Old-time swamp peddling has gone high-tech, thanks to Internet-auction sites such as eBay.
The pitch -- speculation on near-worthless Florida real estate -- is decades old. But today, a new generation eyeing property for investment or retirement is 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 -- in 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.
Some eBay sellers have owned their lots for decades -- purchased as part of a retirement dream dangled by a high-pressure salesman. Others scooped up lots in tax sales after owners stopped paying property tax on land they realized they never could use.
Still others got ownership by paying as little as $2,000 a lot to previous owners.
Now, some buyers who say they were swindled are speaking up -- and getting results.
"You cannot do anything with the land," said Robert Derogene, a Coral Springs mortgage broker who paid $46,500 for three acre-and-a-quarter lots at a paper subdivision known as University Highlands in Volusia County. "A whole bunch of people were misled, and I didn't like that."
The state is responding to complaints from disgruntled buyers such as Derogene 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.
Derogene's complaint resulted in the sellers agreeing last month to offer refunds to the buyers in 67 transactions, many of whom had complained about their eBay purchases.
Nathan Oliver of Daytona Beach, another owner who has been selling land via the Internet in University Highlands, wouldn't discuss the consent order that he and a partner signed with the state Division of Florida Land Sales, Condominiums and Mobile Homes. The pair had to offer refunds in 187 transactions to avoid a $1.87 million fine.
"I don't have anything to say. I've been honest and sincere with everybody," said Oliver, who, according to the order, agreed to $189,000 in penalties and investigative costs.
The eBay listings can make the land appear more valuable than it is.
One pitch for Suburban Estates in Osceola County calls it a "gated community." Others tout easy access to the beach, Orlando and Walt Disney World. All are miles from the property.
And though some listings acknowledge that a house cannot be built on the property, they leave the impression that someday that could change.
"If you are looking for a site to build a house, you won't be able to use this property for that at this time. One day soon, when this area becomes further developed, this land could be worth a small fortune!!" reads an eBay listing in capital letters for Volusia's Cape Atlantic Estates.
Not every buyer is unhappy, however. Even though hundreds have been offered state-mandated restitution, some want to hold on to their land.
"It's a gamble," said Robert Thompson of Palm Beach, who is one of the 187 University Highlands buyers being offered a refund by Oliver. "I don't know if I ever will be able to build. I believe it's going to take off."
Thompson has seen the value of Florida swampland increase. He cites land once considered swampland in Palm Beach County that sold for about $1,000 for an acre-and-a-quarter 25 years ago. Houses now sit on it, and the land is worth $150,000 to $200,000 an acre.
The state Attorney General's Office has launched separate investigations in Polk and Volusia counties after angry buyers complained about their purchases. The civil investigations involve two companies, one selling land in River Ranch Acres in Polk County, which for decades has been the subject of land scams, and the other running a similar operation at University Highlands.
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."
Price too steep
Rob Walsh, coordinator of Volusia Forever , a group that buys land to preserve it from development, said his organization won't bid for lots on eBay.
"We will not pay eBay prices. We simply walk away from them," Walsh said. "It has made it more difficult to purchase property. Where it really has caused us heartburn, is that it caused the property appraiser to jack up some of the land. . . .''
University Highlands (9,400 acres) and Cape Atlantic Estates (11,400 acres) are two of the largest in Volusia, which also has many smaller paper subdivisions.
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.
Setback for recreation
Richard Lawrence of Kissimmee 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.
The best thing that could happen would be for somebody to purchase the land and replat it, said Jo Thacker, Osceola's acting county manager. The thousands of owners would make that process difficult, but she said increasing land values eventually might attract a developer willing to take on such a project.
"I believe it will get to the point that someone will try to go in and accumulate pieces or large tracts of it," she said. "It could be a while. Someday they [owners] could get some money out of it."