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Condo Buyer Sues Over Use of Trump Name
Daily Business Review
August 06, 2008
A Boston restaurateur who banked on the allure of Donald Trump's name in deciding to buy a Fort Lauderdale, Fla., condominium-hotel unit alleges in a lawsuit that he is the victim of misleading marketing.
In the lawsuit filed Monday in Broward Circuit Court, John Taglieri also contends the developer of the project violated state securities and condo laws.
SB Hotel Associates LLC failed to register Taglieri's unit at the beachfront Trump International Hotel & Tower as a security, though it was marketed as an investment opportunity, and wrongly promoted the project as a Trump development, according to the lawsuit.
The lawsuit claims marketing material indicated the units would be worth 36 percent more with the Trump name.
Trump is not the developer and does not have any agreement to indicate the project will operate under the Trump name when it is completed, according to the suit.
Taglieri put down $146,000 in December 2005 for a $730,000 unit in the 298-unit tower under construction at 551 N. Fort Lauderdale Beach Blvd. (A1A). He was told the 24-story development would be complete in 2007.
"The impetus for the lawsuit is frustration with purchasing a product he thought he was getting that was heavily promoted in a certain way by the developer and realizing that's not the project that will be delivered," said Taglieri's attorney, Jared Beck of Beck & Lee in Miami.
"In this market, misrepresentation and failure to deliver what's promised are things a developer cannot afford to get away with," he said.
A representative of SB Hotel in New York did not return a phone call by deadline.
Trump, who is not named in the lawsuit, was in meetings in New York and unavailable for comment.
In June, 80 buyers of condos at the Trump Towers complex in Sunny Isles Beach also claimed the Trump name was used to attract buyers.
In a lawsuit filed in Miami-Dade Circuit Court, the buyer claimed that the Trump name on their condo can only be used temporarily and for promotional purposes. It said the name may change once the units are sold, if the buildings are completed and if developers Related Group and Dezer Development no longer are associated with the project.
The buyers sought the return of $20 million in deposits and the cancellation of sales contracts for units collectively priced at more than $100 million.
According to state corporate records, SB Hotel Associates' managing member is Stillman Bayrock Merrimac LLC in New York.
The Fort Lauderdale project team includes Trump, architect Michael Graves of Miami, Roy Stillman, the Bayrock Group, architect Oscar Garcia of Fort Lauderdale and longtime Fort Lauderdale real estate investor and hotelier Ramola Motwani, according to Trump International's Web site.
Motwani, who plans to build the 22-story Ocean Wave Beach Resort at 525 N. Fort Lauderdale Beach Blvd., declined comment, saying she didn't know details of the lawsuit. The project is not related to Trump International.
The Trump International developers made clear the condo-hotel units are securities, and the purchase agreement prevents Taglieri from using the unit as a permanent home, the suit states.
Taglieri contends that failure to register the unit as a security with the Securities & Exchange Commission violates the federal Securities Act and Florida Securities and Investor Protection Act.
The project's marketing material, including a prospectus, also violates Florida condominium law, the lawsuit stated.
