THE ECONOMICS OF LAND TRANSFER AND TITLE INSURANCE

被引:18
作者
MICELI, TJ [1 ]
SIRMANS, CF [1 ]
机构
[1] UNIV CONNECTICUT,DEPT FINANCE U-41RE,STORRS,CT 06269
关键词
LAND TRANSFER; TITLE INSURANCE;
D O I
10.1007/BF01099613
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
In the presence of uncertainty over the title of land (due to fraud or error), a legal system can protect either the current (innocent) owner, or a previous owner who claims title. The predominant system in the United States generally awards title to the latter in the event of legitimate claim. Thus, current owners frequently purchase title insurance to provide indemnification in the event of a loss. In contrast, the Torrens system awards title to the current owner, but provides for indemnification of any legitimate claimants. We evaluate these two systems and argue that if transaction costs are low, both promote efficient assignment of title (according to the Cease Theorem), but if transaction costs are high, the Torrens system is more likely to award title to the party that values it the most (namely, the current possessor).
引用
收藏
页码:81 / 88
页数:8
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