Comments on: Condo-Hotel Litigation: The Lawsuit Boom Following The Burst Of Some Of The Riskiest Real Estate Investment Vehicles http://beckandlee.wordpress.com/2008/04/14/condo-hotel-litigation-the-lawsuit-boom-following-the-burst-of-some-of-the-riskiest-real-estate-investment-vehicles/ Notes On The Latest Developments In Florida And U.S. Real Estate, Condominium, And Condo-Hotel Law. Questions Or Comments? Contact Attorney Jared Beck (B.A. Harvard, J.D. Harvard) At 305-789-0072 Or jared@beckandlee.com. Mr. Beck Is Based In The "Magic City" Of Miami, Florida. Thu, 22 Oct 2009 12:54:50 +0000 http://wordpress.com/ hourly 1 By: Stephen Duke http://beckandlee.wordpress.com/2008/04/14/condo-hotel-litigation-the-lawsuit-boom-following-the-burst-of-some-of-the-riskiest-real-estate-investment-vehicles/#comment-1701 Stephen Duke Fri, 27 Feb 2009 23:43:57 +0000 http://beckandlee.wordpress.com/?p=96#comment-1701 Even the best structured condo-hotels are vulnerable to litigation because PEOPLE DO NOT READ THE AGREEMENTS THEY SIGN!!! I have seen this for myself. And, once a few people with disallusionment begin to throw up litigation, values and resales begin to decline. Disallusionmnet often results from expectations that are not aligned with the actual offering. If a developer does everything correctly and there are no projections or representation of income, there should not be any expectations raised. However, people too often fill in the blanks with their own imaginations. Perhaps reading isn't all that is required. Developers are required to disclose all sorts of things in the "disclosure documents", but they are specifically prohibited from disclosing anything related to what a buyer can expect from their purchase in terms of the hotel rental program. That unfortunately, leaves a big knowledge gap. I agree with the practice of selling real estate as such, and guiding potential purchasers to a (separate place) representative of the Hotel Operating Company to provide some details with respect to the Optional rental program. But, they should be clear about NOT raising expectations of income. SD Even the best structured condo-hotels are vulnerable to litigation because PEOPLE DO NOT READ THE AGREEMENTS THEY SIGN!!!

I have seen this for myself. And, once a few people with disallusionment begin to throw up litigation, values and resales begin to decline.

Disallusionmnet often results from expectations that are not aligned with the actual offering. If a developer does everything correctly and there are no projections or representation of income, there should not be any expectations raised. However, people too often fill in the blanks with their own imaginations.

Perhaps reading isn’t all that is required. Developers are required to disclose all sorts of things in the “disclosure documents”, but they are specifically prohibited from disclosing anything related to what a buyer can expect from their purchase in terms of the hotel rental program. That unfortunately, leaves a big knowledge gap.

I agree with the practice of selling real estate as such, and guiding potential purchasers to a (separate place) representative of the Hotel Operating Company to provide some details with respect to the Optional rental program. But, they should be clear about NOT raising expectations of income.

SD

]]> By: T Elaine http://beckandlee.wordpress.com/2008/04/14/condo-hotel-litigation-the-lawsuit-boom-following-the-burst-of-some-of-the-riskiest-real-estate-investment-vehicles/#comment-1340 T Elaine Wed, 30 Jul 2008 19:04:34 +0000 http://beckandlee.wordpress.com/?p=96#comment-1340 States must take control and enforce the promotion and sales process of condominiums. We bought one based on presentation of an onsite rental program that all owners would pay the cost of running, whether they rented condo or not. Condos put in a pool and rotated for reservations (unless specific condo requested by renter. Found out units not build to the code which requires separate utilties (electric meter, electric box, hot water heater, etc.) for each condo unit. Net income to be made never materialized close to figures given. And HOA budget not even realistic...even when questioned told it's solid...omitted a number of expenses. Onsite program was illegal and developers informed of this prior to sales, but continued to present unlicensed program, until most sold. Very few sales would have happened based on reality. Four owners filed lawsuits. Where are the local inspectors? Where is the endorcement of RE laws? Where is enforcement of Condo Act? Where is enforcement of anything???? Be careful when you buy out-of-state and don't understand local "customs". States must take control and enforce the promotion and sales process of condominiums. We bought one based on presentation of an onsite rental program that all owners would pay the cost of running, whether they rented condo or not. Condos put in a pool and rotated for reservations (unless specific condo requested by renter. Found out units not build to the code which requires separate utilties (electric meter, electric box, hot water heater, etc.) for each condo unit. Net income to be made never materialized close to figures given. And HOA budget not even realistic…even when questioned told it’s solid…omitted a number of expenses. Onsite program was illegal and developers informed of this prior to sales, but continued to present unlicensed program, until most sold. Very few sales would have happened based on reality. Four owners filed lawsuits. Where are the local inspectors? Where is the endorcement of RE laws? Where is enforcement of Condo Act? Where is enforcement of anything???? Be careful when you buy out-of-state and don’t understand local “customs”.

]]> By: Todd, condo hotel broker http://beckandlee.wordpress.com/2008/04/14/condo-hotel-litigation-the-lawsuit-boom-following-the-burst-of-some-of-the-riskiest-real-estate-investment-vehicles/#comment-1221 Todd, condo hotel broker Wed, 18 Jun 2008 17:03:34 +0000 http://beckandlee.wordpress.com/?p=96#comment-1221 This kills me! People really have to be careful with a property offering, especially if they are looking to "flip." It is such a dangerous assumption to think that the rental revenues will cover costs associated with condo hotel ownership, and any sales organization should know the dangers of implying such things. Now we are seeing rental revenue fall short in crashing markets like Las Vegas. Really they should be treated as second homes in great locations with rental revenue POTENTIAL. Next thing you know, people will be suing because their property didn't appreciate. Phooey. As far as offering a condo hotel as a security, I doubt that will ever happen, it creates too many headaches for the developers. Not only would they have to hire a sales staff, but also licensed investment brokers as well. This kills me! People really have to be careful with a property offering, especially if they are looking to “flip.” It is such a dangerous assumption to think that the rental revenues will cover costs associated with condo hotel ownership, and any sales organization should know the dangers of implying such things. Now we are seeing rental revenue fall short in crashing markets like Las Vegas. Really they should be treated as second homes in great locations with rental revenue POTENTIAL. Next thing you know, people will be suing because their property didn’t appreciate. Phooey.

As far as offering a condo hotel as a security, I doubt that will ever happen, it creates too many headaches for the developers. Not only would they have to hire a sales staff, but also licensed investment brokers as well.

]]> By: Nick Cifonie http://beckandlee.wordpress.com/2008/04/14/condo-hotel-litigation-the-lawsuit-boom-following-the-burst-of-some-of-the-riskiest-real-estate-investment-vehicles/#comment-1143 Nick Cifonie Wed, 23 Apr 2008 03:24:34 +0000 http://beckandlee.wordpress.com/?p=96#comment-1143 Are most of these problems cause, in your opinion, by people who intended to live in the units full-time, investors, or "snow birds"? Nick Cifonie http://www.REI-TV.com Are most of these problems cause, in your opinion, by people who intended to live in the units full-time, investors, or “snow birds”?

Nick Cifonie
http://www.REI-TV.com

]]> By: Property Investments Plans http://beckandlee.wordpress.com/2008/04/14/condo-hotel-litigation-the-lawsuit-boom-following-the-burst-of-some-of-the-riskiest-real-estate-investment-vehicles/#comment-1133 Property Investments Plans Thu, 17 Apr 2008 10:31:30 +0000 http://beckandlee.wordpress.com/?p=96#comment-1133 Really most of the real estate investor before investing on the property they should gather information about that property and then invest on the property investments, This will reduce the risk in real estate investments. Really most of the real estate investor before investing on the property they should gather information about that property and then invest on the property investments, This will reduce the risk in real estate investments.

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