Buyer sues to exit Trump condo deal

Miami Herald reports:

The developer behind the new Donald Trump hotel in Fort Lauderdale faces allegations it violated securities laws by marketing the condo-hotel as an investment.

John Taglieri, a Massachusetts restaurateur under contract to purchase a $730,000 unit there, filed suit Monday against the luxury hotel slated to open next year as one of the priciest in Fort Lauderdale.

The suit adds to the list of court fights condo-hotel developers face across the country as a financing vehicle that helped spark South Florida's recent hotel boom gets battered by a declining real estate market.

Lured by the easy money of a hot condo market, many hotel developers this decade opted to sell rooms to individuals as a way to raise upfront capital for their projects. Condo-hotel sales helped bring Ritz-Carlton and Four Seasons to South Florida, as well as fuel the renovation of Miami Beach's Fontainebleau resort.

Condo-hotel owners can rent out their units for a share of the profits -- money many counted on to reduce or even erase the costs involved in owning the condo.

But with condominium values dropping, and hotels combating a slow economy, the once hot concept has cooled considerably, people who follow the condo-hotel industry say.

''In this market, it doesn't look like a good investment. You're inclined to want to get out,'' said Irvin Sandman, a Seattle lawyer who last month helped write an article, Troubled Condo-Hotel Workouts: The Time Has Arrived.