Land Registration Systems: A Global Perspective

Land is a crucial resource for any economic activity in the world. Land administration, therefore, is an important component of a country’s economic policy. The method of recording transactions in the land and immovable property (real property) is called the land registration system which is an important part of land administration.

This article deals with the following questions relating to land registration systems.

1. What kind of land registration systems exist across the globe?

2. What is a deed registration system?

3. What is a title registration system?

4. What are the differences between these systems?

5. What is the prevalence of these two systems across the world?

6. Which of the two is a better system of land registration?

What kind of land registration systems exist across the globe?

In modern times almost every country has a system of recording the rights of people over property in some kind of public record. There are wide variations in the features of systems used by various countries for this purpose due to each country's different socio-economic conditions and administrative history. Generally, these systems are classified into two broad categories: Deed Registration and Title Registration.

What is a deed registration system?

A deed registration system provides for the registration of a written conveyance deed for transactions in land with some designated authority. The record of registration is evidence of the transaction between the parties and can be referred to in case of any dispute later on. designated authority,(generally called a registrar), at the time of registration, only examines certain formal requirements like identification of parties, signatures of the parties and witnesses, the correctness of formats of a deed, etc. If found in order, he keeps a copy of the deed in his records arranged chronologically with the time and date of presentation. The original deed is returned to the parties endorsing thereon the reference of registration.

Effect of Registration of a Deed

The transaction is complete as soon as a deed is executed between the parties and registration is only to maintain records for future reference. In case of a dispute in the future, a registered deed gets priority over an unregistered one. In some countries like the United States of America and France, non-registration of a deed does not affect the legality of the transaction but in case of a dispute, an unregistered transaction gets low priority in comparison with a registered deed. In some countries, including India, an unregistered deed has no evidentiary value, making it mandatory for the parties to register a deed.

If a piece of land has been sold twice and only one transaction has been registered, the person claiming rights on the land through a registered deed will win in case of any dispute between the two claimants.

Registration of a Deed is not Conclusive Proof of Title

The most important feature of the deed registration system is that registration is only evidence of a transaction. If a seller does not have the right to sell, the purchaser will not acquire the title over the property despite the conveyance deed being duly registered. Any defect in the title of the seller gets automatically transferred to the title of the purchaser. The registrar does not examine the legal validity of the title of the seller or his competence to make a transaction. The parties are themselves responsible for the validity of the transaction. The registrar acts only as the custodian of the record of registration.

Investigation of Title

Before purchasing a property, a person normally searches records of the registry to know the details of previous transactions in respect of that property to satisfy himself that the seller has undisputed title over the property. After the search, if an unbroken chain of legally valid transactions from the ‘root of the title’ to the present owner is found, and the intending purchaser is satisfied with the title of the seller, he may go ahead with the transaction.

In a basic deed registration system, there is no uniform system of description of property under transfer. As per the parties’ convenience, various markers may be used to identify the property like street name, geographical features, nearby permanent structures, adjacent properties, etc. Moreover, many properties of different kinds and at different locations can be transacted through a single conveyance deed. Due to this reason searching the history of the title of a property is generally very cumbersome in a deed registration system.

What is Title Registration System?

The other system is ‘Registration of Title’ which was introduced by Sir Robert Richard Torrens in South Australia in 1858. It is also called the Torrens system after its inventor. Though the title registration systems of various countries are substantially different from each other, there are certain common characteristics which distinguish the title registration system from the deed registration system. When an application for change of ownership or any other right in the property like lease, mortgage, etc., is submitted to a registrar he, unlike his counterpart in a deed registration system, plays an active role in the examination of the legal validity of the transaction. He registers the transaction in a public register only if he is satisfied that the transferor has a right to make that transaction and there is no legal hindrance in passing the title to the transferee.

Mirror, Curtain and Insurance Principles

Theodore B. F. Ruoff in his famous article ‘ An Englishman Looks at the Torrens System’[1] has laid down ‘mirror’, ‘curtain’ and ‘insurance’ principles as defining features of a title registration system. The ‘mirror’ principle means that the register accurately reflects all the material facts relating to the title; the ‘curtain’ principle implies that for ascertaining the title, no investigation beyond the register is necessary and the ‘insurance’ principle refers to guarantee by the state to compensate a bona fide claimant suffering a loss due to an incorrect entry in the register. These principles describe the ideal state that a title registration system of a country would try to achieve but in reality, no country has ever achieved it. There is often a large gap between the ideal state as laid down by these principles and the actual situation on the ground. The degree to which the ideal state defined by these principles can be achieved depends on the actual provisions in the title registration law of a country.

Registration Conclusive Proof of Title

Once an entry in the name of the transferee is made in the register, it is considered conclusive proof of his title over the property. Also, the transfer of title is complete only after an entry to this effect is made in the title register. An agreement between the parties to transfer the title is a precondition for registration but it has no value unless the transaction is registered. This legal position is in contrast to that in the deed registration system where the title is generally transferred at the time of execution of the conveyance deed.

Though the provisions of the law in different countries vary, generally an entry in the register is considered sacrosanct even if it has been made due to some mistake on the part of the registrar or the parties to the transaction. A genuine right holder, who loses his rights in the property due to an incorrect entry in the register may claim monetary compensation for his loss but cannot get his property back. In countries like Australia, New Zealand and the United Kingdom, a fund has been created by the government to provide compensation in such cases. However, some countries like Germany, Austria, Israel, Malaysia, Sudan and Fiji do not have a government-sponsored fund for this purpose but an aggrieved person can claim compensation either from the government or from the defaulting party as per the general law of the land.

What is the difference between Title Registration and Deed Registration systems?

The main differences between these two systems relate to the manner of keeping records and the legal validity of an entry in the records. However, deed registration and title registration systems are not mutually exclusive systems. Features in the property registration systems of various countries are so diverse that it is difficult to put them into watertight compartments of deed registration and title registration. Deed registration systems of many countries have certain characteristics of the title registration system also.

Deed registration in Scotland (before Scotland switched to title registration in 1975) and South Africa have long been recognised as having almost all the characteristics of the title registration system. The deed registration system of the Netherlands is often labelled as a semi-title registration system. The title registration system of Germany does not have a provision for a state guarantee which is laid down as an essential principle of title registration by Ruoff. Deed registration in the USA, in conjunction with title insurance by private companies, provides similar indemnity to the purchaser as available in the title registration systems of England and Australia. In India, after the registration of deeds, entries of transactions are made in the record of rights. In the record of rights, the rights of people are recorded against uniquely identified properties which is a feature of the title registration system.

The Ontario Law Reform Commission has observed that ‘each is not a single system, but rather is composed of different alternatives, and the combined alternatives form a continuum. The major variable in this continuum is the extent of the affirmation made by the province of the existence and ownership of interests.’[2] To describe this situation, James Edward Hogg aptly states that ‘the two classes shade off into each other and it is a matter of some difficulty to distinguish with complete accuracy between registration of title and registration of deeds.’ [3]

What is the prevalence of the two systems across the world?

James Edward Hogg, who made a comprehensive study of land registration systems in the British Empire as early as 1918, observed that:

‘In the British Empire and in the United States, taken together and separately, the territories, in which registration of deeds (as an adjunct to the conveyance of deed) is the only system, are far more numerous than those which have introduced a system of registration of title. Even in the latter a system of deed registration also prevails side by side with the registration of title, except in the case of a small minority. ....... Thus roughly one-third of the Anglo-American world favours registration of title, and two-thirds favour conveyance by deed registration.’[4]

The situation has not changed substantially since Hogg made this observation. There are only a few examples of countries switching from a well-established deed registration system to title registration in the 20th or 21st century. The USA has rather seen a reverse trend in this regard. While 19 states of the USA introduced title registration between 1895 and 1917, only eight are presently using this system. Among these states also, only Minnesota, Massachusetts and Hawaii use this system in all the counties alongside deed registration. In the other five, viz., Colorado, Georgia, North Carolina, Ohio and Washington, it exists only in a few counties each.

In Canada, some provinces have deed registration systems while others use title registration. In Europe, title registration and deed registration are used in almost equal measure. To mention a few countries, Austria, Denmark, the United Kingdom, Finland, Germany, Poland, Portugal, Spain, Sweden and Switzerland have the title registration system, while Belgium, France, Greece, Italy, Luxembourg and the Netherlands use the deed registration system.

The title registration system was adopted in Brazil in 1890 but is not used much today. Title registration has failed in other parts of Latin America also. Now, most Latin American countries follow the deed registration system. In Asia, while Japan and India have deed registration, Malaysia, Indonesia, the Philippines, and China have adopted the title registration system. Hong Kong enacted the Land Title Ordinance in 2004 but implementation has been kept in abeyance due to objections to many provisions by the Bills Committee of the Legislative Council.

Among the top ten economies of the world, the USA, Japan, Italy, France, India and Brazil have deed registration systems; Germany and the United Kingdom have title registration; Canada follows both systems and China is in the process of implementing a title registration system. Thus, both systems have a widespread following in the world.

Which of the two is a better system of land registration?

As has been cited above, both systems are widely followed in the world. There are examples of very successful land markets under both systems. It will not be proper to rate any one system better than the other. Every country has its own legal history, administrative capacity and principles of jurisprudence. The suitability of a particular law for a country depends on all these factors.

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[1] Ruoff, Theodore B. F. “An Englishman Looks at the Torrens System.” Australian Law Journal, 1952 [2] Law Reforms Commission Ontario . Report on Land Registration. Department of Justice, Ontario, Canada, 1971. [3] Hogg, James Edward. “Registration of Title to Land.” The Yale Law Journal (The Yale Law Journal Company) 28, no. 1 (1918): 51-58. [4] Hogg, James Edward. Registration of Title to Land Throughout the Empire. Sweet & Maxwell Limited, London, 1920.