A condo-hotel is a legal framework virtually unheard of in [tag]Florida[/tag]‘s [tag]real estate[/tag] industry, where sales staffs are warned against marketing property as investments for fear of running afoul of federal security laws. And it could involve hundreds of thousands in dollars in [tag]registration fee[/tag]s, awkward disclosure documents, strict advertising controls and extra exposure to litigation should buyers end up unhappy.

By declaring the property as a security, the [tag]developer[/tag] would defy conventional wisdom in the real estate industry but confirm the assumption that many condo buyers are investors looking for a profit. Many see profit — or at least [tag]cash flow[/tag] — as a main selling point for [tag]condo-hotel[/tag]s, which offer title to hotel rooms that owners can then rent out for a share of the rental income. ”You’re buying into what is really a business, just as if you were buying a stock in any other business,” said Bart Bartholdt, a lawyer with Graham & Dunn in Seattle, who wrote an article on how to avoid security-law infractions while selling condo-hotels.

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