Buyers from across the USA are going to courts to get their money back, arguing that condo-hotel developers violated securities laws when selling the units.

Condo-hotels seemed like a great idea. Hotel developers could offset construction costs by selling rooms to individual buyers, then share the rental income with the owners every time a room was booked. However, instead of the lucrative venture some buyers claim they were promised by developers, condo-hotels have turned out to be one of the worst investments in decades.

The industry was hit on two fronts. The condo crash has wiped out the value of many units, and the hotel bust means the rooms are being rented only infrequently and at much lower rates than anticipated.

Wall Street Journal