Condo investors sue Trump over failed Baja project

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Nearly six dozen condominium buyers are suing Donald Trump and his partner in a hotel-condominium project that went belly-up on the northern Baja peninsula.

In a complaint filed March 13 in state court in Los Angeles, 69 people said they lost as much as $32 million in deposits for condos in the failed Trump Ocean Baja Resort, which was marketed as a joint venture with Donald Trump and Los Angeles-based Irongate Development.

According to the complaint, buyers' deposits were being used to finance construction after credit markets dried up last year, with the defendants allegedly setting up a shell company in Mexico to deflect suspicion.

The complaint alleges that buyers were tricked into believing that Trump was a developer in the project and that his children, Donald Jr. and Ivanka, had purchased condo units.

With condos priced from the mid-$200,000s to more than $1 million, buyers put down 30% of the purchase price on deposits to secure one of the 526 luxury suites in the development.

But condo buyers didn't learn about the project's failure until last month, when they were told their deposits were spent and they would not be getting any of it back.

Lawyers for the buyers said the purchase agreement specified that deposits would be refunded if the project were halted.

The suit seeks the return of deposits with interest as well as punitive damages and legal costs. In an interview with Bloomberg, Trump denied being a developer and said the project flopped because of the collapse of lending markets.

"If you look at it from a practical standpoint, people would have been unable to get their financing and the apartment prices would have been different from what people agreed to," Trump said.

In addition to Donald Trump and Irongate Development, the suit names as defendants Donald Trump Jr. and Ivanka Trump, Irongate affiliates and condo brokers, among others.

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