economy:

Buyers sue for deposit money on downtown condos

Wednesday, July 1, 2009 | 3:03 p.m.

Steve Marcus

Streamline Tower on Fremont Street downtown is facing a federal lawsuit from buyers who say the condo company sold them units that were smaller than advertised and made false promises regarding buyers’ ability to rent their units to short-term visitors.

Streamline Tower

The Streamline Tower bankruptcy case is winding down, but disputes continue over canceled condominium-purchase contracts at the downtown Las Vegas property.

About 40 buyers filed a lawsuit June 26 in Clark County District Court against Titleone of Las Vegas, which the buyers say is holding their deposit money.

Each of the buyers says they put down deposits of $10,000 or more for Streamline condominiums, but now say Titleone has refused to return their money.

“The monies deposited with the defendant have not and will not be utilized for the uses and purposes for which the deposit was made and the defendant accordingly is obligated to return to the plaintiffs the monies so deposited, together with interest,“ the lawsuit charges.

A message for comment was left with Titleone on Wednesday.

Troubles at the Streamline boiled over into a federal lawsuit filed last year in Las Vegas, with buyers asserting they had been misled about their purchases.

“It has been discovered that the condominium units are substantially smaller than what was disclosed during the pre-construction process,“ plaintiffs charged in the federal case.

Also, they said, “when potential buyers have had recent appraisals performed on the condominium units, the appraisals are so low, that lenders refuse to finance the contract price.“

Corus Bank of Chicago, the main lender for the condos at 150 Las Vegas Blvd. North, sought dismissal of the lawsuit. The bank said the disputes between the seller and the buyers should go to arbitration instead.

But action in the federal civil suit was halted when the condominium developer, Streamline Tower LLC and related companies, filed for bankruptcy protection in Seattle in April.

In the bankruptcy case, Corus received permission to foreclose on the property and this week the debtors sought dismissal of the bankruptcy proceedings.

“The real property that formed the major assets of these cases was foreclosed upon ... consequently there is nothing to reorganize,“ the debtors said in a filing Monday.

In seeking permission to foreclose, Corus said it's owed $108 million by Streamline and that just 27 of 275 condominiums in the high-rise project had been sold as of May 7.

Corus said a November 2008 appraisal found the property was worth $60.3 million -- far less than the amount due on the loan.

“The condominium market in Las Vegas is depressed and substantial capital and many months will be required to sell out this property. There is a large surplus of condominium units for sale in the city of Las Vegas,“ Corus said.

All this means the owners had no equity and no hope of bringing the past-due loan current, Corus said.

Corus officials couldn't immediately be reached for comment Wednesday on what plans they have for the project.

Discussion: 7 comments so far…

By LasVegas2009

7/1/09 at 5:27 p.m.

Suggest removal

Either put up the rest of the money for the unit that you agreed to pay or walk away. You can't however expect your deposit back if you walk away. Thats why its deemed a DEPOSIT you get to lock in a price and they get to keep the money if you walk.
By markp

7/2/09 at 2:32 a.m.

Suggest removal

there are mugs born everyday

Mug1 says" Lets put up a deposit for an overpriced condo, after all property prices will always go up we are not in a bubble"

Mug2 "cool lets do it"
By BigStack

7/2/09 at 7:12 a.m.

Suggest removal

LV09,

The developer cannot deliver the units. They no longer own the property. Since the goods can't be delivered, the buyers should get their deposits back.
By Nick

7/2/09 at 9:29 a.m.

Suggest removal

LasVegas2009, is 2009 when you were born? You are that stupid. Try reading the article without making your lips move, okay?

1) The units are smaller than promised. breach of contract.

2) The building is not complete and the property can't be purchased.

Try sticking to serving food, you clearly are not for finance.
By LV4LIFE

7/2/09 at 11:55 a.m.

Suggest removal

If the units are not not the size specified in the contracts that is certainly a breach of said contract. You get your money back plus att. fees.
By 9ballguy

7/3/09 at 10:42 a.m.

Suggest removal

If they misrepresented the property with inaccurate square footage the buyers will get refunds.
By rickshaw

7/3/09 at 11:12 a.m.

Suggest removal

The buyers should have to pay some type of penalty for actually believing a condo would be desireable in that neighborhood.