Subject: File No. S7-26-07
From: Neal E Nakagiri, Esq
Affiliation: President, CEO, CCO, NPB Financial Group, LLC

March 25, 2008

Thank you for the opportunity to comment. The Board of Directors of the Tenants-in-Common Association (TICA) has said that "sales of TIC interests are subject to federal and state securities laws, when the TIC interests are structured to be sold to unrelated persons, who will not be actively involved in the management of the property and who have an expectation of income and profits to be derived primarily from the efforts of others." (May 2007). This sounds strangely like the traditional definition of a security.
If the investment is a security, then all of the securities laws, rules and regulations should apply, as with any other investment that is deemed to be a security. Therefore, the exemption which would allow payment of a securities commission to an unlicensed person should not be permitted. I understand that TIC interests are a form of real estate ownership, but so are other types of securities, such as limited partnerships, real estate investment trusts, limited liability corporations, Delaware statutory trusts--which are also forms of ownership that can own single or multiple pieces of real property. If the form of ownership results in a "security" then real estate agents and brokers should be subject to the securities laws just like the other securities professionals who work in the securities business.