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Building encroachments

Author

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  • Matteo Rizzolli

Abstract

Property law usually reacts to encroachments with ejectment. Building encroachments differ, as restoring landowner’s property claims implies the reversal of often large costs sustained by the builder. The authority faces thus the following dilemma: either it stands by the landowner and faces the social costs of undoing significant investments, or it defends the investment of the builder at the cost of neglecting landowner’s claims. To address building encroachments, national property laws have deployed interestingly different remedies that range from a property rule in favor of the landowner to a property rule in favor of the builder with a variety of liability rules in between. The paper models the builder-owner conflict after the theory of optional law (Ayres, 2005), it frames different national solutions into a common analytical setting and it evaluates the different laws in their relative allocative and distributive outcomes. Moreover the paper offers support to the idea that property law may implement put-option types of remedies.

Suggested Citation

  • Matteo Rizzolli, 2008. "Building encroachments," Working Papers 136, University of Milano-Bicocca, Department of Economics, revised Apr 2008.
    • Handle: RePEc:mib:wpaper:136
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    References listed on IDEAS

    as
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    4. Jacques, Stephanie, 1992. "The Coase Theorem and the Endowment Effect," SS-AAEA Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 9, October.
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    6. Jeong-Yoo Kim, 2003. "A Proposal for a New Rule of Adverse Possession," European Journal of Law and Economics, Springer, vol. 16(3), pages 289-301, November.
    7. Stephanie Jacques, 1992. "The Endowment Effect and the Coase Theorem," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(5), pages 1316-1323.
    8. Miceli, Thomas J. & Sirmans, C. F., 1995. "An economic theory of adverse possession," International Review of Law and Economics, Elsevier, vol. 15(2), pages 161-173, June.
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    More about this item

    Keywords

    building encroachments; adverse possession; comparative law and economics; property; land law; optional law; property rules; liability rules;
    All these keywords.

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law

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