Just Because You Can…

There’s an old saying that goes “Just because you can, that doesn’t mean you should…” People will usually quote it when someone has just done something that is technically possible, and may even be legal or socially acceptable, but is still not a good idea. The classic admonition is that given to someone who has decided to eat or drink to excess, stating that they have the food or beverage, time to consume it, legal right to do so, and so on. In today’s case, however, the same truism can be applied to real estate and obsolete property laws…


As reported on the News OK website there’s a company in Guthrie, Oklahoma that is buying small parcels of land – often as small as a few feet at the end of a driveway, or the alleyway through a condo complex – at county auctions for pittance fees, and then offering to sell them to the owners of the main property for vastly inflated amounts. The article mentions a shared driveway, for example, that was purchased for $1,584 which is now being offered to the owners of the complex served by that driveway for $80,000. The residents are calling it extortion, the owners are suing, and the state courts are still trying to figure out what the law actually says…


It was tempting to file this under the “Profiles in Scumbaggery” category, but the fact is that the businessman behind these outrages isn’t actually doing anything illegal; if you are too careless to secure the right-of-way to and from residential property you are developing, or notice that the right-of-way is being sold at county auction for a pittance, then you probably deserve to be taken advantage of. More to the point, perhaps, you almost certainly WILL be taken advantage of, as soon as anyone notices the situation. The man being profiled (and lambasted) in our story is hardly the only person doing such things in Oklahoma, let alone the United States, let alone the whole world. It’s one of the reasons it’s so important to have your real estate transactions handled by professionals whenever possible, especially when you’re dealing with commercial properties. That said, it’s still not the kind of business practice that will win you any friends…


The point I’m going after here is that while the business dealings profiled in the linked story are perfectly legal, they are also things that will cause your neighbors to excoriate you in the local paper, assuming that they don’t attempt something worse. In this particular case, the residents are taking legal action, attempting to get the sale of their driveway overturned, and talking about ways to drive the businessman who did this out of business. I can’t help thinking that as much fun as it might have been to charge 50 times what you paid for something, it would have been a better business model to have asked for $2,000, $4,000 or even $10,000 for the tiny “parcel” involved – the later amount is still not that unreasonable, given that the property owners were oblivious enough to be caught by surprise by the sale, and it still represents a 634% markup on the original price. The businessman in our story would then have the opportunity to conduct many similar transactions in the future, without having everyone in his community howling for his blood…


The point here is that just because something is legal, and will (potentially) fetch you 5,000% of what you paid for it, that it may not actually be a good idea in the long run. Or, as the old saying goes, “Just because you can, doesn’t mean you should…”