Condo buyers file lawsuit, allege contracts breached

By Steve Green

Tuesday, July 21, 2009 | 10:48 a.m.

Lawsuits by unhappy buyers of hotel-condominium units in Las Vegas continue to pile up -- the latest involving the Platinum Hotel and Condominium.

Twenty-four Platinum condominium buyers filed suit Friday in U.S. District Court in Las Vegas against Platinum Condominium Development LLC, Marcus Development LLC, Marcus Hotels Inc. and Marcus Management Las Vegas LLC.

The buyers, among other things, allege the defendants breached contracts to properly market their units for rental as hotel rooms and haven't properly shared the rental revenue.

They claim fraudulent concealment of information about the development and violation of the Nevada Deceptive Trade Practices Act. They are seeking rescission of their sales contracts as well as an accounting of the project's finances and the placement of funds at issue into a constructive trust.

"False projections of rental rates, occupancy rates, and the 'quality' of Platinum Condominiums as an excellent investment opportunity were made by the sales agents, at the direction and approval of Platinum and Marcus," the suit charges.

This is one of many lawsuits pending in Las Vegas state and federal courts over condominium and condo-hotel deals arranged when the economy was booming and buyers expected to gain rental income on their investments and see their condominiums rise in value. With the recession, many condominium units now sit unsold and rental income has weakened due to the decline in travel to Las Vegas.

For Platinum, this is the third such suit this year to be filed in federal court in Las Vegas or to be transferred there from Clark County District Court.

In the pending cases, Platinum and Marcus have denied wrongdoing.

Marcus attorneys said in a filing that the plaintiffs in one of the existing cases are "apparently plagued by buyer's remorse now that the Las Vegas real estate and tourism markets have collapsed on an unprecedented scale."