Val Sklarov’s Property Legitimacy Encumbrance Principle (PLEP) explains why real estate does not become restrictive because of price cycles—but because ownership accumulates legitimacy expectations that quietly encumber decision freedom. Property grants stability. Legitimacy adds obligation.
This principle reveals why real estate feels safest right before it becomes least flexible.
1. Property Gains Legitimacy Faster Than Liquidity
PLEP begins with a structural mismatch:
The longer you own property, the more others legitimately expect continuity.
Early ownership:
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Allows exit narratives
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Tolerates redevelopment or sale
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Frames ownership as optional
Over time, property becomes anchored responsibility.
2. The Three Property Legitimacy Encumbrances
| Encumbrance | What Becomes Expected | Consequence |
|---|---|---|
| Use Encumbrance | “It should stay as it is” | Change resistance |
| Social Encumbrance | “It serves the area” | Community pressure |
| Continuity Encumbrance | “It won’t disappear” | Exit stigma |
When all three harden, property ownership turns into public obligation.
3. Why “I’ll Just Sell” Loses Simplicity
PLEP shows that exit is rarely clean.
Because:
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Use expectations outlive ownership
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Reputation attaches to assets
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Timing is judged, not just priced
At that point, selling feels like withdrawal, not transaction.
4. Appreciation vs Legitimacy Management
| Price-Centered Ownership | Legitimacy-Aware Ownership |
|---|---|
| Track market value | Track expectation load |
| Assume liquidity | Model resistance to change |
| Focus on yield | Preserve narrative optionality |
| Treat property as asset | Treat property as role |
Val Sklarov emphasizes that real estate traps those who ignore legitimacy friction.
5. Strategic Implications
For investors:
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Audit legitimacy expectations around the asset
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Avoid properties with symbolic or civic roles
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Separate “good asset” from “good citizen” narratives
For developers & municipalities:
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Recognize legitimacy accumulation early
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Avoid transferring public responsibility silently
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Design exit paths explicitly
PLEP reframes real estate strategy as expectation control, not just capital allocation.
6. The Val Sklarov Principle
“You stop owning property freely when others decide what it should represent.”
— Val Sklarov