A Tenant in Common, also known as a "TIC," is described as a way for two or more persons to own property together. Tenants in common may own equal or unequal shares of the property, and there are no rights of survivorship. When one of the co-owners dies, his or her share of the property becomes part of his or her estate and passes on to heirs. This is common in joint business ventures: if two people own an apartment complex and one of them dies, his or her share of the complex passes to their beneficiaries and does not pass to the other co-owner.
TIC exchanges were a popular investment, which were sold mainly through independent broker-dealers, before and during the run-up to the credit crisis and involved tax-deferred exchanges of property ownership interests, with the promise to investors of income generated from the ownership stake in the new property.
Many TIC investors saw their properties fall in value after the real estate bubble burst in 2007-08. Many investors' current claims stem from the days of the collapse but are only now coming to arbitration because of a combination of factors, attorneys and experts said. Those include a drawn-out process of the decline in value of a commercial property, including the potential for foreclosure, as well as investors' hopes for a rebound in the value of some properties, writes Bruce Kelly from an article in InvestmentNews.
It was reported that in the 12-month period from May 2012 through April, investors won 17 arbitration awards involving tenant-in-common sales, according to the Securities Arbitration Commentator, which tracks Financial Industry Regulatory Authority Inc. arbitration claims.
Investors continue to win awards over TIC claims. In May, ProEquities Inc. lost a $450,000 arbitration award, plus interest, dating back to February 2003 to a TIC investor who alleged negligence, unfair sales practices and other allegations, according to the FINRA arbitration award. This month, a representative, Victor Cassone, and a defunct broker-dealer, Pacific West Securities Inc., were found liable for $5.1 million to a claimant that alleged breach of contract, negligence and other assertions involving a TIC investment.
Soreide Law Group represents investors nationwide in Tenant-In-Common (TIC) cases before the Financial Industry Regulatory Authority (FINRA). For a free consultation on how to potentially recover your financial losses call: 888-760-6552.