Terms & Condition
Investor Terms and Conditions
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THIS DOCUMENT (the Agreement) sets out the terms and conditions on which we,
Kircha (which is the trading name of Kircha Fractional Real Estate, Kircha, us, or we),
enable you to invest in properties via our Platform (http://www.kircha.et or any variation
of kircha.et) (the Platform). Please read these terms and conditions carefully before
using the Platform. If you do not agree with our terms and conditions, please
discontinue using this Platform. Kircha is an operator of a real estate crowdfunding
platform.
References to we/our/us are to Kircha. Kircha will incorporate, and administer on your
behalf, an Intermediate Special Purpose Vehicle (SPV) to hold your investment interest
in a property (a Property being an apartment, villa, or house that investors may invest in
or have invested in). References to you/your are references to the user of the Platform
for the purpose of investing in Property.
By continuing to use the Platform, you agree to be bound by these terms and conditions
and the following policies:
1. Kircha Cookie Policy available here
[http://www.kircha.et/cookie-policy/]
2. Kircha Privacy Policy available here
[http://www.kircha.et/privacy-policy/]
3. Kircha Platform General Terms of Use available here
[http://www.kircha.et/acceptable-use/]
In addition, you acknowledge and agree that you have read and understood the Key
Risk and disclosure detailed in the Knowledge Hub on our Platform.
If you enter into the Agreement as an authorised representative of a partnership,
company, or other non-individual entity, you warrant that you are duly Authorised to act
on its behalf.
Kircha is a company based at [www.kircha.et](http://www.kircha.et). Kircha is authorized
and regulated by the Ethiopian Capital Market Authority for the purposes of Operating a
Crowdfunding Platform.
1. BACKGROUND
1.1 Kircha manages the Platform. The principal role is to act as a facilitator to bring
together prospective investors and sellers of property.
The role of Kircha is to act as a facilitator to bring together prospective investors and
sellers of property, to coordinate and facilitate the funds transactions (as set out in this
agreement or any other applicable terms) in coordination with third parties. Other than
those activities you authorize us to carry out, we do not perform decision-making
functions, and you shall retain discretion over whether or not to sell a property, as well
as other aspects of your participation on the Kircha Platform.
The Platform provides information on properties which you may elect to invest in by
acquiring shares (each a "Share" and together, the "Shares") in an SPV established for
the sole purpose of acquiring and owning an individual property. Kircha will administer
and manage the SPV for you within limited parameters under an administration
agreement (the "Administration Agreement"). The form of the Administration Agreement
is set out in Schedule 1 to this Agreement.
By agreeing to the terms of this Agreement, you are hereby agreeing to the terms of the
Administration Agreement.
1.2 We will conduct fundraising rounds (each an "Investment Round") through the
Platform, pursuant to which we will seek to secure a pre-agreed minimum amount for
each property from various investors (the "Total Funding Target") in exchange for the
Shares. The Total Funding Target will be the sale price of the property as agreed
between us and the seller of the property (the "Seller"). Kircha will verify the sale price
of each property with an independent valuer, who will provide a full report on each
property together with all costs and fees that will arise in the acquisition of the property,
as well as any forecasted expenses. The Total Funding Target, along with all expenses
pertaining to the purchase of each property, will be set out in detail on the Platform.
1.3 You agree to invest money in exchange for a percentage of the Shares issued by
the SPV, conditional on the Total Funding Target being achieved. By subscribing for
SPV shares in an Investment Round, you confirm you understand and agree to the fees
and charges that have been notified to you on the Platform. You will need to reconfirm
your commitment at the point of funding. If you have any questions about the funding
process, please contact [info@kircha.et].
1.4 If the Total Funding Target is achieved and the Investment Round completes, you
will be allocated shares in an SPV that will own the property. If the Total Funding Target
is not achieved within the relevant time period, all committed funds will be returned to
your Kircha Account without deduction of any fees or expenses. You can then choose to
use the returned funds towards another property or withdraw the funds from your Kircha
Account entirely. Please note that if you initiate a withdrawal of funds from your Kircha
Account via the Platform, we will return your funds to the bank account that you used to
fund your Kircha Account. Your Kircha Account is a segregated account, as further
detailed in Section 8 below.
1.5 We accept no responsibility and disclaim all liability for any information about a
property made...
1.6 Any information about a property made available to you through the Platform is
provided for guidance only.
2. THE INVESTMENT & PREORDER TERMS
2.1 You agree to invest money in exchange for Shares relevant to the property you are
interested in, on the terms and subject to the conditions set out in this Agreement. Each
Investment Round will include an indicative term for holding the property (the
"Investment Term"). Prior to the end of the Investment Term, we will undertake a
valuation of the property, and you will be asked to vote on whether you want the SPV to
sell the property or extend the Investment Term. Please refer to Section [71] for details
on this voting process. At the launch of each Investment Round, Kircha will appoint a
Property Manager for each property (the "Property Manager"). The details of the
Property Manager will be provided via the Kircha platform. Where the Property Manager
believes it to be necessary, owing to market conditions, to amend the Investment Term,
we will advise you accordingly and provide you and your co-investors an opportunity to
vote to amend the Investment Term. An amendment to an Investment Term may result
in the sale of a property earlier or later than previously agreed.
2.2 You will agree to the initial proposed Investment Term and the Property Manager
prior to making any investment in a property via the Kircha platform.
2.3 In making an investment, you agree that you have done so solely based on
information contained on the Platform, together with any independent knowledge that
you may have and professional advice that you may have received. Nothing we have
done, nor anything that is on the Platform, is to be construed as advice or a
recommendation by us in relation to an investment. You agree that you have complete
control and discretion as to whether or not you invest through the Platform.
2.4 By selecting a property to invest in through the Platform, you agree to invest in such
property...
through the ownership of Shares. We will combine your transaction to purchase Shares
with other investors that have also purchased Shares in the relevant SPV.
2.5 Investment in real estate is speculative. The market value of a property can fall, and
rental income is not guaranteed. You must be prepared to invest for the full investment
period, owing to a lack of market for the property interest. You also acknowledge that it
may be difficult to sell the property at the end of the Investment Term.
2.6 Your percentage of Shares will be calculated in relation to the value of the property,
less all other acquisition costs and fees which will arise in the acquisition of the property.
For example, if the Total Funding Target is ETB 500,000 and you have invested ETB
5,000, excluding fees related to completing the purchase of the property, you will
acquire 1% of the Shares.
2.7 The purchase and transaction costs include but are not limited to Kircha fees and
statutory fees. These fees could involve local government fees (such as property
transfer fees and other necessary deposits), as well as brokerage fees. These costs are
calculated separately and have no bearing on your ownership percentage in the SPV
and therefore the property. These costs are calculated in proportion to the percentage of
Shares you own in the relevant SPV.
2.8 Kircha has the discretion to reduce the Total Funding Target at any time if it
reasonably considers this is in the interest of investors (in the event, for example, that a
reduced sale price is negotiated with the seller).
2.9 Completion of an investment will be conditional on the following:
(a) The Total Funding Target being raised during the Investment Round;
(c) The Seller completing the sale of their property to the SPV; and
(d) Kircha not having exercised its discretion to terminate any property acquisition
process.
2.10 Kircha reserves the right not to list a property for sale, to decline investment
requests, and/or bid requests via its Platform at its sole discretion.
2.11 No single investor will be entitled to secure more than 24.99% of a given
investment opportunity.
3. MATERIAL CHANGES
3.1 A Material Change means any change or new matter that may significantly affect
the value of the property, the ability to rent the property, the return on the property, or
the value of the investment.
3.2 If a Material Change occurs during the commitment period, Kircha will disclose
prominently on its Platform details of the Material Change; notify committed investors of
the Material Change and require them to reconfirm their commitment within 5 business
days; and if reconfirmation is not provided within 5 business days, cancel the
commitment.
3.3 The commitment period is the period from your investment in the property on the
Platform until the transaction is completed, meaning the property has been transferred
from the Seller to the SPV.
3.4 If a Material Change occurs after the commitment period, Kircha will disclose
prominently on its Platform details of the Material Change; any change in the rights of
investors arising from the Material Change; and what steps, if any, Kircha is proposing
to take as a result of such change.
4. RETURN ON YOUR INVESTMENT
4.1 Once you have made an investment and purchased Shares, any distribution you
receive from the Shares will be paid to you and placed in a third-party escrow account
operated by Commercial Bank of Ethiopia. The balance of this account will be visible to
you on the Platform as available funds. Subject to our satisfaction with your current
compliance with our Know Your Customer (KYC) and anti-money laundering processes,
you may choose to withdraw this money at any time or reinvest in other properties in a
similar manner as set out in this Agreement.
4.2 We wish to draw your attention to the risks related to investing in Shares, which can
be found on our Platform. Please note that the distribution of rents depends on many
factors (such as the presence of a tenant for the property). The value of Shares may go
down as well as up, and past performance of any investment is not an indicator of future
performance, nor is a forecast a reliable predictor of future returns.
4.4 In the event of legal action and where fees to recover amounts are incurred, you
and your co-investors will bear the cost. An attempt to reclaim all legal fees from the
tenant will be made with a view to repaying you and your co-investors.
4.5 You may have to pay other taxes or costs, which are not imposed by us. You should
seek your own independent tax advice where necessary.
5. SPV
5.1 Kircha will form an SPV for the purposes of holding your investment. You will hold
Shares in the SPV.
5.2 By entering into this Agreement, you confirm that the SPV will be managed by
Kircha under the Administration Agreement, subject to the articles of association for the
SPV (the "Articles").
5.3 Pursuant to this Agreement, you authorize Kircha and its Directors to sign any
related documents for the SPV, including but not limited to articles of association,
relationship declarations, transfer of shares, special/ordinary shareholder resolutions,
divestment of investments, and the appointment of authorized signatories on your
behalf.
5.4 The form of the Articles of the SPV is available on your personal dashboard,
accessible through the Platform, and included in Schedule 2 of this Agreement.
5.5 You acknowledge and irrevocably agree that you shall not be entitled to direct the
management of the SPV as a result of your ownership of Shares, including any direction
to transfer or otherwise dispose of those Shares, other than as set out in this
Agreement, the Articles, and the Administration Agreement.
6. ANTI-MONEY LAUNDERING (AML)
6.1 Money laundering is the process of disguising illegally obtained money to make it
appear to come from legitimate sources or activities.
Money laundering occurs in connection with a wide variety of crimes, including illegal
arms sales, drug trafficking, robbery, fraud, racketeering, securities fraud, and terrorism.
For simplicity, a reference to "money laundering" also includes terrorist financing, the
financing of illegal organizations, and proliferation financing.
6.2 As per the Ethiopian Capital Market Authority (ECMA) AML Rules and in
accordance with Ethiopia’s Federal AML Laws, Kircha has implemented a robust
Anti-Money Laundering (AML) framework to ensure that Kircha mitigates the risk of
money laundering or terrorist financing activity through its platform. Kircha's AML
framework includes, but is not limited to, the designation of a Money Laundering
Reporting Officer, employee AML training, and the implementation of a Customer Due
Diligence process. We use our own internal guidelines and policies when assessing
investor applications. As part of the customer due diligence process, Kircha may require
you to provide documentation in order to verify your identity and your sources of wealth
and income. We may require you to send us certified copies of various documents as
part of this process to ensure compliance with all necessary "know your customer"
(KYC) and other similar checks under applicable laws and regulations. Until you provide
the required information or documents and until your identity has been verified, you may
not be able to open an account or effect any transactions through the Kircha platform.
6.3 A prospective client shall not be considered a client of Kircha if all internal checks
have not been duly satisfied. We reserve the right to close any relationship with a
prospective client that has not been approved by us and has been pending for a period
of three months. Please note that Kircha is under no obligation to provide any reason for
not accepting a prospective client.
6.4 We do not accept joint account holders. Funding from a joint account will only be
accepted if there is a documented relative relationship between the individuals.
Relevant documentation must be provided to prove such a relationship. Please note
that when a deposit is made from or a withdrawal is requested to a joint account, we
reserve the right to seek identification documentation and profile details of all joint
account holders.
6.5 Dormant Account - An account may be considered inactive if there has been no
investment activity in the account for the prior 24 months. We reserve the right to
charge a fee to cover the cost of ongoing administration and KYC processes. If the
balance in the account is less than the prescribed charges, Kircha reserves the right to
terminate the relationship after issuing a notice of termination.
7. YOUR MONEY
7.1 The Platform allows you to fund your Kircha Account, which can then be used to
purchase Shares via the Platform. Until such time as you invest the money you transfer
to us to purchase Shares or commit to purchase Shares, it will remain your money and
(subject to completion of know your customer and anti-money laundering processes)
can be withdrawn by you at any time.
7.2 We may suspend or place limitations on your Kircha Account at any time if we
believe it is appropriate to comply with our legal or regulatory obligations or the terms of
these Investor Terms. This may include periods where we need to obtain additional
client identification documents and/or if your country of residence changes to a
jurisdiction outside of which Kircha does business.
For more details about how we use your information, please refer to our privacy policy
at [www.kircha.et/privacy-policy/](http://www.kircha.et/privacy-policy/)
7.3 We shall hold any money we receive from you in accordance with the Ethiopian
Capital Market Authority's rules, which require that we hold client money (a term used
interchangeably with client monies) in a client bank account segregated from our own
funds.
7.4 Client Money is held by Kircha in a segregated Client Account with Commercial
Bank of Ethiopia. Whilst Commercial Bank of Ethiopia is accountable to Kircha for the
safe keeping of its client money, Commercial Bank of Ethiopia does not have a
relationship with Kircha's clients directly. Therefore, Kircha is wholly accountable for our
investors' client money. Kircha has undertaken due diligence of Commercial Bank of
Ethiopia's custodial systems and controls and deemed them fit and proper to hold client
money on Kircha's behalf.
7.5 Clients of Kircha are subject to the protection conferred by the Ethiopian Capital
Market Authority's Client Money Provisions and as a consequence:
(a) this Money will be held separate from Money belonging to Kircha; and
(b) in the event of the Authorised Firm's insolvency, winding up, or other distribution
event stipulated by the Ethiopian Capital Market Authority, the Client's Money will be
subject to the Authority's Client Money Distribution Rules.
7.6 Interest on Client Money is not payable to you as a Client of Kircha.
7.7 As noted above, Client Money might be held in Ethiopia, outside the jurisdiction of
the Ethiopian Capital Market Authority, and the market practices, insolvency, and legal
regime applicable in that jurisdiction may differ from the regime applicable under the
Authority.
7.8 We shall exercise due skill, care, and diligence in the selection, appointment, and
periodic review of any credit institution or bank (other than a central bank) where the
client money is deposited and for the arrangements for holding the client money, but we
shall not be responsible for any acts, omissions...
7.8 We shall not be responsible for any acts, omissions, or default of any such credit
institution or bank.
7.9 You acknowledge and accept that your money may be pooled with money belonging
to other clients, which means that you will not have a claim against a specific sum in a
specific account, but against the client money pool in general.
7.10 You will be able to review your Kircha balance via your personalized dashboard on
the Platform.
7.11 You will be free to transfer funds into the Client Monies Account by bank transfer or
using your debit card. You cannot make cash deposits. We require you to use an
account held with an Ethiopian or international bank and which is maintained in your
sole name or jointly with another person, or in the name of the business or organization
you represent, with an National ID Number number or foreign equivalent.
7.12 You may only withdraw funds from your Kircha Account in excess of the minimum
investment amount. Funds may only be paid into your specified Ethiopian or
international bank account with a valid National ID Number number (or foreign
equivalent) and which is maintained in your sole name or jointly with another person.
7.13 The funds will be wired to you in the respective currency of your Kircha Account.
We bear no responsibility for any foreign exchange losses or any fees charged by your
bank or any correspondent bank. Kircha may proceed with the instructions as soon as
practically possible and reserves the right to require additional confirmations,
representations, and documentation as regards transactions to close the client account
or an instruction to withdraw the funds. Kircha shall not be liable for delays due to such
deferral or refusal.
7.14 During the period between the Property moving to the Resale market and the
Property Manager securing tenants, you may accrue an amount equivalent to the
respective Rental Yield on the amount invested in shares in the Property (again, on a
pro-rata basis). This amount will be paid directly into your Kircha account for the month
the benefit accrued, on the 5th of the following month (or the next business day if the
5th of the month falls on the weekend or a bank holiday). Note that if you sell your
shares during this period, you will lose any entitlement to this benefit.
7.15 Erroneous Transactions - We reserve the right to debit your account with any funds
erroneously credited due to computer system error, technical error or malfunction,
human error, payment system error, or any other reason without any liability or claim
arising against Kircha.
7.16 Kircha shall not be liable for any act or omission of any paying bank or
correspondent bank or for any error or delay in the transmission of payment.
