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Cosmo condo buyers gain ground in trying to trim financial losses
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LAS VEGAS REVIEW-JOURNAL
Buyers of eight condominiums at The Cosmopolitan of Las Vegas gained ground in trying to reduce the financial losses they suffered in arbitration when trying to recover their deposits.
In a Tuesday hearing where the buyers challenged the outcome, Clark County District Court Judge Elizabeth Gonzalez ordered the arbitrator to redo part of his work, as well as recalculate legal fees. The latter order alone could save the buyers hundreds of thousands of dollars.
The buyers, including entertainment producer Jeffrey Gitlin and celebrity chronicler Robin Leach, had separately signed sales contracts six years ago. However, they decided not to join a settlement that gave partial deposit refunds to buyers of about 1,800 other units last year.
Instead, they banded together to get back their collective $1.35 million in deposits though the compulsory arbitration clause written into sales contracts. In September, the arbitrator ruled they could keep nearly $350,000, but hit them with Cosmopolitan's legal bills of $718,000.
Los Angeles attorney Andre Sherman, representing the buyers, claimed they were also being billed for attorney fees for cases brought by others, including those who joined the settlement.
Gonzalez pointed to $674,000 quoted in documents as pertaining to other Cosmopolitan cases and ordered the arbitrator to limit buyer's fees to their case only.
Further, the buyers had complained about late-night noise emanating from one of the resort's clubs. On an inspection, the arbitrator said he went to the units personally to judge the level of the nuisance.
Sherman, however, claimed the arbitrator never visited all the units.
"What we have are what we believe are very serious acts of misconduct by the arbitrator," he said.
However, Cosmopolitan attorney Mark Lalli said the arbitrator was at most "confused by the evidence." He had gone to nearby units to listen because one in question was being rented out as a hotel room that night.
Overall, Lalli wrote in papers filed in the case, "(I)t is obvious that (the buyers) will say or do virtually anything to get a refund of their earnest money deposits."
While thousands of high-rise condo buyers on or near the Strip were forced into arbitration in the wake of the housing bust, results are normally sealed. This one was unusual because all the terms were made public.
Attorneys for buyers generally do not like arbitration, in part because of the high cost . At one point in the hearing, Gonzalez noted, "The American Arbitration Association submitted a bill of $38,000. Business court doesn't cost anything."
Contact reporter Tim O'Reiley at toreiley@reviewjournal.com or 702-387-5290.
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Never buy into a Condo project that is not primarily Owner Occupied and Ruled. Never buy in a New or Partially Sold project unless you get a very steep discount. Should you choose to ignore those warnings, You deserve to be taken to the cleaners.
Never buy into a New HOA with a Clubhouse and Pool unless there are substantial reserves to replace the builders shoddy construction of them, or there is a significant Bond by a reputable company in place. Las Vegas Politicians should be imprisoned for the shoddy development and lack of planning they've allowed. It will take decades to remedy this mess and a building moratorium should be implemented until home occupancy is above 90%. Its time Dumb Politicians discover Smart Growth.
@dario.m: You are correct, they push arbitration as being faster and cheaper. Generally speaking, it is faster -- things can be scheduled at your convenience, and there is no huge backlog, which many courts face. But it is a toss-up as to whether arbitration is cheaper than litigation -- the private judge/arbitrator and the company he works for charge a lot, but you MIGHT save even more in attys fees by having a streamlined process.
I was under the impression that there is no private residences there anymore, and that the entire property is now a hotel. Is that correct. In other words, no one was allowed to close escrow on their unit, even if they wanted too?
Save your and don't buy condos. Not only are they a bad investment the HOA that monitor them are a joke. Take Coral Palm in NLV. They promise you anything they can to sell you the place. Then once they do they don't deliver. Instead they give you Board that is hand picked by the Developer. He now owns about 80 plus units and therefore controls the elections. They change the rules for the renters and no longer are concerned about us owners. Before you could not have but two dogs and under 40#. Now you can have as many as you want and and no limit on size and there is nothing one can do. The Ombudsman is a joke. They say they are there to help the owner but all they do is spout off a bunch of rules and regulations and then tell you sorry can't or won't help.
but, but the whole sales point of arb is that it is cheaper and
faster than going to court...............looks like a misrepresetation
It seems as though anyone can get a casino license anymore so long they have the money to invest and a phone call from Harry Reid or one of his sons. The mob has been replaced by a much crueler entity so it seems. Where is the true government protections and oversight on stuff like this. How did this stuff get approved? I hope that the second owner of the cosmo is successful so long it is not another investment company
So the celebrity, rich and famous band together and are making progress getting their money back..while the average everyday joe who purchased a house under false pretense during the 'boom' years ends up with a house worth 20% of the mortgage balance and gets no relief anywhere?