Investors who say they have been burned through their investments in the Trump Tower International Hotel in Toronto have been dealt a further blow as regulators in Ontario says they have decided not to pursue action against the developer.
On Tuesday, the Ontario Securities Commission said it would not pursue action against the developers, refusing to provide any details other than to say that the call was made after meeting with perspective buyers and after considering a number of factors.
One of the tallest buildings in the country, the 65-storey building has been a long-standing source of controversy, with more than a dozen disgruntled investors trying to sue developer Talon International Inc. in order to get out of the deals, claiming they were misled during the purchasing process.
According to the investors, Talon gave assurances that the hotel units could easily be financed as residential condo units but Canadian banks are in fact treating the project as a commercial investment and are therefore refusing to finance them.
Because of this, investors say they are now faced with either having to put up substantial amounts of cash in order to close the deal or resort to secondary financial institutions which will lend under commercial investment conditions, providing only partial financing at high interest rates.
As a result of all this, the plaintiffs say they were persuaded into buying the units on the basis of negligent misrepresentations, and are therefore suing Talon and their directors as well as a number of Trump organisations and their directors, including Donald Trump Sr.
The investors also say they are losing more than $175 per day because of a shortfall between maintenance fees and hotel unit revenues.
While Trump’s company was not the developer, his Trump Hotel Collection is the property manager.
A lawyer for the Trump Organization has dismissed the lawsuits as a case of buyer’s remorse.