The Ninth Circuit Federal Court of Appeals in Salemeh, et al v. Tarsadia Hotels, et al, reviewed the question “Is it real estate or is it securities” de novo. This required the Court to thoroughly review the state and federal securities laws, as applied to condominium unit offerings. The Court held that a properly structured voluntary rental program offering is the sale of real estate, and does not convert hotel condominium units into securities. What made this case even more intriguing is that the SEC filed an amicus brief (“friend of the court”) suggesting that if the goal was to operate the condo units as a hotel – then the venture was a security. The Court came down in direct opposition to the SEC and the bottom line is if the condo offering, sales program and rental program are properly structured – then the sale of condo units are the sale of condo units – aka real estate, dirt, nothing more! For a more thorough analysis of the holding of the Court see the GT Alert.