The Donald is in town to testify, facing a lawsuit alleging breach of contract in a Trump Tower condo deal. We wondered--what does this lawsuit mean for the condo market? (And how will Trump's hair survive the Windy City?)
We turned to condo lawyer Steve Welhouse of The Sterling Law Office (below) for some analysis. Despite Trump's celebrity involvement, this is unlikely to be a precedent-setting situation for condo law, he tells us. But Trump Tower is one of the more recent and high-profile condo projects in downtown Chicago and will draw the attention of developers and real estate market observers interested to see whether the nature of the agreements involved--and their apparent traps for the unwary--will have any future role in Chicago real estate, he adds.
Despite the organized desk, Steve insists he's an attorney. Here are the particulars: 87-year-old Jacqueline Goldberg planned to buy two $1M units in the building, 401 N Wabash, based on a promise of revenue sharing (banquet hall rentals, food sales, parking, etc). These types of investor incentives were offered to buyers who may have been "friends and family," Steve thinks. Jacqueline says the building reneged the revenue-sharing arrangement after she put down a $516k deposit, in part due to sub-parcommercial leasing at the property. Trump's lawyer says she was a savvy investor who signed documents giving them the power to revoke the offer.
Steve says commercial space revenue-sharing arrangements are unusual for a typical residential condo buyer. He usually sees residential buyers investing in condo units involved in completely separate legal arrangements from the commercial space (in Trump's case, the hotel). The residential space would share a master agreement with the commercial space, governing mutual common areas and splitting up expenses of occupying the building--ex. a heating system that serves both areas. (Is this what first drafts of Law & Orderlook like before they add the one-liners and smooth-talking witnesses?)How this will play out is dependent on the court's interpretation of the contracts and other legal documents involved, he tells us.
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