Torrens title

Torrens title is a system of land registration, in which a register of land holdings maintained by the state guarantees an indefeasible title to those included in the register. Land ownership is transferred through registration of title instead of using deeds. Its main purpose is to simplify land transactions and to certify to the ownership of an absolute title to realty. It has become pervasive around the countries strongly influenced by Britain, especially those in the Commonwealth of Nations. It is named after Sir Robert Richard Torrens, GCMG (1814 – 31 August 1884), who was the third Premier of South Australia.

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 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 (Certificate of Title) 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 cheap online search.
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, land owners needed to prove their ownership of a particular piece of land back to the earliest grant of land by the Crown to its first owner. The documents relating to transactions with the land were collectively known as the "title deeds" or the "chain of title". This event could have occurred hundreds of years prior and could have been intervened by dozens of 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.

A boom in land speculation and a haphazard grant system resulted in the loss of over 75% of the 40,000 land grants issued in the colony (now state) of South Australia in the early 1800s. To resolve the deficiencies of the common law and deeds registration system, Robert Torrens, a member of the colony's House of Assembly, proposed a new title system in 1858, and it was quickly adopted. The Torrens title system was based on a central registry of all the land in the jurisdiction of South Australia, embodied in the Real Property Act 1886 (SA). All transfers of land are recorded in the register. Most importantly, the owner of the land is established by virtue of his name being recorded in the government's register. The Torrens title also records easements and the creation and discharge of mortgages.

The historical origins of the Torrens title are a matter of considerable controversy. Torrens himself acknowledged adapting his proposals from earlier systems of transfer and registration, particularly the system of registration of merchant ships in the United Kingdom. The Prussian mortgage legislation also served as an example.^[7] James E. Hogg, in Australian Torrens System with Statutes (1905), has shown that Torrens derived ideas from many other sources and that he received assistance from a number of persons within South Australia. Stanley Robinson, in Transfer of Land in Victoria (1979) has argued that Ulrich Hübbe, a German lawyer living in South Australia in the 1850s, made the most important single contribution by adapting principles borrowed from the Hanseatic registration system in Hamburg.

Nevertheless, it cannot be denied that Torrens' political activities were substantially responsible for securing acceptance of the new system in South Australia and eventually, in other Australian colonies and New Zealand. He oversaw the introduction of the system in the face of often-vicious attack from his opponents, many of whom were lawyers, who feared loss of work in conveyancing because of the introduction of a simple scheme. The Torrens system was also a marked departure from the common law of real property and its further development has been characterised by the reluctance of common-law judges to accept it.

Land register

The land register is the central aspect of the Torrens system. Originally the register was a bound paper record, but today the register is typically kept in a database.

On the first registration of land under the system, the land is given a unique number (called a folio) 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.

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.^[8] Claims for compensation are very rare.

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. 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 is 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.

The registered proprietor of Torrens land is said to have an indefeasible title. That means that only in very limited circumstances can his or her title be challenged. These challenges are established in the legislation, and are subject to rules made by courts. For example, in Victoria such challenges are established in section 42 of the Transfer of Land Act 1958 (Vic). A court can also adjust rights as between parties before it, and order changes to the register accordingly.

Indefeasibility of title

Indefeasibility of title applies to the registered proprietor or joint proprietors of land.

Different states have different laws and provisions. The following, for example, relates to the jurisdiction of the Australian state of Victoria, where the Torrens system is manifested in the Transfer of Land Act 1958 (Vic). Upon registration of his interest and subsequent recording on Title of his interest, the registered owner's claim to his interest in that land is superior to all other interests in the land other than the circumstances listed in s.42 Transfer of Land Act 1958 (Vic).

This section indicates that the registered interest holder will be free from all encumbrances other than inter alia:

• Those listed on the title;
• Those claiming the land on a prior folio (s42(1)(a)) ^[9]
• where the land is included by wrong description on the part of the Registrar and the proprietor is not or has not derived title from a purchaser ‘for value’(s 42(1)(b);
• paramount interests (s 42(2)(a)-(f)) – these interests, although even possibly unregistered, are 'superior' to interests that are registered.

Additionally, there exist exceptions or circumstances that can penetrate the indefeasibility. Common factors that, when evidenced by a party, may penetrate and defeat the registered holder's claim include:

• Fraud committed by the registered interest holder [principle of immediate indefeasibility]. See the New Zealand case of Efstratiou, Glantschnig, and Petrovic v Glantschnig as an example;
• Judicial action, where it can be shown that there was some contractual promise or undertaking by the registered party vis-à-vis the unregistered party;
• Inconsistent legislation (in which case the most recent legislation prevails);
• Volunteer, where the registering party acquires the interest for no consideration (e.g. bequeathed in a will). Note, contrast with Victorian law, in New South Wales volunteers will become indefeasible.

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.^[10]

Australia

Australian colonies introduced the Torrens system between 1857 and 1875. The Torrens title system was introduced first in South Australia by Sir Robert Richard Torrens, the Registrar-General of Deeds through the Real Property Act 1858.^[11] Later in Victoria under the Real Property Act of 1862,^[12] and in New South Wales on 1 January 1863, with the commencement of that colony's own Real Property Act of 1862.^[13]

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.^[14] Canada, through the federal Parliament in 1886, implemented the Torrens system in the Northwest Territories.^[15] 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.^[16] British Columbia uses a modified Torrens system. Since 1885, Ontario has used an English system,^[17] 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.^[18] New Brunswick is in the process of converting all titles to a Torrens system, with the expense of the changeover charged to the purchaser.^[19] Quebec, being a civil rather than common law jurisdiction, uses the cadastre system.

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

Israel has been using the Torrens Title system since its foundation. The system had been first implemented by the British in Mandatory Palestine.

Malaysia

Malaysia has adopted a version of the Torrens system, enacted in the National Land Code, Act 56 of 1965.^[20]

New Zealand

New Zealand adopted a similar system from 1870.^[21][22] 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.^[23] The Torrens system is now implemented by the Land Transfer Act 1952.^[24]

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.^[25][26]

Singapore

Singapore has adopted a version of the Torrens system, enacted in the Land Titles Act, Chapter 157.^[27]

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.^[28]

United States

States with a limited implementation include Minnesota,^[29] Virginia,^[30] Massachusetts, Colorado, Georgia, Hawaii, New York, North Carolina, Ohio, and Washington.

See also

• Cadastre, the equivalent concept in the French civil law
• Strata title, an enhancement of Torrens Title intended for apartment buildings and house-typed units.

References