Torrens title is a land registration and land transfer system, in which a state creates and maintains a register of land holdings, which serves as the conclusive evidence (termed "indefeasibility") of title of the person recorded on the register as the proprietor (owner), and of all other interests recorded on the register.
Ownership of land is transferred by registration of a transfer of title, instead of by the use of deeds. The Registrar provides a Certificate of Title to the new proprietor, which is merely a copy of the related folio of the register. The main benefit of the system is to enhance certainty of title to land and to simplify dealings involving land.
Its name derives from Sir Robert Richard Torrens (1812–1884), who designed, lobbied for and introduced the private member's bill which was enacted as the Real Property Act 1858 in the province of South Australia, the first version of Torrens title enacted in the world. Torrens based his proposal on many of the ideas of Ulrich Hübbe, a German lawyer living in South Australia. The system has been adopted by many countries and has been adapted to cover other interests, including credit interests (such as mortgages), leaseholds and strata titles.
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 back in time through a series of documents). The State guarantees title, and the system 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]
At common law, the vendor of land needs to show his or her ownership of the land by tracing the chain of ownership back to the earliest grant of land by the Crown to its first owner. The documents relating to transactions with the land are collectively known as the "title deeds" or the "chain of title". This event may have occurred hundreds of years prior and could have had dozens of intervened 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.
The effect of registration under the deeds registration system (also known as "record title") was to give the instrument registered "priority" over all instruments that are either unregistered or not registered until later. The recording of the deed served to give notice to the world of the conveyance of title to the grantee named in the deed. 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.
Sir Robert Richard Torrens, Registrar-General and Treasurer of the colony of South Australia and later a member of the House of Assembly, lobbied for many years for a new title system to improve the currently cumbersome, slow and expensive system of land transfer. He was largely responsible for shepherding the new Bill through Parliament, enacted in 1858 as the Real Property Act 1858. The system laid out in this bill became known as the Torrens title system, and was based on a central registry of all the land in the jurisdiction of South Australia.
Torrens drew ideas from the system of registration of merchant ships in the United Kingdom, experience gained from his years of working as a customs official. He also used many of the ideas incorporated in the Act from Ulrich Hübbe, a German lawyer living in South Australia at that time, who had expert knowledge of the Hanseatic registration system in Hamburg.[7][8]
The central aspect of the Torrens system is the land register, in which all dealings with land are recorded. The register may be a bound paper record, but today most registers are typically kept in a database. Ownership of the land is established by virtue of the owner's name being recorded in the government's register. The Torrens title also records easements and the creation and discharge of mortgages.
On the first registration of land under the system, the land is given a unique number (called a volume-folio number) 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.[citation needed]
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.[9] Claims for compensation are very rare.[10]
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.[11] 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 were 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, which can be a protracted and costly exercise each time there is a dealing in the property.
The registered proprietor of Torrens land is said to have an indefeasible title, which means that his or her title can be challenged only in very limited circumstances (see following).
The register of titles is said to confer “indefeasibility of title” to the person or persons registered on the register as proprietor or joint proprietors of land. Although the concept of indefeasibility is similar to that of conclusive evidence, in practice there are some limitations to indefeasibility, and different jurisdictions have different laws and provisions.
For example, in the Australian state of Victoria, the Torrens system is manifested in the Transfer of Land Act 1958 (Vic). Upon registration of an interest and subsequent recording on title of the interest, the registered owner's claim to that interest is superior to all other claims other than those listed in s.42 of that Act, which provides that the title of the registered interest holder is subject to, inter alia:
Additionally, there are other exceptions or circumstances that can defeat indefeasibility, such as:
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.[13]
The first sale of land registered under the system was to pastoralist William Ransom Mortlock (later elected to the South Australian House of Assembly[14]) on 25 August 1858.[15]
Starting in South Australia with the Real Property Act 1858 (which was later repealed and replaced by the Real Property Act 1886), all Australian colonies introduced the Torrens system between 1858 and 1875. Since then, each colony, and since 1901, state or territory, has maintained its own land titles register of land.
The Torrens system did not replace the common law system but applied only to land grants effected after the introduction of the Torrens system in the jurisdiction and to land that was voluntarily registered under the relevant Act. In Australia most land is now held under the Torrens system, although remnants of the old system of land title still remain, called “General law land”. All land in the Australian Capital Territory is leasehold (effectively Torrens freehold), while much of the Northern Territory is held under Crown lease. Native Title is recognised as a separate form of ownership. Some land remains as Crown Land.[16]
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.[17] Canada, through the federal Parliament in 1886, implemented the Torrens system in the Northwest Territories.[18] 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.[19] British Columbia uses a modified Torrens system. Since 1885, Ontario has used an English system,[20] 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