QUESTION
What type of attorney would I need to file a suit against an individual for breach of contract on a real estate investment?
Asked on Jun 04th, 2021 on Civil Litigation - Oklahoma
More details to this question:
My father has invested money into two properties that were supposed to be remodeled and flipped. He invested $15,000 on the first property and per his contract was supposed to receive a 100% return of $30,000. The second property he invested $10,000 with a 50% return of $15,000. The individual that owns the company handling the remodel and sell of the properties is now in breach of the contract as their was a time frame set within them in which the funds were to be paid. One of the other investors has already filed a suit against the company and individual. From this investor, my father has also learned that there is at least two large corporations that have filed suit as well. We are concerned that if we do not file suite as well my father will not receive the money he invested back much less the profit promised.
1 ANSWER
Any local litigator should be able to handle this for your father and I think he'd be wise to consult one because, in addition to the collection issues you've noted, I think you may have a usury problem with your case. You claim that this was an investment, but, while there are many ways to structure a deal, this sounds more like a loan. If you invest money in a venture, you share in any increase in the venture's value, but you also share in the risk of the venture's failure. If you have a guaranteed return on monies you advanced, that's a loan; your return is guaranteed, but you don't get extra if the venture succeeds. To the extent that the court also views this transaction as a loan, you have a usury (loan sharking) problem. It is illegal to charge excessive interest on a loan. I don't know what the maximum is in Oklahoma, but in New York it is 16% per year for loans to individuals, 24% for loans to corporations. Depending on when your father was supposed to be repaid (i.e. in 1 year, 2 years, etc.) the return he was supposed to get could be considered usurious, an illegal contract, and he may not be able to recover it.
Answered on Jun 04th, 2021 at 6:32 PM