Trump SoHo / Condo Sales Misrepresentation
Last updated: November 21, 2025
Status: Civil lawsuits filed by condo buyers in 2010 alleging fraudulent sales representations were settled in 2011, with developers agreeing to return 90 percent of deposits to certain purchasers. No criminal charges were brought.
Summary
The Trump SoHo condo-hotel project in lower Manhattan became the centre of a major sales-misrepresentation dispute in 2010. Buyers alleged that the developers, along with the Trump Organization, inflated the number of units sold in order to create the impression of a thriving luxury market. This perception, they argued, induced them to purchase units at prices and under conditions they would not otherwise have accepted.
The lawsuit focused on statements claiming that as much as 60 percent of units had been sold, when filings with the New York Attorney General’s office reportedly showed that only about 15 percent had actually been purchased at the time. Buyers argued that these discrepancies were material, as sales velocity is often an indicator of project viability, resale prospects, and long-term rental income potential in condo-hotel structures.
The case resulted in a settlement in 2011 in which developers agreed to refund most of the plaintiffs’ deposits. Although the settlement included no admission of wrongdoing, it represented a significant concession and underscored the extent to which misrepresentation claims had gained traction. No criminal charges followed, though press coverage noted that a related inquiry by the Manhattan District Attorney’s office did not move forward.
Background of the Project
Trump SoHo was developed by the Bayrock Group and the Sapir Organization, with the Trump Organization providing branding and management input under a licensing and marketing arrangement. The building was a high-profile, 46-story tower featuring condo-hotel units—an ownership model positioning buyers to use their units personally for part of the year while placing them into a rental pool when not in residence.
The project launched with significant publicity, touting its modernist architecture, prime downtown location, and association with the Trump brand. Early marketing emphasised rapid sales and high investor interest. According to documents later discussed in litigation and commentary, promotional materials and sales representatives communicated that the building’s units were selling quickly, reinforcing the impression that early buyers were getting in on a desirable, fast-moving investment.
Internal filings with the New York Attorney General’s office, however, painted a different picture. These documents indicated substantially lower unit sales than what had been communicated publicly. Such internal filings are required under New York’s Martin Act, the state’s securities and real-estate disclosure law governing condo offerings. The divergence between internal numbers and public statements became a core issue in the buyers’ lawsuit.
The Allegations of Misrepresentation
In August 2010, fifteen condo buyers filed a lawsuit alleging that the sales team for Trump SoHo had misrepresented the level of market demand. According to the complaint, potential buyers were told that the building was between 30 percent and 60 percent sold, depending on when they inquired. In reality, according to the filings cited in the litigation, only 62 of the roughly 400 units had been sold, representing about 15 percent of the inventory.
The plaintiffs argued that the inflated figures created a false sense of security about the building’s viability. In condominium investment models—especially condo-hotels—sales momentum is crucial. Low sales may limit amenities, reduce the building’s operational capacity, and weaken projected rental revenue. A building that is only 15 percent sold instead of 60 percent sold poses a very different risk profile to prospective purchasers.
The lawsuit also claimed that the developers and sales staff promoted waiting lists, strong foreign-buyer interest, and other indicators of demand that did not align with the private disclosures in their regulatory filings. In addition, the plaintiffs argued that assumptions used in marketing—such as anticipated staffing levels, occupancy projections, and revenue forecasts—were inconsistent with what the building ultimately delivered.
Buyers asserted claims including consumer fraud, securities fraud, common-law fraud, and breach of contract. The legal theory underlying the claims was that misrepresentations of sales figures induced buyers to enter contracts they would not have accepted had accurate information been provided.
Legal Outcomes and Settlements
The developers denied wrongdoing, arguing that sales figures were estimates or represented different categories of interest such as reservations and contracts in process. They contended that the plaintiffs misunderstood the nature of the offerings.
Despite these arguments, the lawsuit concluded in November 2011 with a settlement. Under the agreement, the developers returned 90 percent of deposits to certain buyers in the plaintiff group. Although settlements do not serve as admissions of liability, refunding such a large percentage of deposits demonstrated the seriousness with which the claims were taken and the developers’ desire to avoid prolonged litigation.
News reports indicated that a related inquiry by the Manhattan District Attorney’s office was closed without charges. The matter remained a civil dispute, and no criminal indictments were issued against the Trump Organization or its executives.
Market and Brand Impact
The lawsuit and subsequent settlement had ramifications beyond the immediate parties. The case highlighted the vulnerabilities of the condo-hotel model, which depends heavily on investor confidence and sustained pre-sales. Inflated claims of sales performance can distort buyer expectations and undermine the transparency essential to complex real-estate investments.
The Trump SoHo building struggled in the years following the lawsuit. Market conditions shifted, unit resale values fluctuated, and concerns over demand persisted. In 2017, amid ongoing reputational challenges and strained relationships with local partners, the building was rebranded as The Dominick. The change removed the Trump name from the property, reflecting its diminished marketing value in the wake of litigation, political controversies, and broader brand erosion.
Real-estate analysts have pointed to the Trump SoHo case as a cautionary example of how hype-driven marketing, especially when tied to celebrity branding, can obscure underlying project weaknesses. The legal dispute also contributed to discussions about transparency standards in high-end residential developments and the importance of accurate disclosures in pre-construction sales.
Key Takeaways
Misrepresentation claim: Buyers alleged that sales figures of 60 percent sold were false, with actual sales around 15 percent.
Settlement: Developers refunded 90 percent of deposits to certain buyers in 2011.
Criminal investigation: A related DA inquiry did not result in charges.
Brand impact: The project was rebranded as The Dominick in 2017, reflecting reputational fallout.
Sources
Reuters – “Donald Trump sued for fraud over Trump SoHo condo” (Aug 3, 2010)
Courthouse News – “Buyers Say Trump Inflated SoHo Unit Sales” (Aug 6, 2010)
New York Post – “Occupy Spring St.: Trump SoHo to give 90% refunds on deposits” (Nov 3, 2011)
New Yorker – “How Ivanka Trump and Donald Trump Jr. Avoided a Criminal Indictment” (Oct 2017)
Adam Leitman Bailey P.C. – Case Study: Trump SoHo Sales Misrepresentations