Torrens title

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Torrens title is a land registration and land transfer system, in which a state creates and maintains a register of land holdings, which serves as the conclusive evidence (termed "indefeasibility") of title of the person recorded on the register as the proprietor (owner), and of all other interests recorded on the register.

Contents

Ownership of land is transferred by registration of a transfer of title, instead of by the use of deeds. The Registrar provides a Certificate of Title to the new proprietor, which is merely a copy of the related folio of the register. The main benefit of the system is to enhance certainty of title to land and to simplify dealings involving land.

Its name derives from Sir Robert Richard Torrens (1814–1884), who designed, lobbied for and introduced the private member's bill which was enacted as the Real Property Act 1858 in the Province of South Australia, the first version of Torrens title in the world. Torrens based his proposal on many of the ideas of Ulrich Hübbe, a German lawyer living in South Australia. The system has been adopted by many countries and has been adapted to cover other interests, including credit interests (such as mortgages), leaseholds and strata titles.

Overview

The Torrens title system operates on the principle of "title by registration" (granting the high indefeasibility of a registered ownership) rather than "registration of title". The system does away with the need for proving a chain of title (i.e. tracing title through a series of documents). The State guarantees title, and the system is usually supported by a compensation scheme for those who lose their title due to private fraud or error in the State's operation. [1]

In most jurisdictions, there will be parcels of land which are still unregistered. [2]

The Torrens system works on three principles: [3]

  1. Mirror principle – the register reflects (mirrors) accurately and completely the current facts about title to each registered lot. This means that each dealing affecting a lot (such as a transfer of title, a mortgage or discharge of same, a lease, an easement or a covenant) must be entered on the register and so be viewable by anyone.
  2. Curtain principle – one does not need to go behind the Certificate of Title as it contains all the information about the title. This means that ownership need not be proved by long complicated documents that are kept by the owner, as in the Private Conveyancing system. All of the necessary information regarding ownership is on the Certificate of Title.
  3. Indemnity principle – provides for compensation of loss caused by private fraud or by errors made by the Registrar of Titles.

Background

Common law

At common law, the vendor of land needs to show his or her ownership of the land by tracing the chain of ownership back to the earliest grant of land by the Crown to its first owner. The documents relating to transactions with the land are collectively known as the "title deeds" or the "chain of title". This event may have occurred hundreds of years prior and could have had dozens of intervened changes in the land's ownership. A person's ownership over land could also be challenged, potentially causing great legal expense to land owners and hindering development.

Even an exhaustive title search of the chain of title would not give the purchaser complete security, largely because of the principle, nemo dat quod non habet ("no one gives what he does not have") and the ever-present possibility of undetected outstanding interests. For example, in the UK Court of Chancery case Pilcher v Rawlins (1872), [4] [5] the vendor conveyed the fee-simple estate to P1, but retained the title deeds and fraudulently purported to convey the fee-simple estate to P2. The latter could receive only the title retained by the vendor—in short, nothing. However, the case was ultimately decided in favor of P2, over P1. The courts of equity could not bring themselves to decide against a totally innocent (without notice) purchaser. [6]

The common-law position has been changed in minor respects by legislation designed to minimize the searches that should be undertaken by a prospective purchaser. In some jurisdictions, a limitation has been placed on the period of commencement of title a purchaser may require.

Deeds registration

The effect of registration under the deeds registration system was to give the instrument registered "priority" over all instruments that are either unregistered or not registered until later. The basic difference between the deeds registration and Torrens systems is that the former involves registration of instruments while the latter involves registration of title.

Moreover, though a register of who owned what land was maintained, it was unreliable and could be challenged in the courts at any time. The limits of the deeds-registration system meant that transfers of land were slow, expensive, and often unable to create certain title.

Creation

Under the system many maps showing Australian property boundaries need to be kept. Wynyard county NSW 1897.jpg
Under the system many maps showing Australian property boundaries need to be kept.

Sir Robert Richard Torrens, Registrar-General and Treasurer of the colony of South Australia and later a member of the House of Assembly, lobbied for many years for a new title system to improve the currently cumbersome, slow and expensive system of land transfer. He was largely responsible for shepherding the new Bill through Parliament, enacted in 1858 as the Real Property Act 1858 . The system laid out in this bill became known as the Torrens title system, and was based on a central registry of all the land in the jurisdiction of South Australia.

Torrens drew ideas from the system of registration of merchant ships in the United Kingdom, experience gained from his years of working as a customs official. He also used many of the ideas incorporated in the Act from Ulrich Hübbe, a German lawyer living in South Australia at that time, who had expert knowledge of the Hanseatic registration system in Hamburg. [7] [8]

Land register

The central aspect of the Torrens system is the land register, in which all dealings with land are recorded. The register may be a bound paper record, but today most registers are typically kept in a database. Ownership of the land is established by virtue of the owner's name being recorded in the government's register. The Torrens title also records easements and the creation and discharge of mortgages.

On the first registration of land under the system, the land is given a unique number (called a volume-folio number) which identifies the land by reference to a registered plan. The folio records the dimensions of the land and its boundaries, the name of the registered owner, and any legal interests that affect title to the land. To change the boundaries of a parcel of land, a revised plan must be prepared and registered. Once registered, the land cannot be withdrawn from the system.[ citation needed ]

A transfer of ownership of a parcel of land is effected by a change of the record on the register. The registrar has a duty to ensure that only legally valid changes are made to the register. To this end, the registrar will indicate what documentation he or she will require to be satisfied that there has in fact been a change of ownership. A change of ownership may come about because of a sale of the land, or the death of the registered owner, or as a result of a court order, to name only the most common ways that ownership may change. Similarly, any interest which affects or limits the ownership rights of the registered owner, such as a mortgage, can also be noted on the register. There are legal rules which regulate the rights and powers of each of these interests in relation to each other and in relation to third parties.

The State guarantees the accuracy of the register and undertakes to compensate those whose rights are adversely affected by an administrative error. [9] Claims for compensation are very rare. [10]

Effect of registration

The main difference between a common law title and a Torrens title is that a member of the general community, acting in good faith, can rely on the information on the land register as to the rights and interests of parties recorded there, and act on the basis of that information. A prospective purchaser, for example, is not required to look beyond that record. He or she does not need even to examine the Certificate of Title, the register information being paramount. [11] This contrasts with a common law title, which is based on the principle that a vendor cannot transfer to a purchaser a greater interest than he or she owns. As with a chain, the seller's title is as good as the weakest link of the chain of title. Accordingly, if a vendor's common law title were defective in any way, so would be the purchaser's title. Hence, it is incumbent on the purchaser to ensure that the vendor's title is beyond question. This may involve both inquiries and an examination of the chain of title, which can be a protracted and costly exercise each time there is a dealing in the property.

The registered proprietor of Torrens land is said to have an indefeasible title, which means that his or her title can be challenged only in very limited circumstances (see following).

Indefeasibility of title

The register of titles is said to confer “indefeasibility of title” to the person or persons registered on the register as proprietor or joint proprietors of land. Although the concept of indefeasibility is similar to that of conclusive evidence, in practice there are some limitations to indefeasibility, and different jurisdictions have different laws and provisions.

For example, in the Australian state of Victoria, the Torrens system is manifested in the Transfer of Land Act 1958 (Vic). Upon registration of an interest and subsequent recording on title of the interest, the registered owner's claim to that interest is superior to all other claims other than those listed in s.42 of that Act, which provides that the title of the registered interest holder is subject to, inter alia :

Additionally, there are other exceptions or circumstances that can defeat indefeasibility, such as:

Adoption

The adoption of the Torrens title registry throughout the British Commonwealth, and its legal context, was covered in depth by James Edward Hogg in 1920. [13]

Australia

The first sale of land registered under the system was to pastoralist William Ransom Mortlock (later elected to the South Australian House of Assembly [14] ) on 25 August 1858. [15]

Starting with South Australia, all Australian colonies introduced the Torrens system between 1858 and 1875. Since then, each colony, and since 1901, states and territories, state or territory has maintained their own land titles register of land.

The Torrens system did not replace the common law system but applied only to new land grants and to land that was voluntarily registered under the relevant Act. In Australia most land is held under the Torrens Title system, although remnants of the old system of land title still remain. All land in the Australian Capital Territory is leasehold (effectively Torrens freehold), while and much of the Northern Territory is held under Crown lease. Native Title is recognised as a separate form of ownership. Some land remains as Crown Land (i.e. in Australia, public land). [16]

Canada

The second Torrens jurisdiction in the world was established in 1861 in the then-British colony of Vancouver Island, now part of the Canadian province of British Columbia. [17] Canada, through the federal Parliament in 1886, implemented the Torrens system in the Northwest Territories. [18] It has continued to be used by the three Prairie provinces (Alberta, Saskatchewan and Manitoba) into which the southern part of the Northwest Territories was divided. [19] British Columbia uses a modified Torrens system. Since 1885, Ontario has used an English system, [20] which is not a Torrens system, but it has similar purposes. In Ontario, electronic registration led to this version covering almost all land, but the past deeds registration still governs some issues. For properties still under deeds registration, a 40-year rule governed title, but the government converted them under a streamlined process. [21] New Brunswick and Nova Scotia converted from a Deeds registration system to a Torrens title system in the 2000s, with the expense of the changeover charged to the purchaser. [22] [23] The only provinces in Canada which do not have Torrens titles include Newfoundland and Labrador, Prince Edward Island, and Quebec, which is a civil rather than common law jurisdiction and instead uses the cadastre system.

Fiji

Fiji's Torrens statute is the Land Transfer Act 1971.

Dominican Republic

The Dominican Republic has been using the Torrens Title System since 1920. [24] All of commercial property and most real estate within the main cities are registered and thus guaranteed under the system. An acceleration of registration for land in the rural areas is underway in the 21st century, to promote a more efficient and effective real estate market in the Dominican Republic.

Ireland

Ireland first began to operate a Torrens Title system in 1892. So-called registered land (i.e. land held under a Torrens title) is recorded in the Republic of Ireland using a system of numbered county-level folios. The land registry is operated by the Property Registration Authority, a government agency, and records both freehold and leasehold titles, along with easements/profits-a-prendre, mortgages, and any other charges over land. It is compulsory to create a folio in the land registry if land is sold/transferred/subdivided, multi-storey buildings are erected, or a new lease (over five years) is created. The vast majority of land in Ireland (by acreage) is held under Torrens title as compulsory registration in the land registry upon sale has been a requirement in rural areas for many years. Compulsory registration was extended to the (more urban) counties of Cork, Dublin, Galway, Limerick and Waterford in the last decade, thus extending mandatory Torrens title to every part of the Republic of Ireland.

Israel

A Torrens title system was implemented by the British in Mandatory Palestine, and continued to be used since Israel's foundation in 1948. As of 2016, about 4% of the country's land area is still registered under a pre-Torrens, deeds registration system.

Malaysia

Malaysia has adopted three versions of the Torrens system:

New Zealand

New Zealand adopted a similar system from 1870. [27] [28] The Land Transfer (Compulsory Registration of Titles) Act 1924 brought most of the remaining land in the country under the Torrens system and by 1951 the register was considered complete, although small remnants of land may still exist under the deeds system. [29] The Land Transfer Act 1952 implemented the Torrens system. [30] In the 20th century, academics and judges disagreed about whether to interpret indefeasibility as "deferred" or "immediate". [31] In 1967, the Privy Council in Frazer v Walker decided that a registered owner will obtain an indefeasible title to an interest or estate as soon as they become the registered owner of the interest or estate (the principle of immediate indefeasibility). [32]

The 1952 Act was superseded by the Land Transfer Act 2017. [33] The 2017 Act introduces a judicial discretion to cancel an owner's registration of title in cases of "manifest injustice", which arguably frustrates the certainty of title considered fundamental to the principle of immediate indefeasibility. [34]

In New Zealand most land is held under the Torrens Title system, although remnants of the old system of land title still remain. Māori customary title (native title) is recognised as a separate form of ownership. Some land remains as Crown Land (i.e. in New Zealand, public land). [16]

Philippines

The Torrens system was established in the Philippines on November 6, 1902 by the enactment of Act No. 496, "The Land Registration Act", which was virtually identical to the Real Property Act of Massachusetts of 1898. [35] [36]

Russia

Russia adopted the Torrens system soon after the founding of the Soviet Union. [37] Currently, the accounting and registration system for rights to immovable property in Russia is governed by two federal laws, which have adopted some of the elements and principles of the Torrens system. Accounting for land, buildings and natural sites is recorded in a database of real estate cadastre under federal law of 2007 No. 221-FZ "On State Real Estate Cadastre". [38] Transactions by the account holder of these facilities is recorded in another database: “the Unified State Register of rights to immovable property and transactions with them” on the basis of federal law of 1997 No. 122-FZ "On State Registration of Rights to Real Estate and Transactions Therewith". [39] Both laws established openness cadastre and registry information, and assigned to a single organization responsible for their management - Rosreestr . Entry in the Unified State Register of real property rights is a necessary and sufficient condition for the emergence of property rights to real estate. For information about the property, contained in the cadastre and registry, sufficiently detailed and structured cover most essential information about an object runs open cadastral map. [40] With a fairly simple web forms can be found and read a part of the information on any object property. [41] These laws are not, however, establish an immediate full liability of the state for the correctness of the information contained in databases. In 2015, the State Duma has been registered a bill that covers public access to information about the owners of the property. [42] The bill was supported by the Government. [43] According to some experts, the restriction of information openness reduces the chances of identifying the public cases of illegal enrichment and increases business risks. [44]

Saudi Arabia

Saudi Arabia introduced a Torrens system in 2002 with The Realty in Kind Registration Law, issued by Royal Decree No. 6 on 9/21423H [45]

Singapore

Singapore adopted a version of the Torrens system beginning in 1960 with the Land Titles Act, Chapter 157. [46] Conversion of all titles was completed in 2001. [47]

Thailand

Thailand adopted the Torrens system in 1901 after King Chulalongkorn established The Royal Thai Survey Department, a Special Services Group of the Royal Thai Armed Forces, engaged in Cadastral survey, which is the survey of specific land parcels to define ownership for land registration, and for equitable taxation. [48]

United States

States with a limited implementation include Minnesota, [49] Virginia, [50] Massachusetts, [51] Colorado, [52] Georgia, Hawaii, New York, North Carolina, [53] Ohio, [52] and Washington. [54]

The state of Illinois was the first state to adopt a Torrens Title Act, which used a limited Torrens system in Cook County after the Great Chicago Fire, [55] however this system was allowed to expire on January 1, 1992, after it was found to be unpopular with lenders and other institutions. [56]

See also

Related Research Articles

In law, conveyancing is the transfer of legal title of real property from one person to another, or the granting of an encumbrance such as a mortgage or a lien. A typical conveyancing transaction has two major phases: the exchange of contracts and completion.

In common law and statutory law, a life estate is the ownership of land for the duration of a person's life. In legal terms, it is an estate in real property that ends at death when ownership of the property may revert to the original owner, or it may pass to another person. The owner of a life estate is called a "life tenant".

A deed is any legal instrument in writing which passes, affirms or confirms an interest, right, or property and that is signed, attested, delivered, and in some jurisdictions, sealed. It is commonly associated with transferring (conveyancing) title to property. The deed has a greater presumption of validity and is less rebuttable than an instrument signed by the party to the deed. A deed can be unilateral or bilateral. Deeds include conveyances, commissions, licenses, patents, diplomas, and conditionally powers of attorney if executed as deeds. The deed is the modern descendant of the medieval charter, and delivery is thought to symbolically replace the ancient ceremony of livery of seisin.

Recorder of deeds

Recorder of deeds or Deeds registry is a government office tasked with maintaining public records and documents, especially records relating to real estate ownership that provide persons other than the owner of a property with real rights over that property.

A cadastre is a comprehensive land recording of the real estate or real property's metes-and-bounds of a country.

HM Land Registry United Kingdom government non-ministerial department

Her Majesty's Land Registry is a non-ministerial department of the Government of the United Kingdom, created in 1862 to register the ownership of land and property in England and Wales. It reports to the Department for Business, Energy and Industrial Strategy.

Deeds registration land management system which records all documents related to common-law ownership and transfer of real property in a government-maintained deeds register

Deeds registration is a land management system whereby all important instruments which relate to the common law title to parcels of land are registered on a government-maintained register. Deeds registration systems were set up to facilitate the transfer of title. The system had been used in some common law jurisdictions and continues to be used in some jurisdictions, including most of the United States. It is being replaced by Torrens systems in many jurisdictions. Australia, Ireland as well as most Canadian provinces have converted from deeds registries to Torrens titles. Some Canadian provinces have never operated a deeds registry and have always used Torrens titles. Other Canadian provinces which have converted from a deeds registry to Torrens titles have operated both systems in conjunction until the Torrens system gradually superseded the deeds registry system, as was the case in Nova Scotia and New Brunswick during the 2000s. In the Canadian province of Ontario, electronic registration led to Ontario's version of Torrens title covering almost all land, but the past deeds registration still governs some issues. Hong Kong and the Canadian provinces of Quebec, Newfoundland and Labrador and Prince Edward Island are the only provinces left which still operate a deeds registration system.

In United States law, the term color of law denotes the "mere semblance of legal right", the "pretense or appearance of" right; hence, an action done under color of law adjusts (colors) the law to the circumstance, yet said apparently legal action contravenes the law. Under color of authority is a legal phrase used in the US indicating that a person is claiming or implying the acts he or she is committing are related to and legitimized by his or her role as an agent of governmental power, especially if the acts are unlawful.

Land Registration Act 2002 United Kingdom legislation

The Land Registration Act 2002 is an Act of the Parliament of the United Kingdom which repealed and replaced previous legislation governing land registration, in particular the Land Registration Act 1925, which governed an earlier, though similar, system. The Act, together with the Land Registration Rules, regulates the role and practice of HM Land Registry.

Land registration generally describes systems by which matters concerning ownership, possession, or other rights in land can be recorded to provide evidence of title, facilitate transactions and, prevent unlawful disposal. The information recorded and the protection provided will vary by jurisdiction.

Australian property law, or property law in Australia, is the system of laws regulating and prioritising the Property law rights, interests and responsibilities of individuals in relation to "things". These things are a form of "property" or "right" to possession or ownership of an object. The law orders or prioritises rights and classifies property as either real and tangible, such as land, or intangible, such as the right of an author to their literary works or personal but tangible, such as a book or a pencil. The scope of what constitutes a thing capable of being classified as property and when an individual or body corporate gains priority of interest over a thing has in legal scholarship been heavily debated on a philosophical level.

Australian property legislation refers to the different schemes of regulating property rights between each jurisdiction of the states and territories in Australia; combining legislation and receptive of common law. Despite differing statutes, the substantive effect in each jurisdiction is quite similar. The reason there is no unified national system for regulating property is the reservation of this power to the states in the constitution. There have been discussions about a co-operative system of regulation to be implemented between the states, conferring jurisdiction on the federal commonwealth in a similar manner done in the Corporations Act 2001.

Land Registration Authority (Philippines) agency of the Philippine government under he Department of Justice

The Philippines' Land Registration Authority, abbreviated as LRA, is an agency of the Philippine government attached to the Department of Justice responsible for issuing decrees of registration and certificates of title and register documents, patents and other land transaction for the benefit of landowners, agrarian reform-beneficiaries and the registering public in general; providing a secure, stable and trustworthy record of land ownership and recorded interests therein so as to promote social and economic well-being and contribute to the national development.

The vast majority of states in the United States employ a system of recording legal instruments that affect the title of real estate as the exclusive means for publicly documenting land titles and interests. This system differs significantly from land registration systems, such as the Torrens system that have been adopted in a few states. The principal difference is that the recording system does not determine who owns the title or interest involved, which is ultimately determined through litigation in the courts. The system provides a framework for determining who the law will protect in relation to those titles and interests when a dispute arises.

Unregistered land in English law

Unregistered land in English law is land that has not been registered with HM Land Registry. Under the residual principles of English land law, for unregistered land proof of title is based upon historical title deeds and a registry for certain charges under the Land Charges Act 1972.

Easements in English law are certain rights in English land law that a person has over another's land. Rights recognised as easements range from very widespread forms of rights of way, most rights to use service conduits such as telecommunications cables, power supply lines, supply pipes and drains, rights to use communal gardens and rights of light to more strained and novel forms. All types are subject to general rules and constraints. As one of the formalities in English law express, express legal easements must be created by deed.

Registered land in English law

Registered land in English law accounts for around 88 per cent of the total land mass. Since 1925, English land law has required that proprietary interests in land be registered, except in cases where it is necessary to protect social or family interests that cannot reasonably be expected to be registered. English law also runs a parallel system for around 12 per cent of land that remains unregistered.

Real property Legal term; property consisting of land and the buildings on it

In English common law, real property, real estate, realty, or immovable property is land which is the property of some person and all structures integrated with or affixed to the land, including crops, buildings, machinery, wells, dams, ponds, mines, canals, and roads, among other things. The term is historic, arising from the now-discontinued form of action, which distinguished between real property disputes and personal property disputes. Personal property was, and continues to be, all property that is not real property.

<i>Real Property Act 1858</i>

The Real Property Act 1858, 21 Vict. c. 15, is the short title of an Act of the Parliament of South Australia, with the long title "An Act to simplify the Laws relating to the transfer and encumbrance of freehold and other interests in Land". After being introduced as a private member's bill by Sir Robert Richard Torrens, it was passed by both houses and assented to by the Governor of South Australia, on 27 January 1858.

Land Registration (Scots law)

This article relates to the actual process of land registration, for a discussion on the Scottish Government agency maintaining the public registers, see Registers of Scotland

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Further reading