, based on your balance at the proposal snapshot.
What if I own tokens in multiple properties? You vote separately in each property.
📄 Proposals
Can I create a proposal?
Expense proposals are created from property manager requisitions, not directly by holders.
Are votes public? Yes. Votes are recorded on-chain.
🔐 Security & Transparency
- 🔗 On-chain proposals, votes and results
- 🧑💼 KYC-verified, whitelisted voters only
- 📸 Snapshot voting: voting power can't be bought after a proposal opens
- 📑 Multiple-quote requirement for expenses
- ⏳ Fixed voting periods
🆘 Getting Help
- About a proposal: review its details and documents
- About voting: contact support@secondarydao.com
- Technical issues: check your wallet and KYC status
This guide describes the PropertyGovernance smart contracts deployed on Arbitrum One.
Last updated: September 17, 2026
Policies and procedures are updated frequently. Please check back for the latest information.