RENT TO EARN AGREEMENT
Effective July 13, 2020.
Thank you for joining Rhove! Rhove’s software platform (the “Platform”), which includes a software-as-a-service mobile application (the “Rhove App”), is designed to address systemic challenges around housing affordability by providing eligible tenants living at participating properties, like you, with certain economic “stake” in the rental relationship.
By registering an account on the Platform, the user (“you”, “your” or “Eligible Renter”) accepts and agrees to the terms and conditions of this Eligible Renter Agreement (this “Rent to Earn Agreement” or “Agreement”) with Roost Enterprises Inc., Delaware corporation d.b.a Rhove (“our”, “us” or “we” or “Rhove”).
Terms of Service. By your registration of a user account on the Platform, you have agreed to our Terms of Service, which are incorporated herein by reference. To the extent there is conflict between the Terms of Service and this Agreement, the Terms of Service shall control. You hereby acknowledge that you have reviewed the Terms of Service and policies referenced therein prior to registering a Platform account.
Availability; Eligibility. Rhove currently operates two proprietary leasehold incentive programs: Rent Rewards and Rentership. The availability of Rent Rewards and/or Rentership depends on whether the lessor (the “Property Owner”) has elected to participate in either or both of Rent Rewards and/or Rentership pursuant to a separate Master Services Agreement (“MSA”) with Rhove. You are eligible to participate in Rent Rewards and/or Rentership as an “Eligible Renter” if (i) you have signed a minimum 12-month lease agreement with a Property Owner (a “Qualified Lease”); (ii) your Qualified Lease is in good standing; and (iii) you have registered a Platform user account, thereby accepting the terms and conditions of this Agreement. Details on the program(s) available at, and applicable to, your leasehold property (the “Rental Property”) will be provided upon account registration.
Rent Rewards. If your Property Owner elects to participate in Rent Rewards and you are an Eligible Renter, then you may participate in Rent Rewards.
Cash Match. Pursuant to a separate Fiduciary Deposit Account Agreement between you and Rhove, the terms and conditions of which are incorporated herein by reference, Rhove will establish an FDIC-insured bank account for your benefit (an “FBO Account”). If you deposit an amount equal to 2.5% of your monthly base rent into your FBO Account, then your Property Owner will deposit a matching amount into a separate Custody Account managed by Rhove (“Cash Match”).
Vesting. If you renew your Qualified Lease at least 30 days prior the expiration of the initial lease term, then the amount accrued as Cash Match will “vest,” meaning you have full right and title to 100% of the Cash Match. The vested Cash Match will be transferred from the Custody Account to your FBO Account beginning on the next month following the Qualified Lease renewal and on a monthly basis thereafter, provided that you continue to qualify for such Cash Match and subject to any applicable vesting schedule applicable to the Rental Property as detailed in the Rhove App. If you do not renew your Qualified Lease at least 30 days prior to the expiration of the initial lease term, then the amount accrued as Cash Match will not “vest,” meaning you forfeit all right and title to such amount, which will remain the Custody Account.
Acceleration. In the event Property Owner sells or disposes of your Rental Property prior to your Cash Match vesting, any unvested Cash Match shall be immediately vested and transferred to your FBO Account. Similarly, upon termination of this Agreement by Property Owner for any reason, all unvested Cash Match shall be immediately vested and transferred to your FBO Account.
Exception for Network Properties. If you do not renew your Qualified Lease with the Property Owner after the expiration of its term, your Cash Match will vest if you (i) provided the Property Owner with 30 days’ notice of lease termination and such lease was not in default; and (ii) you signed a new Qualified Lease agreement with another Rental Property that is both owned by the Property Owner and participating in Rent Rewards.
Access to Funds. You will have immediate access to and use of any funds that you deposit in your FBO Account, including any vested amount of Catch Match in your FBO Account.
Roommates. If you have one or more roommates that have also signed your Qualified Lease, then each roommate’s Cash Match will be determined based on a pro rata share of the applicable rental rate owed by you and your roommates.
Cash Savings. In addition to Cash Match, you may also establish and grow savings by making monthly cash contributions to your FBO Account via the Platform (“Cash Savings”). Rhove has successfully operated Rent Rewards since 2019, enabling Eligible Renters to build savings to meet short and long term goals, such as saving for a down payment on a home.
Rentership. As an extension of Rent Rewards, a Property Owner may also elect to participate in Rentership. For Property Owners, participation in Rentership is designed to increase Eligible Renter retention and decrease turnover costs. For Eligible Renters, participation in Rentership provides a contractual right to receive a future rebate on rent under a long-term leasehold.
Rentership Participation Pool. A Property Owner electing to participate in Rentership selects a percentage of a Rental Property’s appraised value as a “Rentership Participation Pool” measured in “Rentership Units” or “RNT,” and then selects an applicable annual rate payable on RNT (“Annual Rate” or “RNT Return”). If you pay a minimum amount as a participation fee (the “Participation Fee”) to Rhove, then you will receive a matching award of RNT at a rate of $1 per RNT in an amount not exceeding the Rentership Participation Pool. Each RNT stake represents the Property Owner’s commitment to pay you certain future rebates on rent on the terms set forth below, which in turn allows you to grow the value in your account and also participate in any growth in value of the Property at the time of a “Capital Event” (defined below).
Periodic Payments. Periodic payments are calculated by Rhove based on the number of RNT awarded from the Rentership Participation Pool (“Rentership Participation Pool Percentage”) on an annual basis at the Annual Rate, and are payable in four quarterly installments by the Property Owner to a custody account managed by Rhove (the “Custody Account”). Upon receipt, Rhove transfers a proportionate share from the Custody Account to your FBO Account, net of Rhove’s fees, effectively resulting in a rebate on the amount of total rent paid on a long-term leasehold.
Capital Event Payments. In addition to periodic payments, the Property Owner will make an additional payment into the Custody Account upon the occurrence of any sale or other disposition of the Rental Property, or any refinancing of existing indebtedness on the Rental Property occurring at least 12 months after the date of the Rental Property’s participation in Rentership, that would result in a distribution of cash proceeds to the equity owners of the Rental Property (a “Capital Event Payment”). Upon receipt, Rhove will transfer your proportionate share from the Custody Account to your FBO Account, net of Rhove’s fees, effectively resulting in an additional rebate on the amount of total rent paid on a long-term leasehold.
Calculation of Capital Event Payment. If the Capital Event Payment arises from the sale of the Rental Property, then the Capital Event Payment is calculated as the GREATER of $1.00 per RNT, or an amount determined by multiplying the net sales proceeds by Rentership Pool Participation Percentage, pursuant to which RNT are deemed satisfied and retired. If the Capital Event Payment arises from the refinancing of existing indebtedness, then the Capital Event Payment is calculated as the GREATER of $1.00 per RNT, or an amount equal to the “Redemption Amount,” which means fair market value determined by the third party appraisal used by the financing institution involved in the refinancing, and pursuant to which RNT are deemed satisfied and retired.
Maturity Date. If the Rentership Units have not been retired and satisfied within 360 months of the Property Owner’s commencement of the Rentership Program at the Rental Property, then the Rental Property shall be deemed to have undergone a Refinancing and such RNT shall be entitled to receive the Redemption Amount, following payment of which the RNT stake shall be deemed retired and satisfied.
Nature of Obligation. You hereby acknowledge and agree and Rhove hereby acknowledges and agrees that the economic rights of the awarded RNT stake are in the nature of a variable rebate or credit on rental amounts that you have previously paid, which is tied in part to the value of the Rental Property. Such economic rights are not necessarily limited to the amount of rent previously paid by you, and your rights to receive payments associated with RNT will survive any termination of your Qualified Lease until such RNT are retired and satisfied. Such rights represented by RNT shall be considered for all purposes as a general unsecured payment obligation owed by Property Owner to you. Although the intent of Rentership is to provide you with an economic interest in the growth in value of the Rental Property in which you reside, for avoidance of doubt, RNT do not represent a debt or equity interest in the Rental Property or Property Owner, nor do they provide any security interest in the Rental Property or any other collateral. Rhove’s service is designed to track these payment obligations through its ledger management services and facilitate payments by Property Owner and distributions of funds by Property Owner. Under no circumstances shall Rhove be liable for payment to you of any obligations owed by Property Owner, except to the extent of proceeds actually funded by Property Owner to its Custody Account.
Early Redemption. If you would like to sell your RNT stake before there is a Capital Event, you may use the Rhove App to sell your RNT to Rhove for an amount equal to $1 per RNT.
Transferability. Your RNT are transferrable, subject to approval by Rhove and compliance with applicable laws. In the future, Rhove may provide holders of RNT with the ability to freely transfer to other participants on the Rhove App. In all circumstances, transfers must be in compliance with all applicable laws, and Rhove may deny a requested transfer if, in its reasonable judgment, it determines that such a transfer would not be in compliance with applicable laws.
Account and Ledger Management. Rhove shall manage the FBO Accounts and ledgers for Rent Rewards and Rentership, as applicable, for each Eligible Renter. Through the Platform, you will have access to information regarding your FBO Account, Cash Savings, Cash Match, RNT awards, and availability of a Rental Property’s Rentership Participation Pool.
Rhove’s Fees. At this time, Rhove does not charge any fees to Eligible Renters participating only in the Rent Rewards Program. However, for participation in Rentership, Rhove will charge a transaction fee in an amount equal to $0.99 or 1.99% per transaction, whichever is greater, at the time of RNT sale and purchase. Rhove reserves the right to change the transaction fees charged to you, or impose additional fees, on a going-forward basis by providing you with 30 days advance notice, and only when such fees are allowed by law.
Limitation of Rhove Liability. Rhove is not responsible or liable for Property Owner’s failure to make payments in accordance with the Rent Rewards Program or Rentership Program. EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, NO OTHER REPRESENTATIONS AND WARRANTIES ARE GIVEN BY RHOVE AND THE SERVICES AND PLATFORM PROVIDED UNDER THIS AGREEMENT ARE PROVIDED "AS IS" AND "AS AVAILABLE," WITHOUT ANY REPRESENTATION OR WARRANTY, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT. EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, RHOVE MAKES NO REPRESENTATION OR WARRANTY THAT THE SERVICES WILL MEET YOUR REQUIREMENTS, BE CONTINUOUS, UNINTERRUPTED, OR ERROR-FREE. THIS DISCLAIMER OF WARRANTY SECTION SHALL APPLY TO THE FULLEST EXTENT PERMITTED BY LAW IN THE APPLICABLE JURISDICTION. Rhove will not be responsible for, nor liable hereunder in connection with, any failure in Rhove’s services to the extent resulting directly from: (a) any data or other content provided by you or by Property Owner or any of its agents; (b) your or the Property Owner’s negligent acts; (c) telecommunications or equipment failures outside of Rhove’s facilities and reasonable control; (d) scheduled maintenance; (e) unauthorized access, breach of firewalls or other hacking by third parties of the systems of Rhove’s banking partners; or (f) any act or omission by Property Owner with respect to any user data. In no event shall Rhove’s aggregate liability arising from or relating to this Agreement exceed the amount paid and/or payable by you to Rhove in the twelve (12) month period immediately preceding the event giving rise to such liability. In no event shall Rhove be liable to you for any indirect, punitive, special, exemplary, incidental, or consequential damages (including damages relating to loss of data, revenue, profits, use or other economic advantage) arising out of, or in any way connected with this Agreement, even if Rhove has been previously advised of the possibility of such damages.
Disclaimer. Rhove’s service provides a platform to facilitate Property Owner’s provision of economic incentives to Eligible Renters under the terms of a Qualified Lease. Both Rent Rewards and Rentership payments (where applicable) should be treated as a stake that entitles you to variable rebates or credits on rental amounts previously paid by you to Property Owner, which may exceed the rental amounts previously paid by you to Property Owner. Your participation in the Platform is not an investment, does not provide you with any equity ownership interest in any Rental Property or Property Owner, and does not constitute an offer to buy or sell securities. Rhove is not a landlord, real estate broker, mortgage broker or mortgage lender, broker-dealer, investment advisor, or holder of customer funds or other property. For further clarification, Rhove is not a registered broker-dealer or registered investment advisor and cannot offer investment advice or enter into any of the aforementioned relationships with Eligible Renters. By agreeing to these terms, no landlord-tenant relationship, lender relationship, brokerage relationship, advisory relationship or any similar agency or fiduciary relationship or duty is intended to be or shall be deemed to have been created between Rhove and you. Rhove makes no representations, warranties, covenants or guarantees of any kind that are not expressly contained herein.
Customer Support and Complaints. If you have any questions about this Agreement, or need customer support, please contact us at email@example.com or call us at 614-321-2421. Bank services are provided through our banking software provider, Synapse. To report a complaint relating to the bank services, email firstname.lastname@example.org.
Termination Upon Cessation of the MSA. Rent Rewards at your Rental Property will terminate upon the cessation of the MSA between Rhove and the Property Owner. If the Property Owner terminates the MSA, or if Rhove terminates the MSA as a result of an uncured material breach by the Property Owner, a refinancing may be deemed to have occurred and RNT may be retired and satisfied upon payment of the Capital Event Payment.
Termination Upon Change of Control. Rent Rewards and/or Rentership at your Rental Property may terminate upon an acquisition or change of control of the Rental Property or Property Owner, whether by operation of law or otherwise. An acquisition, assignment, or transfer includes a change of control of the Property Owner.
Notice. Rhove will use commercially reasonable efforts to notify you immediately of termination of Rent Rewards and/or Rentership at your Rental Property for any reason.
Voluntary Termination. Subject to survival of the RNT payment obligations under subsection (e) hereunder, this Agreement may be cancelled by either you or Rhove at any time. A notice of cancellation must be sent through the Rhove App or otherwise in writing to the either party with 30 days advance notice before the cancellation shall take effect. Upon termination, Eligible Renters with Cash Match that has accured but not vested, will immediately vest be transferred by Rhove from the Custody Account to your FBO Account. Upon termination for any reason, neither the Property Owner nor Rhove will be obligated to make future Cash Match payments to you under this Agreement.
Survival. Payment obligations associated with awarded RNT, if applicable, as well as other payment obligations accruing prior to the effective date of termination, shall survive termination for any reason and such amounts shall remain payable in accordance with the terms of this Agreement.
Controlling Law and Jurisdiction.
Choice of Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the state of Ohio, and shall be interpreted in all respects as an Ohio contract. Any dispute, controversy, claim or action arising from or related to this Agreement likewise shall be governed by the laws of Ohio, exclusive of choice-of-law principles.
Arbitration. In the event of a dispute between you and Rhove arising out of or relating in any way to this Agreement, such dispute shall be submitted to the American Arbitration Association and shall be resolved by means of arbitration by a single arbitrator. Arbitration shall be limited solely to deciding the merits of any controversy or dispute relating to the Agreement. Such arbitration shall be pursuant to the International Dispute Resolution Procedures of the American Arbitration Association and shall be conducted in Franklin County, Ohio, or such other location as you and Rhove may select by mutual agreement. The language of the arbitration shall be English. The arbitrators shall issue a reasoned award, and it shall be final and binding upon the you and Rhove and not subject to further appeal. The arbitrators shall be empowered to award money damages but may not award consequential, incidental, exemplary or punitive damages or order specific performance. You and Rhove hereby consent to the nonexclusive jurisdiction of the state and federal courts of Franklin County, Ohio, United States, for the enforcement of any arbitration award.
Class Action Waiver. You and Rhove agree that any party hereto may bring claims against the other only on an individual basis and not as a plaintiff or class member in any purported class or representative action or proceeding. No class arbitration is permitted, and no arbitrator may consolidate or join more than one person’s or party’s claims and may not otherwise preside over any form of a consolidated, representative, or class proceeding. Any relief awarded to any one Rhove user cannot and may not affect any other Rhove users.
Amendments. This Agreement, as amended, changed or updated, constitute a binding contract between Rhove and you. We will notify you of any amendments, changes or updates. Your non-termination or continued use of the Platform after the effective date of any amendments, changes, or updates constitutes your acceptance of the Agreement, as modified by such amendments, changes, or updates. You are solely responsible for regularly reviewing the Agreement and its modifications, amendments, changes or updates. You can review the most current version of the Agreement at any time at https://rhove.com/rent-to-earn-agreement/. If you do not wish to be bound by this Agreement, please do not access or use any part of the Platform.