Investors of Triple Net TIC Could Recover Losses

by InvestorLawyers on March 22, 2012

in FINRA,Retirement,Securities Fraud,Suitability

Individuals who suffered significant losses as a result of a Triple Net TIC investment may be able to recover losses through securities arbitration with a securities fraud attorney. In many cases, brokers may have committed broker fraud by unsuitably recommending these investments to investors.

Investors of Triple Net TIC Could Recover Losses

TICs, or tenancies-in-common, are investments in which multiple investors are sold a property. These investors are then co-owners of the property, and receive fractional interests in said property. The investors then enjoy their own share of the net income and expenses, proceeds of sale and appreciation of the property. TIC investors do not participate in the every day management of the property. However, they do have certain rights regarding the property’s management.

TICs offer a relatively high dividend or interest and as a result, these investments are often attractive to certain retired investors. Generally though, TICs are unsuitable for income-seeking and retired investors for two main reasons:

  1. Because TICs are wholly dependent on the overall state of the real estate market and the underlying real estate property’s performance, the investments are unsuitably risky.
  2. Generally, TIC investments are illiquid and, as a result, investors’ access to funds is severely limited.

Some brokers recommend TICs to investors, despite the fact that they are unsuitable, because they typically offer a high commission. In some cases, TICs will pay a commission as high as 10 percent to the broker who makes the sale. However, a violation of the suitability standard means that investors can seek to recover their losses through FINRA arbitration.

Argus Realty, Cabot Investment Properties, DBSI, Covington Realty Partners, FOR 1031, Covington Realty Partners and Triple Net Properties are just a few of the sponsors offering TICs that may have been improperly sold to investors.

If you have invested in a TIC at the recommendation of your broker-dealer or investment adviser despite the fact that TICs are unsuitable for your portfolio, and suffered significant losses as a result, you may have a valid securities arbitration claim. For more information, contact an investment fraud lawyer at The Law Office of Christopher J. Gray at (866) 966-9598 for a no-cost, confidential consultation.

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