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Discussion Starter · #1 ·
Without Trump Name, Buyers of Luxury Condos Want to Back Out
Polyana da Costa
Daily Business Review
06-12-2008


Donald Trump, the real estate mogul and reality TV star, says he's "honored" to be a subject in a lawsuit brought by about 80 buyers of luxury condominiums who say they're victims of a fraudulent sales program.

The lawsuit, which does not name Trump as a defendant, claims the developers of the Trump Towers complex in Sunny Isles Beach, Fla. -- a partnership including the Related Group and Dezer Development -- used the celebrated Trump name to attract buyers. But according to the suit, the billionaire's name can only be used temporarily and for promotional purposes and may be changed once the units are sold out, the buildings are completed and the developers are no longer associated with the project. The lawsuit was filed Tuesday in Miami-Dade Circuit Court.

The buyers are seeking cancellation of sales contracts for units with prices totaling more than $100 million and the return of about $20 million in deposits.

Reached in Scotland where he was pushing his plan for a $2 billion golf resort, Trump said he was "honored" by the lawsuit and the fight over his name.

"Everybody wants to have the name Trump," he said.

Representatives of the Related Group did not respond to several phone calls or an e-mail seeking comment.

Gil Dezer, president of New York-based Dezer Development, which owns dozens of acres in Sunny Isles Beach, was not available for comment. Gil Dezer's father, Michael Dezer, said he couldn't comment because he had not seen the lawsuit. A copy of the lawsuit was e-mailed to the developer, who did not call back before deadline Wednesday.

Trump said he had a "great involvement" with the three-building, high-rise project but wouldn't say if he has invested in it. The developers have a licensing agreement to use the Trump name and trademark to market the project, he said. He would not say if he would seek to have the Trump name removed from the project once all the units have been sold

Although the Trump name was part of all promotional material, including banners, letters and document cover sheets, it is not included in any of the actual condo documents or the purchase contract, said Robert Cooper, an Aventura attorney who is representing the buyers in the lawsuit.

"There is no license agreement in existence between the association and Trump that would give them the right to call it the Trump Towers once the developers leave," Cooper said.


Trump has licensed his name to various developments across the world. In some cases, he is a direct investor and partner in the project. In other instances, he licensed his name to developers for a share of the profits -- about 8 percent to 15 percent of gross condo sales -- plus millions of dollars in upfront payments, according to a September 2006 article in Forbes magazine.

Condos in buildings that carry the Trump name are worth 36 percent more than units in similar buildings that do not carry the Trump flag, according to the lawsuit.

The lawsuit also alleges purchasers in Trump Tower II and III overpaid for their units because the developer "operated a fraudulent and misleading resale program by manipulating" asking prices in Trump Tower I to support vastly inflated prices of units in the second and third buildings.

"Let's say someone bought a unit in Tower I for $700,000 and wanted to resell it for $900,000," Cooper explained. "The person would sign an agreement with a minimum price of $900,000, but the [brokerage firm and the developers] would list it for $1.4 million. So when buyers looked at Tower II they said, ‘Wow, the prices for these units are going up fast."


The alleged fraud not only hurt buyers in the Towers II and III -- who overpaid based on the manipulated listing prices of units in Tower I -- but also harmed owners of units in Tower I who couldn't sell their units at the inflated asking prices and were prohibited from trying to sell their units through other venues, Cooper said.

Buyers of units in the first tower received letters stating, "They were strictly prohibited from listing units on any Multiple Listing Service, including Internet advertising, and that such advertising would constitute a breach of the contract unless the purchasers first obtained the developers written consent," according to the lawsuit.

Exclusively Baronoff Realty is the brokerage that handled the sales for the three towers.

Elena Baronoff, the brokerage's president, did not return phone messages and e-mails seeking comment before deadline Wednesday. The company operates in the Trump International Sonesta Beach Resort.

Baronoff's Web site claims units in Trump Towers I and II are sold out, and the third tower is nearly complete.

http://www.law.com/jsp/LawArticlePC.jsp?id=1202422190611
 

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These people are just using this excuse to get out of their contractual obligations. Who wants to live in a tacky Trump building anyways? I have seen his buildings in Las Vegas and NYC and they are the epitome of sweet golden tackiness! They got in over their heads and now are using this as an excuse. If you buy property simply for the name you deserve to get it you know where without any Vaseline. :cheers:
 

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You have a way with words, addicted...and agreed with your sentiments. His Royal Hairpiece has a tower going up near me here in Philly and I have to look at his ugly mug on the sales banner every day.
 

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How sweet is that? You get millions of dollars for permission to put your name on a building. I would let them use mine for FREE just for ego. :nuts:
 

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Discussion Starter · #5 ·
I don't agree, unless they were told upfront. Its not typical for a condo building to change its name, and if you have ever been in a Trump sales center, they push his name and brand on you heavy.

People buy those Ritz, W, and Four Seasons Residences at a premium because of the name on the door, and it gives instant credibility in a market that relies heavy on the overseas foreign buyers. Same for the Trump brand. People say in Russia know Trump, but have no idea what Ocean IV is.
 

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I don't agree, unless they were told upfront. Its not typical for a condo building to change its name, and if you have ever been in a Trump sales center, they push his name and brand on you heavy.

People buy those Ritz, W, and Four Seasons Residences at a premium because of the name on the door, and it gives instant credibility in a market that relies heavy on the overseas foreign buyers. Same for the Trump brand. People say in Russia know Trump, but have no idea what Ocean IV is.
Agreed, but those hotels either build or run their properties. Trump gives his name to any builder and architect for a nice chunk of change.
 

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Dripping with irony

OK is anyone else like not blow away by the writer's name: Polyana da Costa

you gotta be f*king with me

Keep in mind this is basically a story about blind optimism for coastal properties.

I mean... her first name means:

Pol·ly·an·na /ˌpɒliˈænə/ Pronunciation[pol-ee-an-uh]
–noun
1. an excessively or blindly optimistic person.
–adjective
2. (often lowercase) Also, Pol·ly·an·na·ish. unreasonably or illogically optimistic: some pollyanna notions about world peace.

...and to top it off her last name basically means "of the coast"!

This kind of crazy shit happens all the time. :nuts:
 

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Discussion Starter · #8 ·
Agreed, but those hotels either build or run their properties. Trump gives his name to any builder and architect for a nice chunk of change.
Yes, but how many non real estate people know that. A buyer simply walks in, gets told how great it will be to live in a Trump building, sees his picture every where on all the brochures, his name on the building and all over the property, etc.

Do you really think, for instance, an elderly wealthy woman walking in the sales center will have any idea that the Trump name could be taken down months after she moved in? The sales agents certainly are not going to tell her.

BTW, Trump does build a lot of his condo properties, but he does also lend his name out at the same time to others.
 

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These people are just using this excuse to get out of their contractual obligations. Who wants to live in a tacky Trump building anyways? I have seen his buildings in Las Vegas and NYC and they are the epitome of sweet golden tackiness! They got in over their heads and now are using this as an excuse. If you buy property simply for the name you deserve to get it you know where without any Vaseline. :cheers:
I have to agree with you there. 99% of Trumps buildings I've seen are ugly, the other 1% exist in Chicago and hasnt been finished yet.
 

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Before You start feeling, TOO, sorry for These condo investors.....

Remember THIS famous quote from All the Sad Young Men (1926)....

"Let me tell you about the very rich. They are different from you and me." - F. Scott Fitzgerald
 

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Yes, but how many non real estate people know that. A buyer simply walks in, gets told how great it will be to live in a Trump building, sees his picture every where on all the brochures, his name on the building and all over the property, etc.

Do you really think, for instance, an elderly wealthy woman walking in the sales center will have any idea that the Trump name could be taken down months after she moved in? The sales agents certainly are not going to tell her.

BTW, Trump does build a lot of his condo properties, but he does also lend his name out at the same time to others.
I rather live in a Trump "quality" building with a different name, and look for that matter.
 

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These three towers in Sunny Isles are HORRIBLE. When I saw them announced, and start, I could not believe the balls these people have to market such architectural garbage... They are identical, boring, and impotent. There is no design, no class, just people who love to buy name brand things without giving it a second glance. Reminds me of all those Miami girls who love to wear that identical purse that everyone wears, but cost hundreds of dollars. I cant rememebr the brand, but they are always covered with the symbol of the company....
 

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These three towers in Sunny Isles are HORRIBLE. When I saw them announced, and start, I could not believe the balls these people have to market such architectural garbage... They are identical, boring, and impotent. There is no design, no class, just people who love to buy name brand things without giving it a second glance. Reminds me of all those Miami girls who love to wear that identical purse that everyone wears, but cost hundreds of dollars. I cant rememebr the brand, but they are always covered with the symbol of the company....
Louis Vuitton, and yes you are correct. The Trump tower in Vegas looks like a Willy Wonka Golden Ticket was blown up to 70 stories.
 

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Wow, that really is ugly. Las Vegas architecture is so freaking tacky, jeez.
 

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Agreed, but those hotels either build or run their properties. Trump gives his name to any builder and architect for a nice chunk of change.
Correct about those brands being hotels and they are slightly different.
What is the same is that those brands do license their name to a developer...similar to what Trump is doing. A W or Ritz flagged property will charge a developer a fee for using their name in the marketing of the condo/hotel property, and the Flag will will also charge a fee for managing the property. As the attorney for the Trump buyers stated, this liscensing is "temporary". Not sure what he means by termporary, but W's and Ritz's don't have permanent licensing agreements. Nothing unusual about a non-permanent liscensing agreement.
 

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Correct about those brands being hotels and slightly different.
What is the same is that those brands do license their name to a developer...same as it seems Trump is doing. A W or Ritz Flagged property will charge a developer a fee for using their name in the marketing of the condo/hotel property, and the Flag will will also charge a fee for managing the property. As the attorney for the Trump buyers stated, this liscensing is "temporary". Not sure what he means by termporary, but W's and Ritz's don't have permanent licensing agreements. Nothing unusual about a non-permanent liscensing agreement.
I believe the Fontainebleau kicking Hilton to the curve would be a good example. The way I see it, the quality of the constructions or amenities should not suffer because the name is removed. If it does, then you were going to live in a shitty Trump building. If it doesn't suffer then we are back at your only buying the name.
 
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