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Richard
Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 46025
Experience:  32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
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Hello, My wife and I bought a vacation home as a investment

Customer Question

Hello,

My wife and I bought a vacation home as a investment in Nothern WI. It was part of a resort turned into a condo association.
We bought it from ther orginail owner and son. Son is the property manager.

When we bought it we were given a sheet of paper which I have showing gross rent minus management fee of 30. Never saw his tax return Sch E ( my mistake)

So the rental history is this. New Cabin Opened in June 2008

Total income for 2008 was 22,100.00 Management fee net to owner 15,470.00
Total income for 2009 was 31,130.00 Managent fee net to owner 21,791.00
Total income for 2010 was 28,420.00 Management fee net to owner 19,894.00

We bought it at the end of the rental season of 2010. Based off those numbers it would pay for iself.

in 2011 gross rental was 18,000.00 minus his management fee since we kept him on to book it and rent it was 12,600.00
In 2012 gross rental was 19200.00 minus his 30 for a net of 13,444.00

So we now have fired him him is there any recourse on him giving us such falserental number. The same thing has happened to two other owneres who bought the same time. Resort was in finanical hardship. We all feel they made it look good and we fell for it. Over a ten year period that loss of 10k plus a year is a lot of money. What would you suggest? Thanks Gary
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Richard replied 1 year ago.
Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good morning. This is going to depend upon whether or not the numbers he gave you for 2008 through 2013 were actually false. If those numbers were not true, then you would have causes of action for deceptive trade practices and fraud. But, if the numbers he provided you were accurate and the later years did not match those numbers because the market forces changed, you would have to show that there was something he knew or should have known about the property that he failed to disclose. Otherwise the rental decline would not be deemed to be his fault, but rather due to the ups and downs of the real estate market.


This is the part of my job I don't like...when the law is not in favor of my customer. I wish I could tell you that you automatically would have a cause of action, but, I can only provide you information based on the law so that you can act on the best available information to you. ………..I wish I had better news, but can only hope you recognize and understand my predicament and don't shoot the messenger. I'm sorry!




Thank you so much for allowing me to help you with your questions. I have done my best to provide information which will be helpful to you. If I have not fully addressed your questions or if you have any follow up questions, or if I have misinterpreted your questions in any way, please do not rate me yet, but simply ask a follow up question without rating so I can provide you with a fully satisfactory answer. If I have fully answered your question(s) to your satisfaction, I would appreciate you rating my service with 3, 4, or 5 faces/stars so I can receive credit for helping you today. I thank you in advance for taking the time to provide me a positive rating!
Richard, Lawyer
Category: Real Estate Law
Satisfied Customers: 46025
Experience: 32 years of experience as lawyer in Texas. I'm also a Real Estate developer.
Richard and 7 other Real Estate Law Specialists are ready to help you
Customer: replied 1 year ago.

Yes I asked for ideas on how to handle it market for rental has been great.


Ideas ask for his FEDERAL SCH E


 


Threaten law suit


 


Other ideas of action any more ideas etc etc. It didnt just happen to us

Expert:  Richard replied 1 year ago.
I would suggest you send him a certified, return receipt requested letter detailing the history and demanding that he provide substantiation of the representations made within a short specified period of time. Inform him that if your demand is not timely complied with, you will have no choice but to file a suit against him for your damages. Be sure to specifically mention that you will be filing this claim not only as a breach of contract case, but also as deceptive trade practice and fraud actions, which will entitle you not only to your damages, but also an additional amount equal to multiple times your actual damages as punitive damages. That should provide plenty of incentive to comply with your demands; but, if it does not, file your suit.
Expert:  Richard replied 1 year ago.
I just wanted to let you know I'm breaking for a short time for lunch. If you have a further follow up, I will address it immediately upon my return. Thank you for your patience and I apologize for any inconvenience.
Expert:  Richard replied 1 year ago.
Thank you so much for the positive rating! I appreciate having had the opportunity to serve you! If I can be of assistance to you in the future, just look me up and I will be happy to help!

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