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Delay In Filing REIT Or TIC Claim Could Be Fatal To Recovery

Purchase a REIT or a TIC ?
If you purchased a non traded real estate investment trust (REIT) or a tenant in common (TIC) investment that has dropped in value, ceased distributions or otherwise performed in a manner that differs from the sales pitch that convinced you to buy it in the first place, and have been putting off taking action to recover your losses, you would be wise to reconsider further delay.

Many investors we have spoken to were unaware of these important factors prior to making their purchases of a non-traded REIT or TIC investment:

  • Distributions are not certain. For many of these investments distributions have ceased
  • The investments are illiquid and are difficult or impossible to sell. Company buybacks have ceased for many.
  • The commissions paid at the time of purchase may have been as high as 7-12%.

FINRA Rule May Prohibit Your Claim if You Wait Too Long

The Financial Industry Regulatory Authority (FINRA) has what is known as the eligibility rule (Rule 12206) which provides that no claim shall be eligible for submission to arbitration where six years have elapsed from the occurrence or event giving rise to the claim.

While the ultimate determination of whether this rule is to be applied and if so as of what date it is to be run from is the decision of each arbitration panel, in most cases the date of purchase, not the date of discovery that your claim exists, is the day when the six years starts running.

Today is February 13, 2013. Six years ago is February 13, 2007. When did you make your purchase?

While there are factual situations and arguments which may convince an arbitration panel to hear claims on purchases prior to the 2007 date, investors with actionable losses would be wise to act before the six year time period has run.

Did You Qualify for Purchase of The Investment Initially?

Most TICs and non traded REITs are not registered with the SEC and are sold under the SEC's Regulation D (private placements). According to those rules investors must meet certain criteria in order to invest in these private placement offerings. In general, those rules require that the investor have at least $1 million net worth (exclusive of primary residence) and income exceeding $200,000 in each of the two preceding years.

We have seen a number of cases where the investor did not meet this SEC criteria but the suitability documents were falsely completed by the selling broker.

Did you qualify for purchase?

Popular NonTraded REITs and TIC Investments

Partial list of popular REITs
Behringer Harvard
CNL Lifestyle
Cornerstone
Dividend Capital
Hines
Inland American
Inland Western
KBS
Wells
Wells Timberland

Partial List-Popular Tenant In Common Investments(TICs)
American Investment Exchange
Argus Realty
BNI Equities, Notes, TICs
Cabot
Canyon Creek Financial
Cottonwood
Core Tenancy
Covington
DBSI
Eliason
Evergreen Realty Group
First Guardian Group
FOR 1031
Gemini
Grubb & Ellis
Medical Capital Holdings
Moodys
Provident Asset Management
Provident Royalties
Ridgewood Energy (oil & gas TIC)
Striker Petroleum (oil & gas TIC)
Tax Strategies
Triple Net Properties (NYSE:NNN)
TSG
US Advisors

We are a securities fraud, stock market loss recovery law firm located in Boca Raton, FL and have been helping investors nationwide recover investment losses.

Free consultation

Rex Securities Law

561 391 1900

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.