Potential Recovery for Real Estate Investors?

Can Real Estate investors recover damages from a Real Estate agent or broker who, under the Uniform Prudent Investor Act, breached their investment fiduciary duties?

Do Real Estate agents, brokers and their employers, who by providing information and or "investment advice", bear any responsibility for real estate investors' losses?

A prominent legal expert on Fiduciary Duty states: 

"fiduciary duty is an extremely broad concept and likely to cause liability to be found in new situations"
 

Real Estate Agents, brokers and their employers: What is the nature and extent of their fiduciary duty to buyers who intend to occupy compared to buyers who do NOT intend to occupy purchased property otherwise known as INVESTORS?

Fiduciary duty generally points to disclosure of known risks and or defects in the subject property, as well as avoidance of conflicts of interest and self dealing.  In some instances, fraud may connect agents, brokers and their employers to real estate developers, marketing organizations, mortgage lenders, property appraisers, mortgage brokers, banks, investment bankers and perhaps even escrow companies.

Another potential avenue of recovery warrants investigation if the Investor purchased property in name or favor of a trust and or ERISA Pension plan, Profit Sharing, Money Purchase, Keogh Plan, 401k plan and or used moneys from same plus IRA, SEP IRA type moneys as part of the consideration in the transaction(s).

Chris McConnell & Associates, a qualified, experienced, most importantly independent fiduciary expert along with legal counsel can sift through events related to purchase transactions including representations from the agent, including biased or inflated brochures. 

Prudent investments avoid over concentration in one asset class (real estate), consider the effects of inflation and deflation, taxes, current income versus growth and excessive leverage for the sole interests of trust and or ERISA beneficiaries. 

Agents, over anxious to close deals sometimes exert pressure, undue influence or control upon the investor; especially deals with family or friends or act as agent on both sides of a deal, a serious potential conflict.  Although prohibited, some agents may have received kick backs or other forms of economic benefit from mortgage lenders and or mortgage brokers.  In some cases did agents know or should have known that certain investors lacked capacity to make informed, prudent investment decisions?  Did agents review the relevant trust or plan document?

The acts and or omissions of some agents, brokers, and other parties bear hallmarks common in an NASD securities matter; Suitability, Churning, Over concentration, Failure to diversify, excessive Leverage and Breach of Fiduciary Duty

A fiduciary audit of all parties and documents involved along with legal counsel can help to determine the nature and extent of the Real Estate Agent or Brokers' and or their employers' investment fiduciary duty owed to investors under the Uniform Prudent Investor Act as enacted by 43 states, D.C. and U.S. Virgin Islands and or the trust instrument or ERISA plan document.

For more information contact us at realestatefraud@fiduciaryexpert.com           

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