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Sunday, March 2, 2008 | 2 a.m.
Last week I met six of the folks who are suing MGM Mirage because they believe they were misled about their purchase of condo-hotel units at the Signature towers at MGM Grand.
They thought the condo sales staff had drastically overstated how much revenue they’d collect from their share of income when their units were rented.
The contracts the unit buyers signed explicitly noted that the sellers did not make any promises about possible rental income.
But the people I talked to, part of the group of more than 40 who are suing (out of more than 1,600 unit buyers), said they figured the contract language must have meant something else.
They said they had signed the contracts immediately after salesmen had finished telling them about comparable hotel rooms in Las Vegas that had occupancy rates well above 90 percent and commanded rates of $300 or more a night.
The buyers were led to believe, they said, that their share of the rental income they split with MGM Grand would be enough to cover all or most of the cost of their mortgage payments on the units, which sold for $500,000 or more.
It didn’t work out that way, and the unhappy buyers say that their units are rarely being rented and, when they are, it’s for far less than they were assured comparable hotel rooms go for.
I have a lot of sympathy for these frustrated buyers, but I think it is unlikely they’ll win their lawsuit, given the explicit language in the sales contracts and our Nevada courts’ tendency to back business owners over consumers.
I don’t know whether resorts’ sales staffs are hyping the prospects of rental income for the condo-hotel units. And if they are, I don’t know whether the resorts are aware of it.
My advice: Resorts should make every effort to make sure their sales staffs market the hotel-condo units as a condominium purchase, not as a possible source of income.
And buyers should consider their purchases as a place to live or occasionally stay or as an investment, considering any possible rental income to be gravy.
•••
While I’m discussing sales staffs associated with Strip resorts, there’s another version I’d like to see displaced entirely.
I’ve long thought that the time-share hucksters who set up camp in many of our Strip casinos were a relic of an older Las Vegas, before opulent resorts began displacing the funky, boisterous Stripfronts.
Those sales people, offering gullible tourists a couple of show tickets in exchange for agreeing to be subjected to at least a few hours of high-pressure sales pitches, are a blight on the new Las Vegas.
If I ran a resort, and if I cared about my customers, I wouldn’t allow some time-share sales booth to pollute my casino or lobby floor and take advantage of my customers.
It’s bad for a resort’s brand to be connected with high-pressure sales.
•••
I won’t shed any tears about Friday’s closing of Nevada Palace.
It wasn’t close to being the nicest casino on Boulder Highway, and I’ve only been in the place a couple of times over the past nine years.
But it had its loyal customers, so I salute the Nevada Palace workers who kept their loyal customers coming back.
The closure continues a bad streak for casinos with the word “Nevada” in their names.
Downtown’s Hotel Nevada still sits closed on Main Street and Nevada Landing was closed and demolished last year in Jean.
I went to the Signature at MGM Grand sales office in MGM's Studio Walk the week it opened, before construction on the three towers started. The sales presentation was slick, but they emphasized the convenience of my being able to stay in my own place when visiting Vegas. The potential of rental income was talked about, but it wasn't misleading. Caveat Emptor!
I spoke to Signature sales agents twice - hotel revenue was never mentioned. I was given different sales packets and hotel rentals were just mentioned briefly, with no representations of expected income. I have seen internet listings of resale units by realtors with claims of hotel revenue making the payments, but MGM didn't make these claims.
When you think about it, if hotel revenue would pay for these condos it would make no sense for MGM to ever offer them for sale. The idea that guest revenue would pay off your mortgage was wishful (greedy)thinking.
People buy things they can not afford then want to sue someone. This has become the "American way" these days.
If Nevada would pass a law demanding that the losing party must pay all expenses including attorney fee's of the winning party our courts would not be so jammed up and there was a lot less attorney commercials on the T.V. each day.
"It didn’t work out that way, and the unhappy buyers say that their units are rarely being rented and, when they are, it’s for far less than they were assured comparable hotel rooms go for."
Rarely rented? Less than hotel rooms? I've seen these condos advertised as rentals on Craigs List. I've asked about several. Only one of five that I have contacted is available on my dates. So they're being rented.
The rates for all of them have been higher than advertised when I ask about them and not less than hotel rooms, although I do agree that the price seems fair considering the amenities. Nevertheless, there's bait and switching happening on the prices, just like the hotels.
Last time I drove by the Nevada Landing, it was still standing.
Developers make misleading statements all the time and then bury disclaimers in 20 pages of legal paperwork.
Just look at the Panorama pool. We were promised fire pits, cabanas, waterfalls…and look at what we have now…I had a better pool at the Desert Club apartments 10 years ago.
Panorama living is CRAPTASTIC!
You have got to be kidding me? This article is in the Las Vegas Sun. . . Hello?! Any research really going on here? The Nevada Landing is still standing in Jean.