The real estate development and management sectors require large amounts of capital investment to function, whether in residential or commercial real estate markets. Real estate investments generate income in the form of rent or proceeds from a sale. These returns may take the form of securities regulated by the SEC as well as other relevant governmental and non-governmental agencies.
Securities traditionally cover equity, shares, bonds, promissory notes, and the like. Real estate investments are considered securities by the U.S. Supreme Court if an investment contract exists. For an investment contract in place, there must be an investment of money or assets in a common enterprise, an expectation of profits from the investment, and profits generated outside of the investor’s control.
Regardless of the structure of your real estate security, fund managers have fiduciary duties of loyalty, care, and disclosure to their investors. Avoiding issues related to these duties and resolving any problems when they arise are key to a REIT’s long-term financial security.
If your partnership or business invests in real estate, it is imperative that you speak with experienced counsel about the implications, regulatory requirements, and legal risks.
If your investment is at risk, moving quickly is paramount when bringing an action against a real estate investment company because the company can sell its assets before investors have a chance to file the action in court. Once this happens, collecting a judgment on those assets becomes much more difficult. At Warren Law Group, we act fast to protect your investment.