International

The Torrens system

Conveyancing methods and the Torrens system
In the recent past many donor agencies have introduced the Torrens system of registration or the system known as Title registration to stabilize land rights in developing countries. The success of the method of registration depends on many tools. The critical tool necessary to operate the system after its rigid introduction is the conveyancing process, as the conveyancing process controls the validity of the functional documents and the credibility of the documents submitted for registration. The word "Conveyancing" signifies some idea of motion or transmission and unlike movable items, the movement of land from a seller to a buyer can take place only with the intervention of third parties, they are the conveyancing professionals who are licensed to perform the task. Therefore it follows that the success of the registration system introduced will depend on the professionalism and the ethical standards of the said conveyancing professionals.

Having practiced conveyancing for 30 years and traveled widely to over 10 countries to research methods of conveyancing I find that the process to secure land rights is half done when this important basic requirement is overlooked. I have come across an abundance of ideas and a rich variety of conveyancing methods in South East Asia which are hitherto unknown due to the absence of interaction between countries. The absence of literature, absence of jurisprudence and the absence of interaction with other nations makes matters worse for the Asian nations. It is a task to abruptly initiate a new order when one has opposition from the legal fraternity who will not believe in anything new until they have the actual experience of it. They will accept new methods only when they are not afraid that they will lose their practices.

I am personally involved in managing the changes required in my country Sri Lanka, being a member of the committee appointed by the Ministry of Justice of Sri Lanka to implement the Torrens Law introduced to the country. This is a major issue and my observation is that a theoretical academic approach to change merely the method of registration is questionable. Institutions do not exist in a void, they are strongly linked to each other. The formalization of the process to operate the Torrens system requires a Conveyancing process that is appropriate and which will protect the system. In addition, changes to the working of Government, Judiciary, notaries, registration officials, brokers agents, insurers, private sector and surveyors is also necessary

Therefore the admiration of the Torrens system practiced in developed countries without considering the support system could be compared to the admiration of a duck that glides gracefully in water without noticing the heavy paddling underneath.

The conveyancing processes in Australia, the United Kingdom and other countries developed over a period of 150 years. They gradually created the required institutional environment and the professionalism to maintain the Rule of Law. Thus countries such as the United Kingdom and Australia have highly disciplined and skilled professionals and professional organizations such as the Solicitor's Regulatory Authorities and the Land Registry Regulatory Authorities that monitor to support the Torrens system, with additional safety measures such as compulsory insurance cover to compensate owners for professional negligence. Not forgetting the Law Commissions of these countries that employ highly skilled academic staff [ Professors of Law] to contribute to the high performance of the registration process. The solicitors are responsible for contributing to the cost incurred by the said professional authorities and as a consequence a high annual cost is required to obtain the annual practicing license and only solicitors with experience, function under the strict regulations.

The following are a few effective methods adopted by the said nations to maintain the Torrens system and also to offer protection against land fraud:

  1. A conveyancing process with high ethical principles,
  2. An excellent land registration service with ample human and financial resources.
  3. Guarantee fund and resources

1. Conveyancing process
The Torrens system imposes a great responsibility on a conveyancer to identify the owner. The primary responsibility is to positively identify the owner as the person who is going be registered. The rules of identification need to change with each fraudulent act committed as fraudsters are clever at finding ways to defeat all precautionary measures. This process is monitored by the Regulatory Authorities aforementioned in developed countries. The practice is therefore for solicitors to operate with 2 solicitors, one each for the seller and buyer. One is responsible [ seller's lawyer] to provide a disclosure document to identify the owner. The other who would be the buyer's lawyer will rely on the disclosure document to prepares the sale document, on the assurance of identification given by the sellers lawyer.

The seller's solicitor prepares the Contract of Sale in duplicate,
The Contract of Sale is made up of:
- Contract pages (standard conditions prepared by the Law Society),
- Special Conditions, prepared by the Vendor's solicitor specific to each transaction,
- Disclosure documents comprising the title search, title diagram, dealings on the property such as easements and covenants, sewer diagram and any other affectation, if any. Transactions are completed only after an agreements to sell is executed and delivered to the buyer's solicitor. These documents are archived and are available at any time for inspection. [forwarded by Ms Maya Nanayakkara Solicitor of Nan Solicitors Co Ltd Sydney]

In contrast the conveyancing lawyers under the Deeds registration system operate within an informal conveyancing process as the Common Law provides ample legal remedies for land owners. After the introduction of the Torrens system the informality continues and a single conveyancer represents both the seller and the buyer and the transactions are completed without the required documents as aforesaid. Indemnity insurance is also not a part of the process as in countries which practice the Title registration. system. In other words Conveyancing lawyers do not offer any protection for the land owners nor do they offer consumer protection.

2. The necessary institutional reform in land registries to protect the land owners
Good governance in the sense that donors define, is not found in land registries as the registries operate basically unchanged to meet the demand of the Torrens system. The registrars in our countries do not take the responsibility to protect land owners, they register all documents submitted as that was the practice under the Deed system..

In contrast land registries provide genuine protection for the land owners in developed nations such as Australia and United Kingdom which operate the Torrens system. In the UK and Australia the land registrars take the maximum precautions to register only valid documents to eliminate fraud. The rules of identification of registered owners are enhanced and deeds submitted may be rejected if the identity of parties is in doubt. The United Kingdom has introduced a subject known as Land Registry Law which gives a comprehensive insight into the administration procedures of land registries for the benefit of those who work in the registries, land owners and conveyancers.

As you see it is a dynamic process that keeps the Torrens system from providing secure land rights as opposed to the common law rights available under the Deeds registration system.

3. Guarantee fund, absence of resources and absence of legal remedies for land owners
One might argue that the Torrens system provides and operates a government fund which provides compensation for loss of land rights. Hardly anyone would be satisfied with this remedy which permits a fraudster to win over your land by registration. Further more land fraud is extremely pervasive and the amounts to be refunded as compensation would be unaffordable even for the developed nations.

In countries like Malaysia a Torrens system was created without even creating a fund and the result of the recent court decision on land fraud was reported as follows- [Conveyancing Practice Land Scams. Roger Tan, the Malaysian Bar Council's Conveyancing Practice Committee chairman, agreed [ "The Adorna Properties decision has wreaked havoc on every landowner in this country. It not only puts a landowner at risk of losing his property to fraudsters and forgers, but also when the landowner loses his land to these crooks, he loses everything without any compensation or remedy." ]

The facts mentioned in the article have never received any attention from those who advocate the introduction of the Torrens system to the Asian nations. Sri Lanka in 1970 prevented the introduction of The Torrens system. The authorities preferred to retain the Deeds registration system and to make improvements to the existing registries. The sporadic introduction of new systems is open to corruption, and good governance in the sense of what donors want cannot be established without changes to the institutional frame work and the conveyancing process. This is an urgent need today as land fraud is extremely pervasive in all Asian countries and land owners cannot cope with the Torrens law which legislates to remove the fundamental right or judicial remedy available to them to regain their land from fraudsters.

Kirthimala Gunasekera Attorney at Law, Member of the committee for the implementation of the Torrens system in Sri Lanka appointed by the Ministry of Justice. Member Terra Institute USA.

 

Reader Comments:

Brian 14/05/2014:

In America, some are fighting the Torrens system because it necessitates leaving true title in the hands of the state. It is difficult to obtain true private ownership of land here. I hope you leave private ownership (absolute title) as an option for the people of Sri Lanka.

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