Landa Faces Serious Challenges Amid User Concerns and Legal Struggles
The concept of investing in real estate with as little as $5 may appear attractive, but for many users of Landa, a proptech company that promised just that, the reality has been far from ideal.
Background on Landa
Founded in 2019 by CEO Yishai Cohen and former CTO Amit Assaraf, Landa aims to democratize access to residential real estate investments through fractional shares. The company launched from stealth mode in August 2022, securing $33 million in funding and opening investment opportunities to everyday Americans who are at least 18 years old and reside in the U.S. Through the Landa app, users could invest with a mere $5, buy and sell shares, and receive real-time updates about their properties. However, user experiences have led to escalating frustration and dissatisfaction.
Current Issues Faced by Users
Landa’s investment portal is currently inactive, and its app is unresponsive, leaving users unable to access their funds or receive dividends for several months. Reports indicate that over 130 complaints have been lodged against Landa with the Better Business Bureau. Numerous users have echoed similar grievances, including a case where a user invested over $8,000 and ceased receiving dividends last fall.
“I repeatedly inquired about my dividends, but the responses were vague and unhelpful,” one dissatisfied investor shared. “Subsequently, I found myself locked out of my account and unable to sell my shares.”
Legal Troubles
In addition to user complaints, Landa is embroiled in litigation with its primary lenders. Viola Credit and L Finance filed a lawsuit in November 2024 in New York State Supreme Court, alleging multiple defaults on loans exceeding $35 million. The lawsuit highlights Landa’s failure to make property tax payments, resulting in the forced sale of properties, neglect of assets, and even lack of rent collection.
Efforts by the lenders to resolve issues amicably led to Landa being replaced as the manager of properties, with an independent property manager appointed. An injunction was granted by the court to restrict Landa from accessing its bank accounts, complicating the company’s ability to operate.
Management’s Response
When questioned about the current state of affairs, CEO Yishai Cohen asserted the company’s commitment to restoring platform functionality and paying dividends, describing technical issues as server-related. Despite ongoing concerns from users, Cohen has not provided a definitive timeline for resolution.
In a statement, he affirmed, "We are aware of the issues currently affecting our platform and want to assure all investors that we are actively working to restore full functionality as soon as possible."
Broader Implications for the Fractional Real Estate Market
Landa is part of a growing trend where startups offer fractional real estate investing. However, many of these companies have faced challenges, particularly following the surge in mortgage interest rates in 2022. Competitors like Fintor and Nada have pivoted their business models in response to market conditions, while Arrived continues to operate successfully, having raised significant capital and offering diverse investment opportunities.
Conclusion
As of late May, Landa’s investor portal still displays a maintenance message, leaving many investors in limbo regarding their funds. Users and stakeholders are left wondering whether the company can navigate its current challenges and fulfill its promise of making real estate investment accessible to all.
For those who relied on Landa’s platform, the uncertain future raises important questions about the viability of fractional investing in the real estate sector.
