Torrens Title System
Matter of Interest
The Hon. J.A. DARLEY ( 15:53 :43 ): I rise today to speak about the Torrens title system. The Torrens title system is a register of landholdings kept and maintained by the government. Having a central register enables the state to guarantee an indivisible title to the landowners and, with some qualification, land boundaries. Land ownership is transferred through registration of title instead of using the former English common law system of deeds. Its main purpose is to simplify land transactions and to certify ownership of the title.
The Torrens title system was the creation of Sir Robert Richard Torrens in South Australia in 1857. The operation of the system is outlined in the Real Property Act, which also created the position of registrar-general, who is responsible for the administration of the act and the Lands Titles Office.
It has become a time-honoured institution created in South Australia and is now world-renowned. It has been adopted by many countries, including New Zealand, much of Europe, Canada, the Dominican Republic, Ireland, Israel, Malaysia, the Philippines, Singapore, Thailand and Vanuatu. Of course, it has been adopted by all Australian states. Several states of the USA have had a limited implementation. Cook County, Illinois, which takes in the greater part of Chicago, had a Torrens system from as early as 1897. The Chicago fire of 1871 destroyed all Cook County real estate records, and to overcome the consequential problems, the Illinois legislature established the first Torrens title act in the United States.
In instances overseas where the government gives no guarantee, the landowner is usually required to have private insurance as a safeguard. Without the government guarantee, the basic principle of the Torrens system is lost. Unfortunately, under pressure from continuous lobbying by the powerful land title insurance companies, the Illinois legislature repealed their act in 1992, bringing back the need for landowners to privately insure their properties. A similar fate was also seen in other states.
Any privatisation of our system may require a need for owners of land to privately insure their interest, which would be an abomination of the Torrens system. Under the Torrens title system, the state guarantees absolute ownership of the estate in the land, and included rights of compensation where land is lost due to fraud, which eliminates the need for private insurance. The act also provides for a duplicate certificate of title to be issued to the landowner or mortgagee of the estate. The need to produce this certificate with a transaction prevents fraud and helps secure the integrity of the register. Any changes to the requirement for a duplicate certificate of title should be thoroughly examined to ensure that there will be no unintended consequences.
The principle of indefeasibility of title provides ultimate security and peace of mind to landowners. It supports all real estate related industries, including financial institutions. It sets confidence and security of knowledge of all registered estates and interests in land. It establishes a foundation for lending institutions to determine the lowest possible interest rates for mortgages and other changes on land. It is indeed a cornerstone of our society.