Optimal statute of limitations under land development timing decisions

Jyh Bang Jou, Charlene Tan Lee

Research output: Contribution to journalArticlepeer-review


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.

Original languageEnglish
JournalAnnals of Regional Science
Issue number1
StatePublished - 13 Feb 2019


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