Virtual Property Rights: Real Estate's Ridiculous Final Frontier
It apparently isn't enough that people all across America are losing their real homes to foreclosure because their real jobs have vanished. Now, we have people going to court suing over virtual-property rights.
You heard me. They are suing over real estate that doesn't even exist except in cyberspace and, apparently, the space between their ears.
This, after the real too-big-to-fail lending institutions lost a ton of real money on poor mortgage-backed investments -- throwing the entire freaking planet into a very real Great Recession that it's still trying to really recover from. (The institutions, meanwhile, pretty much landed on their feet due to a real transfusion of real taxpayer money into their real fat-cat wallets).
And even though the property in the lawsuit is virtual, the money involved is very real.
Confused? Let's backtrack.
A lawsuit was filed recently, according to the Los Angeles Times (the real paper, I think, and not the virtual online one) in Pittsburgh (and you can't get any more real than that, folks. If you've been to Pittsburgh you know what I mean). The suit is against the real company (Linden Lab in San Francisco) that created Second Life, the virtual world that was using digital avatars long before the 3-D flick of the same name ever opened.
Real people use their avatars in this virtual world to do things like purchase virtual real estate. And therein lies the very real problem: They use real money to do so.
And now, the suit alleges, the real folks who run the real company that owns the virtual Second Life are trying to take away their rights over property that doesn't actually exist -- without giving the real investors back their real money.
Following this so far?
Now how's this for a really interesting quote: "It's a unique case," the real lawyer representing the real plaintiffs, tells the L.A. Times.
The paper, quoting from the legal papers, says Linden Lab got something like 50,000 real Second Life users to shell out something like $100 million to buy and develop the virtual property, even charging then "monthly fees that the company likened to property taxes."
Wouldn't you know it. Even in the freaking virtual world, there are real taxes!
Now, says the suit, the company has pulled a fast one by altering the contract to get rid of the entire idea of ownership, even taking back the virtual property. The Times says a company spokeswoman ( I presume a real one, but I could be mistaken) refused to comment.
OK, so I guess it is left for me to comment then.
How sick of a society have we become that, in these gloomy economic times, people are actually spending real money to buy something that is not real? And then, they are surprised that their real money vanished down a virtual sinkhole?
I'm originally from Brooklyn, where I think the reaction to all this would be, "Give me a break!" (Well, I'm leaving out one important word from the phrase that does give it a bit more juice, but you know what I mean.)
Most lawsuits, of course, never end up in court. They are settled out of court. But I hope this one makes it all the way to the Supreme Court. I'd love to be there the day the real lawyers argue before the real justices about property rights for something that doesn't even exist. I'd really love to be there!
Charles Feldman is a journalist, media consultant and co-author of the book No Time To Think-The Menace of Media Speed and the 24-Hour News Cycle. He has written about real estate-related issues for several years--but this is the first time he has written about virtual real estate.