A TIC Investment Recommended By Royal Alliance Associates, Inc. Allegedly Ends In Financial Losses For A Disabled Man

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The Law Offices Of Jeffrey Feldman Filed A FINRA Arbitration Claim Against Royal Alliance Associates, Inc. and Regal Advisory Services, Inc. (“Respondents”), On Behalf of A Disabled Man (“Claimant”) Who Alleges That He Lost More Than $500,000 On A Tenancy In Common Investment Recommended To Him By Respondents. According To Allegations In The FINRA Arbitration Claim (FINRA No. 16-00460), Respondents Invested Almost All of The Claimant’s Investment Funds In A Single TIC Investment.

Per the claim filed with FINRA, in 2005 a broker at Royal Alliance Associates, Inc., who was also an investment advisor with Regal Advisory Services, Inc., advised the Claimant to sell two rental properties that he owned and invest the proceeds in a tenancy in common (“TIC”). The specific TIC that Respondents recommended was a single tenant building in Baytown, Texas, that was to be occupied by a Best Buy store, according to allegations in the FINRA claim. Respondents told the Claimant how safe this property would be, per the FINRA claim, because the tenant was creditworthy and the property did not have debt encumbering it. Respondents also emphasized the benefit of regular income payments and care-free professional management of the property, according to allegations in the claim filed with FINRA. When income from the investment drastically declined, as alleged in the FINRA claim, the Claimant found that it was illiquid. According to Mr. Feldman, “the nature of the ownership structure makes these TIC interests much more difficult to sell than traditional real property, and there is a limited market for them." More Information About The Law Offices Of Jeffrey A. Feldman Can Be Found At: http://www.jeffreyfeldman.com.

As alleged in the FINRA Claim, many significant down sides to TIC investing were never discussed with the Claimant. Some of these include substantial fees, lack of control, often having to obtain unanimous consent among fellow TIC holders in order to take any action relating to the property, less liquidity than owing real estate outright, and a purchase price for the property that was likely well above fair market value, per allegations in the FINRA claim. In fact, according to the claim filed with FINRA, the underlying property is now worth approximately half of what the Claimant paid for it, even though the real estate market in Baytown, Texas has been relatively good over the last nine years, suggesting that the Claimant paid a substantially inflated price for the TIC.

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Jeffrey Feldman
Law Offices of Jeffrey Feldman
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