Regulating the Subdivided Land Market
![handle is hein.journals/hlr81 and id is 1558 raw text is: REGULATING THE SUBDIVIDED LAND MARKET
[He] rehearsed the mosquitoes till they wouldn't bite you until
after you'd bought. Will Rogers I
Sales of subdivided land to out-of-state purchasers have currently
reached an estimated 700 million dollars annually.2 Promoters pur-
chase large blocks of undeveloped land in expanding parts of the
country such as California and Florida3 and, with the aid of modem
communications media, offer them lot-by-lot across the nation for
immediate home ownership, future retirement, or pure speculation-
all at a low price. The attraction of a bargain and the risks inherent
in buying at a distance combine to produce opportunities for deceptive
sales practices.4 Moreover, volume sales and a resulting nationwide dis-
tribution of title pose particular problems for areas where the land
is located.5 Thus far, regulation of such sales has been limited
primarily to prosecutions under the federal mail fraud statutes and
scattered state legislation modeled on securities laws. With the in-
creasing concern for consumer protection and the burgeoning growth
of this industry, however, specific state and federal intervention has
been demanded 6 in order to protect not only individual purchasers
but the community's interest in the orderly development of its land
as well.
I. MAKET CHARACTERISTICS
The subdivided land market has focused on a source of capital
largely bypassed for other forms of investment - the limited cash
' Said of Carl Graham Fisher, incorporator of Miami (1915). Quoted in
Tindall, The Bubble in the Sun, i6 Am. HERITAGE, Aug. 1965, at 76, 79.
2Hearings on Interstate Mail Order Land Sales Before the Subcomm. on
Frauds and Misrepresentations Affecting the Elderly of the Special Senate Comm.
on Aging, 88th Cong., 2d Sess., pt. x, at 3 (1964) [hereinafter cited as Hearings
on Interstate Mail Order Land Sales]. This figure, although only a rough esti-
mate, also approximates the total of the estimates of 35 states answering a Har-
vard Law Review questionnaire.
' Land prices have been rising generally, but at a particularly high rate in
areas such as California and Florida. See Jundt, The Land Price Rise: Will It
Continue?, 34 RFAL ESTATE AxALYST 109 (x965); Still More Gold in California
Land, Bus. WEEE, Jan. 23, 1965, at 112, 114. Some analysts expect a renewed
boom in land sales in the x970's. See Interview with Roy Wenzlick of Roy
Wenzlick & Co., Investment Advisers, St. Louis, in 63 U.S. Naws & WORLD
RE., July 24, 1967, at 95, 96.
' The Post Office Department, on the basis of its investigations, estimates
the loss to the public to have exceeded $5o million. Letter from H.B. Montague,
Chief Postal Inspector, to the Harvard Law Review, Feb. 7, 1968.
' See Hearings on Interstate Mail Order Land Sales, pt. i, at 13, 24-25, 71;
cf. Lee & Hauck, Excessive Land Subdivision in the New Jersey Pine Area, 19
J. LAwD & PuB. Urn.. ECON. 207 (i943); Johnston, Constitutionality of Sub-
division Control Exactions: The Quest for a Rationale, 52 CoRNELL L.Q. 871, 896
n.113 (1967) (results of early uncontrolled speculation in New Jersey).
'Such was the general tenor of the testimony presented in Hearings on S.
z75 Before the Subcomm. on Securities of the Senate Comm. on Banking and
Currency, goth Cong., ist Sess. (x967) [hereinafter cited as Hearings on S. 275].
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Regulating the Subdivided Land Market
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