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Building encroachments


  • Matteo Rizzolli



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

    1. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters,in: Essays in the Economics of Crime and Punishment, pages 1-54 National Bureau of Economic Research, Inc.
    2. Williamson, Oliver E, 1973. "Markets and Hierarchies: Some Elementary Considerations," American Economic Review, American Economic Association, vol. 63(2), pages 316-325, May.
    3. Hylton Keith N, 2005. "The Theory of Penalties and the Economics of Criminal Law," Review of Law & Economics, De Gruyter, vol. 1(2), pages 175-201, September.
    4. 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.
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    More about this item


    building encroachments; adverse possession; comparative law and economics; property; land law; optional law; property rules; liability rules;

    JEL classification:

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

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