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Caitlin Applewhyte

Land Owner Get Greedy

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I was so excited about the news that there will be in increase in prims for FREE from Linden Labs! What a great gift LL has given. But that excitement quickly disappeared when estate owners got greedy! Instead of ALL us benefiting from this great gift, those that own the sims thought this was a great way to make more money!

Don't be fooled! They may say that the maintenance fees have gone up but that is completely wrong! LL earlier this year actually LOWERED the maintenance fees! When that happened, land owners weren't nice enough to pass that along to all of us who rent or "own" land. Instead they padded their pockets and they are doing it again with the prim increases!

LL is trying to make the user experience better for all of us! I applaud them for doing it too! But because of greed, the only ones truly benefiting are the estate companies who are charging us for the new prim counts! Sadly there is no way to boycott these companies because they control the private estates.

Some companies are even charging these increases to current land owners, such as RGF, who are not honoring the contract made when the land was purchased! It disgusts me how greed has taken away the enjoyment of SL that LL is trying to spread.

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It's a free market, though, land is pretty much a commodity, and there's certainly enough competition in the Estate land market, one would expect any "greed" to be quickly wiped out as margins are driven inexorably towards zero.

If that doesn't happen, maybe it's land that's not quite "commodity" (customers, for whatever reason, hesitant to switch to a competitor with a better offer), or... I guess, if no competitors offer the extra prims, it would have to be something broken in the market, such as price-fixing collusion.

In practice, collusion is rare because it's so fragile -- ask OPEC -- so personally I'd more suspect wishful thinking by Estate owners, to be corrected soon enough.

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Caitlin Applewhyte wrote:

I was so excited about the news that there will be in increase in prims for FREE from Linden Labs! What a great gift LL has given. But that excitement quickly disappeared when estate owners got greedy! Instead of ALL us benefiting from this great gift, those that own the sims thought this was a great way to make more money!


think your's is a exception, most i know simply let the land as is... 512sqm stays 512 sqm if you rent that..including the prim raise...

Simply MOVE out to another.....

 


Caitlin Applewhyte wrote:

Don't be fooled! They may say that the maintenance fees have gone up but that is completely wrong! LL earlier this year actually LOWERED the maintenance fees! When that happened, land owners weren't nice enough to pass that along to all of us who rent or "own" land. Instead they padded their pockets and they are doing it again with the prim increases!


LL did NOT lower the maintenance fees, they only offered to buy it down ... small but huge difference.. you really think a simowner with over 500 sims ( as miy landlord has) has 300.000  ( = 500 * 600)  dollars spare on his shelves?

NO..... so they didn't buy all down.. and pay still the same.


Caitlin Applewhyte wrote:

LL is trying to make the user experience better for all of us! I applaud them for doing it too! But because of greed, the only ones truly benefiting are the estate companies who are charging us for the new prim counts! Sadly there is no way to boycott these companies because they control the private estates.

They make it better for landowners... if you have a lease for prims... instead of land, you get nothing. Thats a huge mistake some make... rent  100 prims... guess what... after the raise you still only rent 100 prims...

When you rent land, see my first remark... MOVE, if you rent prims... sorry but thats the deal you made.

Greed or not... it's business.

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It's unfortunate that you are defending a company that has a reputation of bait and switch. It is a rare occasion that a realtor raises tieron existing land owners and lowers tiers on land that has been returned because of the tier increase.

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If we were facing tier increases for a residence then it would be an easy decision to move but we have a business that moved to the new location due to the savings that was wiped out by 2 rate increases within the first 2 weeks. The responses I have received from RGF have been far from the truth and are further proof of their unethical business practices.

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So lets look at this by the numbers and see what landlords MUST charge to break even under normal circumstances. For purposes of running the numbers we will assume that a) the region is a full region, b) that the region is not grandfathered or bought down (ie. still costs 295.00 USD per month), c) that the land owner rents 100% of the available prims and d) that the landowner is paid in L$ and converts at a rate of 261 L$ per USD. This nets US$ 295.80 from 80000 L$.

So this means that before the prim increase land owner needed to charge at least 1.33 L$ per week per prim to break even. (80000/15000)/4.

After the prim increase they need to charge 1 L$ per week per prim to break even. (80000/20000)/4.

The prim allotment increase very significantly decreases the weekly cost per prim to break even. If a land owner had their price point at 1.50 per prim per week before (a fairly common price point) and they now increase your cost per week to match your new prim allotment without reducing the price per prim they very much just adding additional money.

It has already been pointed out that LL did not actually reduce the price of region tier. They did give, for a limited time, the option to pay a one time fee (of $600) to set your region to the grandfathered pricing (195 per month instead of 295). That pricing has expired so if you didn't do it you cannot now. 

The truth is that the cost to get regions to begin with is needs to be recouped by land owners. if they spend 300 - 500 on an aftermarket region they need to charge enough per month to cover the 295 for on going tier and then find extra money to recoup that 500. If they did buy the grandfathered and paid 600 thats now 1100 bucks they are in the hole from day 1. If they had 15000 prims before at 1.50 per prim per week that brings in 90000 per month or 10000 L$ in profit or about $37. Keeping that price point at 1.50 extended out to 20000 prims means 40000 in profit per month or a little less than 150 per month. So assuming 100% occupancy, thats at least 4 months to just get back to where you were. Assume you want to build up about a months worth of spare lindens to account for people moving out or paying late, and of course landowners want to make  money. In this light... well the prices make more sense. The land game is very, very low margins and I am sure many are seeing this as a way to actually make some money.

however, there are bound to be land owners out there that will look at this as a way to price aggressively and help ensure that they are 100% full. There is always a better price.

 

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The prims were given to the landowner not the tenants. 

If the landowner rents all the land on a sim and there is no common area then it makes sense to give the extra prims to the tenant since there is nothing else they can do with them.  However, if they don't rent land, say they stack platform environments in the sky in layer and rent those, ,the land is group owned and your rental gets to use part of the land and a certain amount of prims, or you have a parcel and get to use a certain amount of prims over and above whatever landscaping or buildings are on the lot,  then you aren't renting the land, you are renting prims. 

In the later of the above example, the landowner can choose what they want to do with those extra prims. Some landowners in that situation may choose to add more rentals, while some may choose to improve the sim by adding more landscaping, better rental homes, road, or common areas like a clubhouse or pool. 

I get tired of people accusing landowners or merchants of being greedy just because they don't like the price they have to pay for a particular item or place to live or the decisions they make. The bottom line is that it's the landowners choice what to do with the extra prims.  It is your choice whether to stay or move if you don't like it.  The free market will decide if the landlords choice was a good one or not.  It has nothing to do with greed.  It's just business.

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MattMonroe wrote:

...

It is a rare occasion that a realtor raises tieron existing land owners and lowers tiers on land that has been returned because of the tier increase.

Is it? All the landowners I have talked to about the prim increase have given the extra prims to the renters at no extra charge. But then again, I haven't discussed it with that many so maybe they're all among those rare exceptions.

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MattMonroe wrote:

It's unfortunate that you are defending a company that has a reputation of bait and switch.

I wasn't defending anybody, I was explaining how one should expect the market to behave. I don't know anything about the specific Estate identified, and frankly I'm a bit surprised to see it still named in the thread, that being against forum policy (usually, but not quite always, so it's surprising but not unprecedented if it stays).

Anyway, a business use of the land is a perfect example of how land can become "not quite a 'commodity'" so tenants hesitate to switch to a competitor.

On the plus side, though, that makes the choice of staying or moving a rational business decision. That might even be easier than deciding to move from residential land encumbered by nostalgia, community affect, etc.

 

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Amethyst Jetaime wrote:

The prims were given to the
landowner
not the tenants. 

If the landowner rents all the land on a sim and there is no common area then it makes sense to give the extra prims to the tenant since there is nothing else they can do with them.  However, if they don't rent land, say they stack platform environments in the sky in layer and rent those, ,the land is group owned and your rental gets to use part of the land and a certain amount of prims, or you have a parcel and get to use a certain amount of prims over and above whatever landscaping or buildings are on the lot,  then you aren't renting the land, you are renting prims. 

In the later of the above example, the landowner can choose what they want to do with those extra prims. Some landowners in that situation may choose to add more rentals, while some may choose to improve the sim by adding more landscaping, better rental homes, road, or common areas like a clubhouse or pool. 

I get tired of people accusing landowners or merchants of being greedy just because they don't like the price they have to pay for a particular item or place to live or the decisions they make. The bottom line is that it's the landowners choice what to do with the extra prims.  It is your choice whether to stay or move if you don't like it.  The free market will decide if the landlords choice was a good one or not.  It has nothing to do with greed.  It's just business.

Agree wholeheartedly.  Do people even know what free-market means? Everyone has a choice of where to spend their money. No one is forced to do so. If you don't like it don't buy it. If it's too expensive for you don't buy it.  Sassy Romano has a pose ball for sale for 27 million lindens. If you don't want a 26 million Linden pose ball don't buy it. Instead people repeatedly flag it! 

 Agree also with your point about the value landlords provide. Not only do many provide a real community, beautiful landscaping and helpful services, but reputation is worth a lot  in Second Life, where everyone knows that renting from someone can be risky. Knowing you can depend on the honesty of your landlord is worth something. 

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Caitlin Applewhyte wrote:

I was so excited about the news that there will be in increase in prims for FREE from Linden Labs! What a great gift LL has given. But that excitement quickly disappeared when estate owners got greedy!

PLEASE!

Not *ALL* estate owners got greedy. Correct your words.

Some did, but most of us - including me - passed the bonus on fully.

And do you know what, I wear the loss in exchange too - 248 to 260 now - I have not increased my rents to cover that shortfall.

 

Caitlen, hun, some advice for you: If you don't like how your current agent is dealing with you find a new one. There are hundreds of us, really. Some have battery farm estates where they crowd as many people onto a sim as they can, some have themed communities, some have pre-landscaped, some offer the cheapest possible price.

If you look around you will find someone who rents something perfect for you.

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Pamela Galli wrote:
... Do people even know what free-market means?...


For the entitled, when they are the person having to pay for something they want, a free market means greed.  However when they figure out how to make something they can sell or can afford to buy land to rent out, then all of a the sudden the definition of a free market changes and they join the greedy enemy.:smileywink:

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It is unfortunate that so many preconceived opinions are rampant in an argument that some don't have all the facts or have misconstrued the facts. Fact #1: property was purchased at an advertised price. The date was October 23rd, then a notice was received that the tier was to be raised. I then proceeded to inquire with the realtor as to the reason to raise the tier. Following a Skype conversation with the owner of the company. I was left with the realization that I had been handed a lot of information that was not true. Fact #2: On November 6th, I received another notice that tier was to be increased along with all the sims that I had purchased from this realtor. Fact #3: the purchase on October 23rd was to decrease the cost of my established business and to provide further features to that business. Moving my business was out of the question and would have resulted in severe economic hardship to my business as well as to me personally. Since the inception of my business, my goal has been to break even and not to make a profit. Fact #4: This realtor had virtually no inventory before raising tiers and since then has had over 100 properties returned because of the increases. Now in order to sell those properties, the tiers have had to be lowered to attract new buyers. Since this realtor practices bait and switch, I fear that these new buyers will suffer from tier increases. Fact # 5: I have been one of the owners of a real estate company when one of the primary owners stole the tier payments and forced a large number of property holders to lose their homes and businesses.

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Amethyst Jetaime wrote:


Pamela Galli wrote:
... Do people even know what free-market means?...


For the entitled, when they are the person having to pay for something they want, a free market means greed.  However when they figure out how to make something they can sell or can afford to buy land to rent out, then all of a the sudden the definition of a free market changes and they join the greedy enemy.:smileywink:

Or to put it another way: It's the playground where everybody love to play it rough until they stub their toe and go all Trump and run back to mommy to cry about how unfair it is.

In the free market of 19th century England dairies used to spike their skimmed milk with lead to make it look richer and fatter.

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Jokes aside, you do have all my sympathy, Matt. I know how much work and how much love you have out into 1st Chapter Plaza, I know from experience how well you treat your own renters and I'm really sorry to hear you've run into such problems You're the last person to deserve that kind of treatment.

But I don't think Qie was trying to defend anybody, he was just stating the facts. Second Life is a free, unregulated market and that means it's wide open for all kinds of liars and cheaters. Maybe we shouldn't make crude jokes about it but what else can you do? It's laughing just to keep from crying really.

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This thread and my replies about it were about the OP feeling entitled to get all the extra prims the landowner was given.  This was NOT about your situation where you faced a tier increase shortly after you rented your sim since you just now presented your case with the facts as you know them.

I haven't spoken to your case, which is entirely different, but will now.   When you rent a sim or other land  you have to determine if you are being given a promo price for a certain period of time or if the estate owner guarantees the price remains the same unless LL increases the tier.  Many estates do offer a guarantee while others offer a promo price to get you to rent then increase the rent after the promo period expires.  Other estate owners raise the rent anytime they can get away with it. 

You have to ascertain what you are dealing with PRIOR to renting it to begin with.  You do that by talking to current renters on the estate,and finding out how long they have rented what increases they've seen etc.  You find out how long the estate owner has been in business and asking for references etc. because a bad landlord doesn't stay in business long.  You can do this by asking the estate owner specifically if it's a promo price or guaranteed etc. etc etc. Finally you can ask other residents who rent sims, specifically merchants, for recommendations.

As to fact 5, it happens and usually to people who go for the cheapest rent they can get with a landlord that hasn't been in business long. That is not to say that this is right or its the renter's fault.  It's a terrible thing to happen to people.  

As for you, either you didn't do your due diligence or you are dealing with a dishonest landlord.  Always rent from a established estate owner that has been in business a long time even if it costs a bit more, because they don't pull bait and switch, raise rent without a lot of warning and a good reason or abscond with the rent money. 

Now the free market has responded to your landlord by people moving out.  I suggest you do the same if you are unhappy.  If you aren't making a profit you have nothing to lose, even if you have to shut your business down a week to move.  If you are, stability in your rent amount will be worth it in the long run.  You can even look into buying your own sim on the secondary market to get that stability.  If you notify your customers in advance that you are moving most will be very understanding.  Loyal customers will wait.  You may lose a few sales otherwise but compare that to the cost increases you face.  Don't air this dirty laundry in the notice as that alienates customers.

Edited after reading Chin's reply which mention sub lessors:  If you are subleasing to other stores then talk to your tenants and explain the situation to them.  You will probably find that most are sympathetic and will stay with you when you move.  Those that don't, it's their choice and it's just business.  However, if you run your sim well, your loyal tenants will probably recommend it to other merchants and you may very well find that you gain tenants to replace those that you lost.  I don't know you but I wish you the best of luck in finding a new sim and getting out of the situation you find yourself in.

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Oh, now I think maybe I finally understand what the OP was talking about. I'm not quite sure of the details, though, and it makes all the difference.

Estates got a free 33% increase in Land Impact (from 15,000 to 20,000) which they'll be able to boost all the way to a 100% increase (to 30,000 LI) for a modest US$30.

Now, if an Estate chooses to raise its rental fees per sq.m. to correspond to that first, free level of LI increase (presumably because they've been denominating their rates as "per prim"), that's a risky business practice. They may be able to get away with it if they were undercharging for their services before, or if they're betting that the whole SL Estate land market will collapse before it matters that they're no longer competitive -- risky and yeah, "greedy" in a way, milking their customers for one last suck at the teat. 

I had not heard of anybody doing this, exactly, and I am a bit surprised. I do, however, see region Object Bonus levels adjusted downward thus depriving existing parcel tenants of the free prims. That doesn't raise existing tenants' rents, and if the Estate uses those reserved new prims to improve the experience with new infrastructure content, it may even be a smart move, elevating the region beyond mere commodity land. (If they use it to simply increase the number of tenants, though, that's much the same risk of becoming non-competitive by retaining a constant per-prim price while others pass on the savings. It's just not as abrupt as directly hiking existing rents for the extra prims.)

Now, on the other hand, if an Estate is merely passing on the tiny extra 10-15% fee to their tenants to pay for that "super sim" doubling of Land Impact, complaining about that would be absurdly cheap and short-sighted; it's by far the best deal LL has ever offered.

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To clear things up...Matt and I are talking about the same land. I am his girlfriend and live on the same sim as Matt's mall.

The issues here is not about my feeling entitled to more prims. Matt and I have a full sim so the increase in prims was only expected when LL increased the prims on the estates..and we did get those prims.

The issue here is how the Land Management handled this increase. As Matt explained, we bought the sim and then immediately our tier was raised not once but 2 times. This coincided with the announcement that LL was increasing the prim count on all land. The land was NOT bought with a promotional rate and Matt had several sims from this place before adding this additional sim.

In my opinion, this increase in tier was due to greed. I have had a lot of experience owning land from a small 512 sqm lot to setting up a brand new sim for a charity. So I have had enough experience with land in SL to recognize when a land management company gets greedy. In all the times I have owned land, this is the first time I have had my tier increased. Most will agree that renting or buying land from a management company is entering into a contract.I feel this management company breached this contract when they raised the tier twice in a very short period of time.

I apologize for not explaining this in my first and original post.

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Shudo wrote:


Caitlin Applewhyte wrote:

I was so excited about the news that there will be in increase in prims for FREE from Linden Labs! What a great gift LL has given. But that excitement quickly disappeared when estate owners got greedy!

PLEASE!

Not *ALL* estate owners got greedy. Correct your words.

Some did, but most of us - including me - passed the bonus on fully.

And do you know what, I wear the loss in exchange too - 248 to 260 now - I have not increased my rents to cover that shortfall.

 

Caitlen, hun, some advice for you: If you don't like how your current agent is dealing with you find a new one. There are hundreds of us, really. Some have battery farm estates where they crowd as many people onto a sim as they can, some have themed communities, some have pre-landscaped, some offer the cheapest possible price.

If you look around you will find someone who rents something perfect for you.

I never said "ALL" estate owners...I said "estate owners" i.e. the owners of the land which I bought the sim from.

If the land was only for my personal use, I would have left and found a better company to work with but that always possible for business owners. Matt had just uprooted his successful mall to move to this full sim so moving again would be detrimental to the business. 

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I understand you feel like you have a contract, but unless you have a RL contract that you can take to court, the only contract you have lasts until the next date your tier is due. But even then it isn't for certain as an estate owner can boot you off at any time for any reason, or no reason, and keep your money.

Some convenants state if the rent is increased or the covenant changed you will get a certain number of days notice.  But an estate owner can change the covenant on a whim at any time, so that again is not a contract.  Even if you have a notecard from the estate owner that proports to be a contract, it isn't, because it is not enforceable by a RL court.  Only a RL document showing the RL names of all parties and signed by all of them is enforceable in most circumstances.

The estate owner has total control of their land and LL will not intefer with that in any way unless there is a clear violation of the TOS.  Increasing rent, booting people at any time for any reason, and changing the covenant on a whim is not a violation and in fact are rights protected by the TOS.

I don't like what your estate owner did to you at all.  The only justification I can see to it at all is that if it is a full sim and they buy the extra prims to bring it up to 30k prims.  If they pulled these kinds of shenanigans once, they are liable to do it again in the future or deal wrongly with you in other ways.  That's why I told Matt he should move to a more reliable estate or get his own sim.

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Caitlin Applewhyte wrote:

Matt had just uprooted his successful mall to move to this full sim so moving again would be detrimental to the business. 

It would but Eldowyn Insham actually did something like that. After eight years in the same sim, with a Medieval Fantasy Hunt and christmas market just started and with hardly any warning, all of a sudden United Inshcon had moved to a new sim because of "disagreements with the landowner". Not sure if it had anything to do with the prim increase but the timing is right.

Eldo seems to have gotten away with it and the hunt may actually have helped since the hunters have to ask where the new base is. Even so, it must have been a very though decision but sometimes you just have to cut your losses and move on.

The best solution is perhaps to find a better offer somewhere else, then tell your current landowner that if they can't match it you have no choice but to move. If they know what's good for them, they'll drop the price. Of course if you have a really bad landowner you may find yourself homeless an hour later, better be prepared for that.

You have a good group with more than 1000 members and also the groups for all your artists so I don't think moving will affect your visit count very much. The problem, apart from all the work it takes backing up an entire sim and re-rezzing it somewhere else, is to convince your tenants to come along. Talk to them well in advance and tell them how it is. I don't have a store at your place at the moment and can only speak for myself but I would be more than happy to move if it meant lower rent and I think the store owners you have now will be too.

 

Edit: Did anybody foresee that the prim limit increase would cause problems like this? It's not unique. While I was writing this post I was also on IM with a friend who's running a network of affiliate stores across SL. He told me several of his stores are still on the old price/prim limit and he's looking for new locations for all of them.

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ChinRey wrote

Edit: Did anybody foresee that the prim limit increase would cause problems like this? It's not unique. While I was writing this post I was also on IM with a friend who's running a network of affiliate stores across SL. He told me several of his stores are still on the old price/prim limit and he's looking for new locations for all of them.

I think a lot of the 'trouble' results from a misunderstanding of what is exactly being rented.  If your friend has stores in malls, generally you are renting prims not land. This is particularly true if the mall land is group owned.  When you rent land, generally you have control of the land tools.  Judging by several posts on this forum, tenants renting prims expected to get the additional prims for free.  However they just assumed it would happen but the the landowner made another choice.

The prims were given by LL to the landowner and they can choose what to do with them.  Some may give them to tenants, some may use them to add tenants or rent the additional prims to merchants who want more to increase owner's financial stability, some may use them to improve their sim with better landscaping or better builds to attract and retain tenants, and some may just decide to use them for personal use.  It is then the tenants choice to stay or leave. 

This is a prime example of the free market at work. It will be interesting to see how it all pans out.

 

 

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Caitlin Applewhyte wrote:

Matt and I have a full sim

Sorry this is off-topic, but it's something I've always wondered: Folks who rent full sims from Estates -- why? Why not just buy a "used" sim and become your own Estate? Or, worst case, pay the Lab to set-up a brand new sim and become an Estate? There's some up-front cost to amortize, sure, but is that what deters people from doing it? Or is this to avoid market-distorting VAT? Or something else entirely? I can't imagine there's any useful service provided by an Estate to a full-sim rental.

(Yeah, this is a very basic part of the SL land market but it's a mystery to a Mainlander never involved in the "business end" of Estate rentals.)

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Amethyst Jetaime wrote:

I think a lot of the 'trouble' results from a misunderstanding of what is exactly being rented.  If your friend has stores in malls, generally you are renting prims not land.

Yes, and he told me he understood that.  But of course, he doesn't want to pay more than market price for those prims so move the stores he does. I think we're going to see quite a few malls emptying because their owners don't udnerstand this. ;)

It's different when it comnes to cases like Caitlin's and Matt's. They can't simply say they don't want those extra prims. Basically, they have to pay extra for something they didn't ask for and that wasn't included in the deal.

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Why does it seem like this company is trying to run people off. I was going to get a homestead  guess I waited 1 week to long becuase now the price of tier has gone up. The land barron didnt do anything new that cost them money they dont have a new tier price put on them but because the lab decides 5000 on a homestead is the new norm their all raiseing their prices. Good job Lab thats what we all wanted higher tier. shakes head. :smileyfrustrated:

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