Synthetic Share Terms
Overview
This document explains the legal nature of synthetic shares, the rights they confer, and the protections in place during the fundraising phase.
Synthetic shares are issued during property fundraising before acquisition completes. They are not property ownership. They are contractual rights to receive property-backed tokens if and when OpenHouse successfully acquires the property.
What Synthetic Shares Are
Synthetic shares represent:
Participation in property fundraising campaigns
Contractual rights to receive property-backed tokens upon successful acquisition
Eligibility for treasury-funded yield during the fundraising period
What Synthetic Shares Are Not
Synthetic shares do not represent:
Ownership of any property or real estate
Shares in any Special Purpose Vehicle (SPV)
Legal or beneficial interest in property assets
Securities or regulated financial instruments under UK law
Guaranteed conversion to property ownership
Legal Classification
For legal purposes, synthetic shares constitute:
An executory contract between you and OpenHouse Technologies LTD
A conditional right to future token allocation
Participation in a property fundraising campaign
OpenHouse's position, based on legal advice, is that synthetic shares are not specified investments under the Financial Services and Markets Act 2000 and do not constitute a collective investment scheme under FSMA Section 235.
This assessment is based on UK law as of December 2025 and may change with regulatory developments. Regulatory treatment of digital asset offerings is evolving, and there is a risk that the FCA or UK courts may take a different view.
Client Fund Protection
All funds received during the synthetic phase are held in segregated client accounts separate from OpenHouse Technologies LTD operational funds.
These funds are:
Held on trust for investors
Not available to OpenHouse creditors in the event of insolvency
Subject to weekly reconciliation
Audited annually by third parties
Client funds may only be used for:
Property acquisition costs upon successful completion of raise
Legal and conveyancing fees related to property purchase
SPV establishment costs
Refunds to investors
Property Acquisition Process
Once fundraising reaches its target:
Synthetic yield stops
Tokens become locked for acquisition
OpenHouse has 90 days to complete property acquisition
Terms of acquisition are pre-agreed with seller or developer
If acquisition completes successfully:
SPV is formed or activated
Property title is transferred to the SPV
Token metadata updates from synthetic to real asset-backed status
The same tokens now represent fractional ownership in the property SPV
Rental income distributions begin
If Acquisition Fails
If property acquisition cannot be completed within 90 days for any reason, OpenHouse will either:
Roll funds over to the next qualifying property (users retain proportional share), or
Issue full refunds to all synthetic share holders
If full refunds are issued:
Refund amount equals original investment amount paid
Refunds processed within 14 business days of failure determination
No deductions, fees, or charges applied to refunds
Any yield paid during synthetic phase is not recoverable by OpenHouse
Refunds paid to original payment method or nominated account
Users will be notified of the chosen resolution within 5 business days of acquisition failure.
No Secondary Market
Synthetic shares cannot be sold, transferred, or traded during the fundraising period.
Your capital is effectively locked until:
Property acquisition completes (tokens transition to real asset-backed status), or
Acquisition fails (refund or rollover issued)
This may represent a period of several months.
Synthetic Yield
During the synthetic phase, OpenHouse may pay yield from treasury reserves to simulate intended property performance.
Important limitations:
Synthetic yield is discretionary and not contractually guaranteed
OpenHouse may reduce or stop synthetic yield at any time without notice
Yield rates are subject to change
Synthetic yield comes from OpenHouse treasury, not property income
There is no contractual obligation to maintain any specific yield rate
Your Rights During Synthetic Phase
You have the right to:
Receive regular updates on fundraising progress
View your synthetic share balance and transaction history
Claim any treasury-funded yield distributions
Receive clear disclosure of synthetic vs real asset status
Receive a full refund if acquisition fails (or rollover option)
Access segregated client funds in the event of OpenHouse insolvency
You do not have:
Any legal interest in property during fundraising
Voting rights or governance participation
Ability to sell or transfer synthetic shares
Guaranteed conversion to property ownership
Guaranteed yield payments
After Conversion to Real Asset-Backed Tokens
Upon successful property acquisition, your tokens automatically transition to real asset-backed status.
You then gain:
Fractional ownership in property-owning SPV
Legal and beneficial interest in property via SPV shares
Right to pro-rata rental income from actual property
Voting rights on specified SPV matters
Right to sell tokens on secondary market
Right to receive pro-rata proceeds if property is sold
Protection under SPV shareholder agreement
Risks
Before purchasing synthetic shares, you must understand these risks:
No property ownership:
You do not own any property during fundraising
You have no legal interest in real estate until conversion
Acquisition may fail:
Property acquisition is not guaranteed
You may only receive a refund or rollover if acquisition fails
Opportunity cost may be significant
Counterparty risk:
You rely on OpenHouse to complete acquisition
You depend on proper fund segregation and handling
OpenHouse insolvency could delay refunds
No liquidity:
Synthetic shares cannot be sold during fundraising
Your funds are locked until acquisition completes or fails
Synthetic yield not guaranteed:
Yield may be reduced or stopped at any time
Treasury depletion may result in zero yield
Regulatory uncertainty:
Legal classification is subject to interpretation
Future regulation may impact platform operations
See Risk Disclosure Statement for complete risk information.
Suitability
Synthetic shares are suitable only for investors who:
Can afford to lose their entire investment
Understand they do not own property during fundraising
Accept the risk of acquisition failure
Do not need liquidity during fundraising and acquisition periods
Have read and understood all risk disclosures
If you need guaranteed capital protection, immediate liquidity, or cannot afford potential losses, do not purchase synthetic shares.
Data Protection
OpenHouse processes personal data in accordance with UK GDPR and Data Protection Act 2018.
Personal data is collected for:
KYC/AML compliance
Transaction processing
Regulatory obligations
Data is retained for a minimum of 7 years as required by financial regulations.
See Privacy Policy for full details.
Governing Law
These Synthetic Share Terms are governed by the laws of England and Wales. Any disputes shall be resolved exclusively in the courts of England and Wales.
Changes to Terms
OpenHouse may update these terms to comply with legal or regulatory changes, improve clarity, or reflect operational changes.
Material changes require:
30 days advance notice to investors
Prominent notification on platform
Email to all synthetic share holders
Option to request refund if you object to changes
Continued holding of synthetic shares after notice period constitutes acceptance of changes.
Contact
For questions about Synthetic Share Terms:
Email: legal@openhouse.finance Address: 106 Flat 6, Lower Road, Hullbridge, Hockley, England, SS5 6DD
Summary
Synthetic shares are contractual rights to receive property-backed tokens upon successful acquisition. They are not property ownership.
Your funds are protected in segregated accounts. If acquisition fails, you receive a full refund or rollover option. If acquisition succeeds, your tokens transition to real asset-backed status representing actual SPV ownership.
Clear timelines, transparent disclosure, and legal protections ensure predictability throughout the process.
Last updated: December 2025
Last updated