Madison Realty Senior Care II-AZ DST: Lawsuits for Investors

Madison Realty Senior Care II-AZ DST: Lawsuits and Investor Complaints

Are you concerned about your investment in Madison Realty Senior Care II-AZ DST? If so, the securities attorneys at The White Law Group may be able to help you by filing a FINRA Dispute Resolution claim against the brokerage firm that sold you the investment.

About Madison Realty Senior Care II-AZ DST

Madison Realty Senior Care II-AZ DST is a Delaware Statutory Trust (DST) sponsored by Madison Realty Companies. According to SEC filings, the offering reportedly launched in 2016 and aimed to raise $8.6 million from accredited investors through a 1031 exchange program. According to offering documents, the trust invested in a senior living facility—now identified as Visions Assisted Living at Apache Junction—a facility that is currently at the center of serious legal allegations.

Allegations of Mismanagement and Neglect at Visions Assisted Living

In March 2024, the Arizona Attorney General reportedly filed a civil complaint alleging racketeering and elder abuse at two Visions Assisted Living facilities, including the property in Apache Junction. The complaint describes a pattern of financial mismanagement, including bounced payroll checks, unpaid bills, and a failure to maintain staff and services necessary for safe resident care.

Residents were allegedly left in unsafe conditions, and regulators found violations ranging from medication mismanagement to dangerous staffing shortages. The property is now in court-ordered receivership.

Risks of DST Private Placement Investments

DST private placement investments are typically sold by brokers as passive real estate options for 1031 exchange investors. But they often involve substantial risks:

• Illiquidity: DST interests are generally not publicly traded and are difficult to resell.
• No control: Investors have no voting rights or decision-making authority regarding the property.
• Capital constraints: DSTs cannot raise additional capital, even if the property needs repairs or improvements.

Unsuitable Recommendations by Brokerage Firms?

Despite these risks, brokerage firms often recommend DSTs to clients because of the high up-front commissions—often 7–10% of the offering amount. If your financial advisor failed to properly disclose the risks or recommended this high-risk private placement to you without considering your financial situation, you may be able to pursue a claim to recover your losses.

Lawsuit Options: FINRA Arbitration vs. Class Action

Investors considering legal action may wonder whether a class action lawsuit or an individual FINRA arbitration claim is the better option. Typically:

• FINRA Arbitration is often more suitable for investors with losses exceeding $100,000.
• Class Action Lawsuits are usually pursued when numerous investors have small claims that are impractical to litigate individually.

Free Consultation with a Securities Fraud Attorney

If you invested in Madison Realty Senior Care II-AZ DST or a similar DST investment and are concerned about your losses, The White Law Group may be able to help you. Contact our office at 888-637-5510 for a free consultation.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation law firm with offices in Chicago, Illinois and Seattle, Washington.

Frequently Asked Questions

What is Madison Realty Senior Care II-AZ DST?

It is a Delaware Statutory Trust that raised $8.6 million from investors to acquire Visions Assisted Living in Apache Junction, AZ. The sponsor was Madison Realty Companies.

What are the allegations against Visions Assisted Living?

The Arizona Attorney General has accused the operators of elder abuse and racketeering, citing financial mismanagement and unsafe conditions for residents.

Can I recover losses from my DST investment?

If your brokerage firm made an unsuitable recommendation or failed to disclose risks, you may be eligible to file a claim through FINRA arbitration to recover losses.