Torrens system
Torrens system is a system of land title registration, which was named after its creator, Sir Robert Richard Torrens. The system was introduced first time in Australia in year 1858, but quickly spread further into Canada and other countries. It's said to be very similar, often even called identical, to systems of title registration that operate in many common law countries. Differences are distinguishable, but under thorough examination[1].
Land registration is a system which records titles to land, and it consists of two divisions[2]:
- Title registration system
- Deeds registration system
Overall, title registration system is being viewed as pretty important part of development of the land markets. It provides a lot of transparency and security.
Torrens system's main principles
Torrens system is built around three main principles[3]:
- "The mirror" - The title registration system will reflect the interests affecting the land completely and very accurately.
- "The curtain" - If an interest is not on the register, it won't bind new titleholders. The system is the only and sole source of information, which is available to purchasers.
- "The insurance principle" - The state guarantees the register being correct and accurate, compensating titleholders who suffer any losses due to an error in the register.
Those principles make selling and trading lands much cheaper, easier and faster. Thanks to them, new, fresh titles, free of local land use and custom encumbrances, are being produced.
The idea behind Torrens system
Robert Torrens wished to rectify most common problems of dependent titles under general law. In previous systems, the new grantor received a title, which was built on a chain of predecessors. The process to check and prove the validity of a title was long, sophisticated and uncertain. Torrens implemented a rule, which said that the grantor receives a fresh title in a similar way as an absolute grant from the Crown. This way a complex investigation wouldn't be necessary[4].
One of the main goals of Torrens system was to develop safer method of conveying land interests. Very important and innovative was a rule, which said that once title was registered, it obtained absolute security guarantee. Purchasers didn't have to worry about the title being defective or a subject to the existence of some other, previous interest. A new, fresh title was conferred upon the grantor, fixing its defects, with few exceptions[5].
Examples of Torrens system
- The Torrens system is most commonly used in the land registration systems of Australia, Canada, New Zealand, South Africa and the United States. Each of these countries has their own variations of the system, but they all operate on the same principle of registering and guaranteeing title to land.
- In Australia, the Torrens system is implemented by the state or territory governments. The process of registering land under the Torrens system involves the submission of an application to the relevant authority. The authority then assesses the application and, if approved, issues a certificate of title. This certificate is the legal proof of ownership of the land and is protected by the state or territory government.
- In the US, the Torrens system is used in some states for the registration of deeds and mortgages. The process of registering a deed or mortgage requires the submission of an application to the relevant authority, which then assesses the application and, if approved, issues a certificate of title. This certificate is then recorded in the public records and is protected by the state or county government.
- In Canada, the Torrens system is used in some provinces for the registration of land titles. The process of registering land title under the Torrens system involves the submission of an application to the relevant authority. The authority then assesses the application and, if approved, issues a certificate of title. This certificate is then filed with the provincial land registration office and is protected by the provincial government.
Advantages of Torrens system
One of the main advantages of the Torrens system is that it provides an efficient and reliable method of land title registration. Specifically, the system provides a guarantee of title, allows for the easy transfer of title, and minimizes the risk of fraud or double registration of titles.
- The title guarantee means that the government stands behind the title, and will reimburse any person who suffers loss due to a defect in the title.
- The system allows for easy transfer of title, as it is designed to make the process of transferring title from one person to another as simple as possible. The transferor and transferee must simply complete a form, and the title is transferred automatically.
- The registration process is designed to minimize the risk of fraud or double registration of titles. The title is registered with a central authority, and all transfers are recorded. This makes it difficult for a person to fraudulently transfer a title.
- The Torrens system also makes it easier for lenders to determine whether a title is valid, as the registration process ensures that all title transfers are recorded. This makes it simpler for a lender to determine whether a title is valid and can be used as collateral for a loan.
Limitations of Torrens system
The Torrens system has its limitations, including:
- The system is reliant on accurate records, meaning that errors in a title deed or in the registration process may not be caught. This can lead to problems in the transfer of land titles and disputes between parties.
- The system requires that all parties involved in a transaction are registered as owners or buyers in the system, meaning that transfers of title may be delayed if this requirement is not met.
- The system does not provide for the protection of mortgages or other forms of secured debt, meaning that the lenders must rely on other methods, such as the registration of a mortgage deed, to assert their rights.
- The system does not provide for the enforcement of rights or obligations of the parties, meaning that legal action may be required to resolve disputes between parties.
- The system does not provide for the registration of easements or other rights of access to land, meaning that these rights must be established by other means.
- The Land Titles Act: This is a common law system of registering titles to land. It is different from the Torrens system in that it does not provide the same degree of protection against fraud and other challenges to title.
- The Land Registration Act: This system is similar to the Land Titles Act, but provides greater protection against fraud and other challenges to title.
- The Deeds Registration System: This system is based on the registration of deeds, which are documents that establish legal rights to land. It provides a less comprehensive form of protection against fraud and other challenges to title than the Torrens system.
- The Title Insurance System: This system is based on the purchase of title insurance, which is a form of insurance that covers the cost of defending a title against challenges.
In summary, there are several approaches to land title registration, including the Torrens system, the Land Titles Act, the Land Registration Act, the Deeds Registration System, and the Title Insurance System. Each system provides a different degree of protection against fraud and other challenges to title.
Footnotes
| Torrens system — recommended articles |
| Torrens title — Mercantile law — Company seal — True copy — Mutual agreement — Clear title — Import declaration — Share register — Nominee shareholder |
References
- Brennan G. (2014), The Impact of eConveyancing on Title Registration: A Risk Assessment, Springer
- Grabham E., Beynon-Jones S. (2018), Law and Time, Routledge
- Grigg B., Esmaeili H. (2016), The Boundaries of Australian Property Law, Cambridge University Press
- Hepburn S. (2013), Australian Principles of Property Law, Routledge
Author: Jakub Urban
