I always found that an interesting situation. The builder might like to talk about the legal doctrine of "Unjust Enrichment". In other words it may NOT (subject to the common law in that jurisdiction which I haven't studied) be as simple as the lot owner gets a free house period. On the other hand, if the lot owner is innocent, had no knowledge whatsoever, and can come into Court with "clean hands" the Courts sure wouldn't let him loose in the deal. The attorneys may simply negotiate a settlement, the builder could end up paying a "premium" for the lot, or the lot owner could get a "good deal" on the house??? A quick settlement would beat the high cost of litigation. I would have to study the Common Law in the jurisdiction, but that's basically what I recall in our state.
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