For many, the condo hotel may go down as the Pets.com of the real estate bubble.

Many buyers purchased the hotel rooms from developers hoping to get paid every time the room was rented. But condo hotels, which account for as much as 10 percent of all hotel rooms under construction and a much greater percentage in resort markets such as Orlando and Las Vegas, are coming back to haunt many of the people who bought the units, the developers that built them and the operators hired to run the hotels.

Some projects also are being brought to the attention of regulators by investors.

"It's been a very bad investment," said Moji Adekunbi, a 47-year-old engineer who in 2005 bought a $550,000 condo-hotel unit in the Signature at the MGM Grand in Las Vegas, where one of every four hotel rooms being developed is a condo-hotel unit. Adekunbi counted on the cash flow from renting out his unit more than covering his $3,000-a-month mortgage payment, leaving him with a tidy profit.

He said the developer's sales staff led him to believe that the hotel would have 94 percent occupancy and $350-a-night rates. Turns out, he is netting only $400 to $1,800 a month before his mortgage payment.

Representatives for the developer and the hotel operator said hotel-rental projections weren't discussed with customers before they bought their units, and some buyers made their own assumptions about rental income. "Some people's assumptions didn't pay off, and they are trying to find someone to blame," said MGM spokesman Alan Feldman.

Florida at forefront

Some condo-hotel buyers are happy. But other buyers are suing developers to get out of their contracts, claiming they were misled. In Florida, a group of buyers is suing WCI Communities Inc., claiming the developer sold them condo hotels in the waterfront Resort at Singer Island as unregistered securities. The buyers said they bought the units as investments, not primarily for their own use. WCI said it intends to "vigorously defend" against the lawsuit, according to a recent Securities and Exchange Commission filing.

Historically, the SEC has suggested it wouldn't take enforcement actions against a condo-hotel developer as long as the company didn't provide prospective buyers with projections of income or expected occupancy, among other conditions.

If the transaction should have been registered, buyers can rescind the deal and get their money back, without having to prove fraud and misrepresentation, attorneys said.

Michael Trombley, a retired major-league pitcher who lives in Fort Myers, is one of several investors who have filed lawsuits alleging securities laws were violated in the sale of units in the Clearwater Cay Club in Clearwater.

"They were always trying to preach to people that the market is hot. This is a no-brainer. You'd better get in quick," said Trombley, 40, who spent most of his career with the Minnesota Twins and Baltimore Orioles. In 2005, Trombley, along with five friends and family members, bought five units in the development for about $2.2-million, according to his attorney, taking out loans to finance the entire purchase price.

Trombley estimates the four units he holds are worth at best 40 percent of the original purchase price. Costs, meanwhile, are running about $14,000 a month.