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Asymmetric Information and the Law of Servitudes Governing Land

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  • Antony Dnes
  • Dean Lueck

Abstract

The legal doctrine on servitudes has long been viewed as a Byzantine tangle of doctrine emanating from property law, contract law, and courts of equity. This paper explains the structure of the law governing servitudes on land using key ideas from the economics of information, focusing on easements and covenants and the rules governing their formation and application. We develop a model of land markets that incorporates asymmetric information (adverse selection) and specialization in ownership and use this to offer a rationale for the seemingly ad hoc limits on the use of servitudes. We stress the inability of sellers of land credibly to assure buyers that land is not encumbered by servitudes. Our model explains variations in legal doctrine over time and across jurisdictions, particularly comparing servitudes in the United States and in England. (c) 2009 by The University of Chicago. All rights reserved.

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  • Antony Dnes & Dean Lueck, 2009. "Asymmetric Information and the Law of Servitudes Governing Land," The Journal of Legal Studies, University of Chicago Press, vol. 38(1), pages 89-120, January.
  • Handle: RePEc:ucp:jlstud:v:38:y:2009:i:1:p:89-120
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    References listed on IDEAS

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    Cited by:

    1. Elizabeth Hoffman & Matthew L. Spitzer, 2011. "The Enduring Power of Coase," Journal of Law and Economics, University of Chicago Press, vol. 54(S4), pages 63-76.
    2. Benito Arruñada, 2012. "Property as an economic concept: reconciling legal and economic conceptions of property rights in a Coasean framework," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), pages 121-144.
    3. Fitzgerald Timothy, 2012. "Natural Resource Production under Divided Ownership: Evidence from Coalbed Methane," Review of Law & Economics, De Gruyter, vol. 8(3), pages 719-757, December.
    4. Benito Arruñada, 2017. "How Should we Model Property? Thinking with my Critics," Working Papers 970, Barcelona Graduate School of Economics.
    5. Walter N. Thurman & Dominic P. Parker, 2011. "Crowding Out Open Space: The Effects of Federal Land Programs on Private Land Trust Conservation," Land Economics, University of Wisconsin Press, vol. 87(2), pages 202-222.

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