American Residential Properties Inc. Accused of Shady Tactics to Grow Business
Scottsdale 9/26/2014 01:02 AM GMT (TransWorldNews)
American Residential Properties Inc, a real estate investment trust company, has recently come under fire for allegedly using shady business dealings against much smaller development partners. Some accusations against American Residential Properties include fraud, unjust enrichment, breach of contract and several others have been filed against the public company REIT by Scottsdale, Arizona company, Invision Capital Management. Reportedly ARPI has done this with other former partners, one of which was Landsmith, who had allegedly settled out of court with ARPI.
According to the allegations, ARPI breached their contract with Invision by agreeing to commit a substantial amount of money to acquire and rehabilitate properties. Invision remediated the properties and began leasing them while ARPI received the revenue. In the industry, this is known as a triple net lease. However, although the venture was successful, ARPI suddenly ceased funding of the acquisitions and rehabilitation costs. As a direct result Invision was forced to default on their payments and the property portfolios and revenue were completely taken over by ARPI.
Back in 2012 ARPI committed to the combined portfolio of $40 million. After this, ARPI halted funding and Invision allegedly became the latest victim of this activity getting stuck with reportedly over $450,000 of rehab costs and now more than an estimated $8 million in potential outstanding claims. After ARPI took over the portfolios and profits interest, Invision had no means of financial recourse.
ARPI is now being challenged by Invision Capital Management who has relentlessly pursued a just conclusion with a lawsuit. Invision has filed multiple claims, but ARPI has made no attempt to address the allegations thus far. Furthermore, the Company has, so far, failed to publicly disclose that the lawsuit even exists to its shareholders or to the SEC in its most recent filings.