Buyers, Brokers Seek 'Benefit Of The Bargain': LV

The New York Times reports that the cancellation of Las Vegas condo projects isn't the end of the matter. "Three weeks ago, Eli Verdnikov, an engineer in Los Gatos, Calif., received a letter saying that the apartment building he planned to retire to, Icon Las Vegas, would not be built. In the envelope was a check for $73,672.81, the 10 percent deposit Mr. Verdnikov had paid, plus interest." "But Mr. Verdnikov wants more than the $73,672.81. Since he agreed in May 2005 to buy the apartment near the Las Vegas Strip for $728,900, its value, he says, has increased. 'To purchase something similar, we would need to pay $200,000 more,' said Mr. Verdnikov. So Mr. Verdnikov is suing for the gain he would have realized if the apartment had been built. 'He deserves to get the benefit of the bargain,' said Will Kemp, a lawyer in Las Vegas, who is representing Mr. Verdnikov and a dozen other Icon buyers." "As the market for high-end condos levels off, more and more people may find themselves in Mr. Verdnikov's position: with contracts to buy condos that will never be built. And some hope to recover the profits they believe they would have made." "The Icon cancellation came as a surprise, in part because its developer is a partnership of two giants: the Related Group of Florida and the Related Companies. Mr. Perez was out of the country and could not be reached for comment, a company spokesman said. Reached on his cellphone, Martin Burger, the president of Related Las Vegas, hung up. In contrast to its current silence, 'the company relied heavily on its own reputation in marketing the building,' said David Ezra (who) sold some 60 units in the building. He added that he thought the excuse of higher construction costs 'might work for a first-time developer, but it doesn't work for Related.'" "The contract at Icon included no limitation on damages, Mr. Kemp said. 'It's a standard measure of damages in contract law,' he said, though he said he had not seen it applied in a case involving an unbuilt condo building. Mr. Kemp is also representing more than 100 buyers of units in a Las Vegas development called Krystal Sands. In that case, the developer chose to sell the land the building was going to be built on, and buyers received their deposits back. A lawyer for the developer, Cam Ferenbach, said that he thought the company had a good defense, but said, 'I don't want to try the case in the press.'" "In the suits he has filed against Related, he charges not only breach of contract, but 'fraudulent misrepresentation,' because, he said, 'they continued to reassure these people that they were going to build, and then they didn't build.'" "Real estate brokers who sold units in canceled projects may also have grounds for a lawsuit, and Mr. Ezra, for one, says he is considering legal action. Mr. Ezra said the 60 units his firm sold at Icon were worth about $50 million. Ezra International Realty stood to receive about $1.5 million in commissions from Related Las Vegas, which pays brokers 3 percent commissions on each sale. Mr. Ezra said he has not received any offer of compensation from Related, which he said he earned because he produced 'ready, willing, and able' buyers." "David J. Wine, the vice chairman of the Related Companies said, 'We have an incredible reputation for delivering to our customers. I think we can say that, over all, this is a very unusual situation, and that our followers will appreciate, in the long run, our being candid and straightforward, because that is the kind of company we are.'"