Internet Buyers Paying Thousands for Unbuildable Lots

Internet users visiting sites such as E-bay, are buying land that's miles from civilization, has no roads or utilities and sometimes is underwater.

Known as "paper subdivisions," these undeveloped tracts are the remnants of developers' unfulfilled dreams -- if not outright scams -- particularly in Florida's Osceola, Polk, Volusia and Brevard counties. Buyers are paying thousands of dollars over assessed value for a lot that can't be built on in a subdivision that does not officially exist.

An acre-and-a-quarter lot -- usually assessed at $600 to $1,200 -- fetches 10 times that or more from unsuspecting buyers in Internet auctions. Florida officials estimate there are millions of these unbuildable lots in every part of the state.

Now, some buyers who say they were swindled are speaking up -- and getting results.

The state is responding to complaints from disgruntled buyers by forcing some sellers to offer to buy back the property, citing their failure to follow the state law regulating the sale of subdivided land. Violations can include a seller failing to register land with the state for sale.

According to one of the complaints, the investigation centers on the "alleged sale of undevelopable 'swampland' to buyers over eBay without full disclosure of all material facts relating to condition of land."

The land-sales division does not go looking for unlawful transactions on eBay, said Thomas Butler, deputy press secretary for the Department of Business and Professional Regulation. However, "We do investigate complaints from the public that may involve its use."

Deceptive land-sales practices are not new in Florida. For instance, in the 1960s, the Gulf American Land Co. sold thousands of lots in River Ranch Acres to unsuspecting buyers nationwide before going bankrupt.

Land throughout Florida was often sold in the 1960s and 1970s from telephone boiler rooms or through high-pressure sales meetings as retirement investments. The sales pitches, which often included a free dinner and a movie, would allow buyers to purchase land for a couple of hundred dollars down and interest-free payment of $50 a month. The developers, which often later declared bankruptcy, took cash and never filed the necessary paperwork with local governments or built roads and infrastructure.

Richard Lawrence said the current speculation is destroying the recreational uses of Osceola's Suburban Estates, where he has owned land for several years.

Like similar tracts in Polk and Volusia counties, the 10,449 acres in east Osceola has become a haven for those like Lawrence who enjoy the outdoors.

Suburban Estates is a mixture of cypress swamp, palmetto brush and scrub pine. Sandy roads wind through the property that has through the years turned into a secluded refuge for owners who like to hunt and drive vehicles through the challenging country. The area is gated, and keys are issued to only deed holders by an owners-group calling itself the Suburban Estates Preservation Association.

Osceola County does not issue construction permits in Suburban Estates. Once, it permitted hunting camps, but the lack of utilities and roads made even those problematic, a county zoning official said.

But many investors don't know this, nor do they realize that land values in Suburban Estates have been stagnant for years.

Records show there are thousands of owners, which would make it almost impossible for any developer to buy up enough property to develop Suburban Estates. The same holds true for other areas.