1. Optimal statute of limitations under land development timing decisions
- Author
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Charlene Tan Lee and Jyh Bang Jou
- Subjects
business.industry ,media_common.quotation_subject ,05 social sciences ,Economic rent ,0211 other engineering and technologies ,General Social Sciences ,021107 urban & regional planning ,Statute of limitations ,02 engineering and technology ,Statutory law ,0502 economics and business ,Land development ,050207 economics ,business ,Land tenure ,Adverse possession ,General Environmental Science ,Law and economics ,media_common - Abstract
In a recording title system, a landowner faces two risks: the risk of a claim from a previously dispossessed owner and risk of being dispossessed by adverse possession, squatting, or encroachment. In this study, we build a real options model to investigate the issues regarding the optimal statute of limitations. In the absence of any uncertainty, a longer statute of limitations delays land development, and thus a regulator may allow for a more lenient policy of statutory limitations for land located in the suburb than in the city center. At any given location, greater uncertainty in urban rents will cause a landowner to wait longer. Anticipating this outcome, the regulator should shorten the statute of limitations to increase the likelihood for the current owner to retain title.
- Published
- 2018
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