By: Elizabeth A. Harris
August 2nd, 2010
A group of 15 buyers at the Trump SoHo Hotel Condominium New York is suing groups and individuals behind the project, contending that they inflated sales figures in the first year and a half of marketing the project.
According to the complaint, which was filed in Federal District Court in Manhattan on Monday, representatives of Trump SoHo said the project was “30, 40, 50, 60 percent or more sold” — both in individual sales pitches and statements to the press — but after the offering plan became effective in May, buyers learned that just over 15 percent of the building, 62 of the 391 units, had been sold.
“They had a concerted and consistent pattern of lying about the numbers of units sold,” said William J. Geller, a lawyer at Adam Leitman Bailey, P.C., who is representing the buyers. As a result, Mr. Geller said, his clients bought units they otherwise would not have. “They never would have signed contracts if they knew only 10 percent of the units were sold, instead of the 50 or 60 percent they were told,” he said.
These buyers, who have bought six units at Trump SoHo, are suing to have their contracts rescinded and their deposits returned, as well as for unspecified damages and fees. The lawsuit also makes other allegations.
Among the defendants named in the complaint are the Bayrock/Sapir Organization LLC, which is the project’s sponsor; Donald J. Trump; Alex Sapir; and Tevfik Arif, as well as people involved with sales and marketing, including Mr. Trump’s children, Ivanka Trump, Eric Trump and Donald Trump Jr.
According to Jay Neveloff, a lawyer at Kramer Levin, and an attorney for the Bayrock/Sapir Organization, there are more than 100 contracts signed — 100 contracts would represent about 25 percent of the units — but the company decided to report only the minimum 15 percent to the attorney general’s office.
“Nobody ever said there were only 15 percent,” Mr. Neveloff said, who had not seen the complaint early Monday evening. “It seemed to us the most prudent and conservative way to go.”
The Trump SoHo Hotel Condominium, at 246 Spring Street, is neither a standard hotel nor a straightforward condominium. Units start at more than $1 million for a studio, but buyers are limited to staying in their units for 120 days a year, and for no more than 29 days in a 36-day period. The rest of the time, the units are rented out as hotel rooms.