
One issue that has long tormented developers of condominium hotels and fractional interest programs is whether or not the availability of a rental management program to buyers of condominium units or fractional interests transforms a real estate deal into a security. The recent Ninth Circuit Court case, Salameh v. Tarsadia Hotels, sheds useful light on that question, concluding that no security was present where the rental management contracts were signed by buyers of condominium hotel units anywhere from 8 to 15 months after the sales agreements were executed and there was no allegation of co-promotion of the two programs. READ MORE