A group of real estate brokers have joined forces to sue former Hard Rock high rise condo developer Peter Morton for cancelling his $1 billion dollar condo project back in 2006. Alleging breach of contract and fraud, Coldwell Banker Premier Realty and two other California brokers are claiming Morton is required to pay millions of dollars worth of commissions for the almost 2000 reservations he claimed to have had when he sold his Hard Rock interests including approximately $800 million in sales reservations. The plaintiffs claim they had between 160 and 170 buyers for the high rise condo project.
Let's see... 3% on each of those sales (where unit prices started in the $400K and went into the high millions) amounts to some pretty hefty commissions. But whether they're entitled to those commissions obviously remains to be seen. Of course, both lawyers say they're "confident we will prevail in the case" and I have no idea as to how this will be resolved. My only question is: what took so long? Unfortunately, justice is not swift all the time and insiders say no trial date is set - we'll probably have to wait at least nine months before this case moves forward.
And by that time, we'll probably have a healthy Las Vegas high rise condo marketplace again so brokers no longer have to sue developers to make their money and developers don't have to cancel projects that may put them in the poor house.
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Interesting, finally you’ve posted a pitfall! I’ve always thought you should post a more balanced view of what is happening out there. Why not any thoughts on the Cosmopolitan foreclosure?
http://online.wsj.com/article/SB120554452781938671.html?mod=googlenews_wsj
Or the Signature Grand Lawsuit?
http://www.lasvegassun.com/news/2008/mar/02/jeff-simpson-explains-why-he-doesnt-think-signatur/
I bought a condotel at the Signature. Luckily I’m not a part of that lawsuit, but my fellow owners are. I’m still riding out the storm over here and hanging in there. I can’t even sell it because every other owner is selling for far less than they bought it. Not to even mention the fact that everyone’s appraised value is far lower than the purchase price. I can’t even refinance because of this fact.
I didn’t think things would get as bad as they are now. Though, my own due diligence on the purchasing the place I found that my wife and I could sustain a worst case scenario (which is how things turned out).
We were luckier than others in that we could afford a worst case scenario. Plus, through my own efforts we were able to rent the unit out for more than what the MGM rental program provides for.
I agree with your last article that now is the time to buy. I think these properties are worth more than the current appraised value.
I still wish I was more forewarned of the dangers of investing out there and that it wasn’t painted so rosy. There are a lot of people hurting in the current market.
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