|As a Tenant in Common TIC and 1031 exchange investment fraud attorney, I obtain financial recovery for client’s lost investments, and and investment problems. My firm has obtained millions of dollars in settlements and judgments for my clients who were sold bad TIC and 1031 exchange investments.
Commercial 1031 exchange Tenant in Common TIC investments may fail to perform as promised, or even result in loss of principle, and cash calls.
The cause of these investment losses is often not the market, but poor investment structure. An experienced tenant in common 1031 investment fraud attorney will tell you the exact causes of the investments’ problems, with the specifics of the investments unsound financial structure, why it was overpriced, and the conflicts of interest.
Risky Tenant in Common TIC investments are not suitable for most investors, and should only be sold to wealthy speculators who are willing and able to accept risk of losing their entire principal.
If you have invested in a TIC or 1031 exchange investment, including a 1031 or TIC oil and gas investment the law limits how much time you have to seek a recovery – Contact my law office today via the contact information below for a free consultation. In many cases, we work on contingency and do not get compensation unless you receive a cash settlement.
Most investors end up in tenant in common TIC investments by looking to do a 1031 tax exchange for its tax benefits. A broker or investment advisor may suggest a TIC as a “like-kind” exchange property for tax savings, .
These tenant in common or 1031 interests usually involve a commercial building, along with a building management contract or a master lease, tenants, and promised income projections. This means that such investments are often sold with the promise that the TIC investor will put in little time and effort because such commercial buildings are professionally managed. Thus, such TICs falsely appear to be perfect for retired people looking for safe, steady income. Such investments are also often sold with the promise of secure returns because they purport to have done all the research in this investment to ensure its stability.
One of the problems is that the due diligence into such investments is often not done properly. Brokers and investment advisors often don’t do research when they should, and often do not even review the private placement memorandum. Private placement memorandums are prepared by people who have a strong interest in selling the investment, and may not be relied on by brokers. Also, just because the law requires complete disclosure of all material facts doesn’t mean it always happens.
The next problem is that the investment advisor or broker who sells a tenant in common interest also has a strong financial interest in the initial sale, regardless what happens to the investor later. While brokers may get 1.5% commission on a sale of a most investments, the same broker may receive 7% for recommending the tenant in common investment. That, on a risky million dollar tenancy in common investment, may mean a $70,000 commission for a single sale. For some stock brokers, securities dealers, or investment advisors, this causes them to overlook problems with the tenant in common investment due to a conflict of interest.
Illiquid investments such as TICs are not appropriate for most people, especially when the investor is near retired, or when the investment constitutes a significant percentage of the investor’s net worth. Because such TIC investment are illiquid, the investor cannot take their money out for years, usually until sale of the property. If there is no income, and the investor cannot sell the investment, they may be stuck watching the investment principal lose value or heads toward foreclosure, without receiving distributions or having any way out of the investment.
Often it is not until an investor contacts a securities fraud attorney such as myself, that they discover the many problems with the TIC investment they were advised to purchase. Often, such TIC investments are sold for millions of dollars above appraisal price, with bad loan terms the property couldn’t sustain, and a financial structure that cannot produce income for the owner even with 80% – 90% building occupancy.
Stock brokers and investment advisors have a fiduciary duty to their clients that is often violated with the sale of such TIC investments.
If you have investment money in a tenant in common and you are not receiving distributions, or cannot get out of an investment you believe is problematic, or if you are being asked to contribute more money for an investment cash call that just might be troubled, please contact my law firm for a free consultation to discuss your options.
As a Tenant in Common TIC investment property attorney, I may take matters on a contingency fee basis, meaning, I only get a fee if I recover money for your lost investment.
Contact now for a consultation.
Attorney Daniel A. Bakondi, Esq.
PHONE: (415) 450 – 0424
The Law Office of Daniel Bakondi
870 Market Street, Suite 1157
San Francisco CA 94102
This post does not constitute legal advice.