Part of the appeal of the condo-hotel model is the potential income stream, but as the Wall Street Journal highlighted earlier this week, some owners are finding that the expected cash flow is more of a trickle. The Journal pointed to a handful of owners at the Trump International in Las Vegas who are jostling to bypass the hotel and rent out their condos on their own, as well as a group of owners at a Florida project who are suing a developer over whether the real estate was sold as an investment and therefore should have been registered with the Securities and Exchange Commission.

Legal wrangling aside, the bigger picture may be that some owners find that they are contractually unable to sell even if they are unhappy with their purchase. Developers insert clauses into the contracts and owners are forced to abide by them. For instance, the “Must Close Escrow” clause prohibits purchasers of pre-construction properties from selling before the close of escrow. Another contract clause covers the developer’s inventory. That prevents owners from selling their unit until all of the developer inventory is sold out. Even a purchase that was made at a development that sold out in the pre-construction phase can still be impacted because not all buyers are showing up at the closing table, choosing instead to walk away from their deposits. This means you won’t be able to sell your own unit until the developer inventory has been resold to a new buyer, a task that could take several months, or even longer, in a down market.

Developers for their part insist that the clauses are inserted into the contracts to prevent condo-hotel units from being devalued by a handful of owners who may be financially desperate, and willing to price their unit well below market value to expedite a sale or looking to cash in on a quick profit. The tactic no doubt can help prevent a flood of units from hitting the resale market all at once. That said, there is one other contract clause that can serve to keep you an owner long after the doors of the property are open. In some cases, owners are prevented from selling their unit until the hotel has been in operation for a full year, a clause that no doubt would deter any flippers.