WAILUKU, Maui — In another sign that South Maui's real estate market is contracting, two would-be purchasers of luxury Wailea condominiums are suing the developer and seeking to get their $350,000 deposits back, The Maui News reported.

David Maniatis of Texas and Judith Dunham of California signed reservations for units at the 120-unit Ho'olei early in 2005, at what now looks like the peak of the real estate market.

Their units are close to completion and rather than pay a couple of million each to complete the deal, they want out.

Both allege failure by the developer, Wailea MF-9 Developers, and the real estate sales company, Wailea Group LLC, to fully comply with the federal Interstate Land Sales Act as one ground to void the agreement.

Both lawsuits also allege that the seller failed, as called for in the contracts, to deliver a final public report as approved by the state Real Estate Commission.

Richard Rost, representing Maniatis, says his client would then have had a 30-day period to nullify the contract if that part of the agreement had been followed.

Since real estate values have been falling, a buyer could have been tempted to back out.

Jim Worley, principal broker at Pali Kai Realty, said he was not aware of the two lawsuits, but, "it is very obvious that a number of properties that were committed for in 2005 but not delivered to the buyers until late 2006 or 2007 are not worth the current purchase price."

And, he says, there has been "no movement" in the market to suggest values are going up again.

The suits allege generally the same failure to adhere to both the wording of the contract and the federal law, but they have some differences. Both seek treble damages.

Maniatis is suing Martin Quill, Wailea MF-9 Associates LLC, Wailea MF-9 Developers LLC and Wailea Group LLC. Dunham, represented by Gordon Stewart, is suing Wailea MF-9 Development and Wailea Group.

Wailea Group is headed by Paul Lambert, who could not be reached for comment. The other defendants are all associated with Quill Group. Martin Quill said Monday that he was aware of the lawsuits but had not been served and had no comment.

Rost said the plaintiffs had the option of going to either federal or state court. Both lawyers chose to file in 2nd Circuit Court.

Although Maniatis did not learn about it until a few weeks ago, Rost says that within nine days after he deposited nearly $350,000 into an escrow account, the developer began taking money out.

That was not what Maniatis expected, and by the time he became aware of it - when he was asked for more money this year - the account was empty. It was not really an escrow account, says Rost, because as ordinarily understood, an escrow is a two-party agreement, and his client never signed.

He says the way the developer treated the deal, the buyer was obligated to buy, but the seller was not obligated to sell.

Such a one-way deal could never become a binding and enforceable sale, under state law, and therefore his client is entitled to withdraw whole, according to Rost.

Stewart's complaint is less detailed, and he could not be reached for comment. But it alleges violations of the state Unfair and Deceptive Trade Practices Act.

Rost says Maniatis never did receive a copy of the final public report, which is a step in completing a horizontal property regime declaration (condominiumization). He says there are material differences between the contingent final public report and the final report, such as liability of buyers for potential repairs to the Wailea Blue Course waterline that his client never knew about but which could have affected the value of the deal.

Rost's complaint says that if the seller intended to use deposit money to pay for construction, that triggered state disclosure requirements, which he says were not made.

Neither plaintiff has asked for a jury trial.

Ho'olei is mauka of the Grand Wailea Hotel Resort & Spa and was marketed with privileged access by condo owners to the hotel's amenities.

For more Maui news, visit www.mauinews.com.