Condo sales agents seek pay

A group of independent sales agents of the Cosmopolitan's condominium units are seeking their final commission payments even though none of the sales have closed and the project is not scheduled to open for at least a year.

Six independent agents filed a breach-of-contract lawsuit last week in Clark County District Court seeking the outstanding commissions claiming that actions by the original owner and the bank that acquired the project delayed the project by nearly two years. The delay, the lawsuit claims, prevented many of the buyers from closing on the units before the housing market collapsed.

Since the housing market decline, it has become nearly impossible for buyers to obtain loans for units that are now worth nearly halve their contract prices.

"Had defendants not caused numerous delays in construction ... purchasers of Cosmopolitan units could have obtained loans and closed on the sale of their units," the lawsuit said.

According to the lawsuit, the agents performed their obligations under the terms of their contracts with project broker Americana, a limited liability company owned by real estate broker Mark Stark.

The agents secured purchase agreements for nearly 1,800 buyers who paid 20 percent of the purchase price.

Under the agents' contracts, they were to be paid their sales commissions by 3700 Associates, a limited-liability company owned by New York-based developer and Bruce Eichner, through Americana.

The commission payments were scheduled to be paid in three installments as the purchasers' made their first deposits, their second deposits and then the final deposit payments.

The lawsuit said the agents received their first two installments but have not received their final payments.

The agents were told in 2005 they would be employed two to three years, the length of time it would take to finish construction and open the project, the lawsuit said.

The defendants, however, knew in 2005 that construction of the Cosmopolitan would not be completed until 2010, according to the lawsuit.

"Yet, despite this knowledge, defendants failed to inform (the agents) of this material fact," the lawsuit states.

Darren Welsh, attorney for Americana, said the lawsuit was surprising because Americana has always been committed to living up to the terms of its agreements with the agents.

The agents, however, seem to want to move themselves into a higher priority for payment than other parties in the financially troubled project, Welsh said.

"For (the agents) to say there was fraud and inducement, no way," Welsh said. "Do you think (the defendants) wanted to go out and waste five years of their life? They've got more at stake than (the agents) do."

Deutsche Bank bought the project in August 2008 for $1 billion in foreclosure after Eichner and his partners defaulted on a nearly $760 million construction loan.

Deutsche Bank spokesman John Gallagher said the bank believes the lawsuit lacks merit.

"We will defend ourselves vigorously against these allegations," he said.

Contact reporter Arnold M. Knightly at aknightly@reviewjournal.com or 702-477-3893.