How Does The Voting Procedure Work On Max Crowdfund?

How Does The Voting Procedure Work On Max Crowdfund?

You may have recently received an email from us about a loan extension and be wondering what this is and how it works. In this article, we will provide you with more clarity about the voting procedure on Max Crowdfund, why it is important and how to proceed with it. 

Why is voting necessary?  

Loans on Max Crowdfund have an end date, when project developers are obliged to return the investors’ money to them. Most projects that appear on Max Crowdfund are renovation, construction or repair projects, which may sometimes encounter delays due to unforeseen circumstances. 

The real estate industry has been affected by supply chain issues for construction materials, global inflation and shipping delays. We have written a more detailed account of this, which you can read here.

 As a result, the property industry as a whole is experiencing some setbacks, which sometimes result in project delivery delays. On the rare occasion that this happens, Max Crowdfund has controls in place, one of which is the voting procedure. 

If a loan on the Max Crowdfund platform is delayed and the developer requires an extension to complete their project, the investors in that project have the power to grant the developer more time.  This is done via a voting procedure, sent to all the participants in the loan via email.   

How does voting work?  

In the unlikely case that a project owner requests an extension on a loan, the developer is required to provide Max Crowdfund with the reason for the delay, which is passed on to the participants in that loan. 

Our clearly defined loan conditions require project owners to inform all parties of any delays (see our article on Max Crowdfund revised loan conditions) and the borrower to request an extension no less than one month before the repayment due date.  

Once a loan request has been submitted, the decision is put to a vote by the loan participants, as stated in the Max Crowdfund general terms and conditions (see article 25).  

The voting round is held online and sent to investors via email. The email contains all the applicable information, including what would happen in the event of either a positive or negative vote. Investors can then indicate whether they agree to the loan extension or not. All votes are weighted pro rata and, after the poll is closed, the votes are counted to see whether or not the majority of investors agree to an extension. The project owner and the investors are then notified accordingly.  

Are there any exceptions? 

If an extraordinary situation requires an immediate decision, Max Crowdfund may decide on behalf of all parties, but only if and when the interests of the investors are at stake. This is at the discretion of Max Crowdfund, whom would inform the investors fully as soon as possible.  

Do I have to vote? 

It is not obligatory to vote, but the more participants vote, the more democratic the decision will be.  

We hope that this article clarifies the loan extension voting procedure. These articles are created in the spirit of transparency and in response to real platform users' questions. If you have a suggestion for a topic that needs clarification, please let our customer service know.