Scottsdale 9/30/2014 4:44:00 AM
News / Home Construction

Invision Capital Management Accuses American Residential Properties Inc of Fraud, Unjust Enrichment and More

Sizeable REIT, American Residential Properties Inc, has recently been accused by Invision Capital Management, for alleged fraud, unjust enrichment and breach of contract, and more against them and other much smaller development partners. Some of the accusations have been filed against the public company REIT by the Scottsdale, Arizona company and ARPI has yet to address the allegation or publicly disclose to the SEC or its shareholders that the lawsuit even exists. 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 who has relentlessly pursued a just conclusion with a lawsuit.