Property Rights in The House of Sand and Fog

[nini2287]

I watched the movie "The House of Sand and Fog" the other day.  It was an excellent movie, but it brought up an interesting property rights question.

Due to a tax mixup, person A's house, valued at $45,000, is repossessed by the county and within a couple days is sold to person B for that price.  Person B immediately adds improvements to the house at a cost of $5,000 and due to the nature of the property the value rises to $174,000.  Shortly thereafter the government realizes its mistake.  So the question is:

A) Who should have possession of the house?

B) How much should each person be compensated?

[John Dibble]

Wierd situation. Would probably require some mediation between the two people, as both have reasonable claims to ownership after I thought about it for a minute.

So, I can think of two fair solutions:

Person A is offered $90,000 by the county, double the previous worth of the house, for the inconvenience and wrong done to him as compensation for the mix up. If he accepts this offer, Person B maintains ownership of the house and receives no compensation otherwise as he has not been inconvenienced.

Should the offer of $90,000 not be accepted and Person A desires the return of his house badly enough, Person B will be given the full $174,000 for the house by the county. Both parties get an extra ~$5k for their incovenience. However, a safegaurd should be put on so that Person A doesn't take this route just to sell the house for more money - if Person A wants the house back, he must agree that he will not sell it for at least 2 years time unless he's willing to pay half the house's new value, or $87,000, to Person B if he sells it before that time(this is to show he really does just want his house and not to take advantage of the work done).

I think either deal above is fair.

[David S]

I saw the movie a while back. Good flick. Please bear in mind that it was a government screwup that caused the problem in the first place. In my estimation the young lady who originally owned the house should have gotten a good lawyer and sued the pants off the county. I think a lawyer would be willing to take the case without pay from the owner, and plan on making his fee from the settlement, since it should be a very win-able case.

She should demand replacement value for the house (i.e enough money to buy a similar house or buy back the same house) plus damages for making her temporarily homeless and causing her a great deal of agony, plus attorney fees.

Where's Geoffrey Feiger when you need him?

[Rin-chan]

In my estimation the young lady who originally owned the house should have gotten a good lawyer and sued the pants off the county. I think a lawyer would be willing to take the case without pay from the owner, and plan on making his fee from the settlement, since it should be a very win-able case.

She should demand replacement value for the house (i.e enough money to buy a similar house or buy back the same house) plus damages for making her temporarily homeless and causing her a great deal of agony, plus attorney fees.

Where's Geoffrey Feiger when you need him?

I agree.  You can't take the property away from Person B, but Person A should be fully compensated.

[angus]

person A should get his house back.  (plus relocation expenses, etc.)

person B should be compensated 50 grand plus relocation, inconvenience, and legal expenses.  174 grand would not be an unreasonable compensation for this person.

I think Person A might be a nice guy and let Person B have the house.  In this case Person A might be entitled to 169 grand plus expenses, from the government, and Person B keeps the house.

Based on my reading of the situation Person A ought to be given the first right to refusal or acceptance of the house in any case.

[The Duke]

I say give it to Jennifer Connelly because I'm sure she's prettier than the other person involved.

[Q]

Haven't seen the movie, but in general:

A) The original owner.

B) $45000+5000 to the second owner.  Original owner moves back in and no financial harm done to either.  The second owner should understand the risks of buying foreclosed property and was taking advantage of the situation anyway, so no additional payment is required to him.