Title is a legal term for a bundle of rights in a piece of property in which a party may own either a legal interest or an equitable interest. It may also refer to a formal document that serves as evidence of ownership. Title is distinct from possession, a right that often accompanies ownership but is not necessarily sufficient to prove it.
In law, Conveyancing is the transfer of title of property from one person to another or the granting of an encumbrance such as a mortgage or a lien. A typical conveyancing transaction contains two major things: the exchange of contracts (whereby equitable title passes) and completion (whereby legal title passes). Conveyancing occurs in three stages: before contract, before completion and after completion.
A system of conveyancing is usually designed to ensure that the buyer secures title to the land together with all the rights that run with the land, and is notified of any restrictions in advance of purchase. In most developed jurisdictions, conveyancing is facilitated by a system of land registration which is designed to encourage reliance on public records and assures purchasers of land that they are taking good title.
The concept, idea or philosophy of property underlies all related law. In some jurisdictions, historically all property was owned by the monarch and it devolved through feudal land tenure or other feudal systems of loyalty and fealty. Though the Napoleonic code was among the first government acts of modern times to introduce the notion of absolute ownership into statute, protection of personal property rights have always been present in Islamic law and jurisprudence, and in more feudalist forms in the common law courts of medieval and early modern England.
Possession is the actual holding of a thing, whether or not one has any right to do so. The 'right of possession' is the legitimacy of possession (with or without actual possession), the evidence for which is such that the law will uphold it unless a better claim is proven. The 'right of property' is that right which, if all relevant facts were known (and allowed), would defeat all other claims. Each of these may be in a different person. For example, suppose Aslam steals from Bashir, what Bashir had previously bought in good faith from Kalsoom, which Kalsoom had earlier stolen from Danish, which had been an heirloom of Danish's family for generations, but had originally been stolen centuries earlier (though this fact is now forgotten by all) from Ehsan. Here Aslam has the possession, Bashir has an 'apparent' right of possession (as evidenced by the purchase), Danish has the 'absolute' right of possession (being the best claim that can be proved), and the heirs of Ehsan, if they know it, have the right of property, which they cannot prove. Good title consists in uniting these three things: the possession, the right of possession, and the right of property in the same person(s).
In England and Wales, a system of land registration was first attempted under the Land Registration Act 1862. This system proved ineffective and, following further attempts in 1875 and 1897, the present system was brought into force by the Land Registration Act, 1925. In 1990 there came compulsory registration order. Inheritance and gift became compulsorily registerable in April 1998. Similarly it became compulsory to register land when a mortgage is created on it in 1998.
The Land Registration Act, 2002 left the 1925 system substantially in place. However, it enabled the compulsory introduction of electronic conveyancing using electronic signatures to transfer and register property, which is in practice since 2005. England and Wales Land Registry is connected to the European Land Information Service (EULIS).
A Torrens title is a system of land title where a register of land holdings maintained by the state guarantees an indefeasible title to those included in the register. It was introduced in South Australia in 1858, by then Premier of South Australia Sir Robert Torrens, formulated to combat the problems of uncertainty, complexity and cost associated with old-system title, which depended on proof of an unbroken chain of title back to a good root of title. Torrens system operates on three principles: 1) Mirror principle - the register (Certificate of Title) reflects (mirrors) accurately and completely the current facts about a person's title. This means that, if a person sells an estate, the new title has to be identical to the old one in terms of description of lands, except for the owner's name. 2) Curtain principle - one does not need to go behind the Certificate of Title as it contains all the information about the title. This means that ownership need not be proved by long complicated documents that are kept by the owner, as in the Private Conveyancing system. All of the necessary information regarding ownership is on the Certificate of Title. 3) Insurance principle - provides for compensation of loss if there are errors
In deeds registration system, in order to establish one's title to the land, a person (purchaser) will have to ascertain, for example, that: all the title documents are properly executed; "a chain of title" is established, there are no (hidden) encumbrances on the land that probably will harm the title of the land. In this system, land owners are needed to prove their ownership of a particular piece of land back to the earliest grant of land by the Crown to its first owner. This event could have occurred hundreds of years prior and could have been intervened by dozens of 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. In Pakistan's case the first settlement record has the sanctity of conclusive evidence. In our country, neither title search for checking veracity of the chain of title is legally binding nor is it a popular practice: either by a lawyer/ buyer or the sub-registrar. 'Fard' simply is perceived to be the proof of a bona fide (presumed) owner (seller) if current record of rights also has entries in his/ her name; disputes regarding titles go to civil courts for decisions, putting extra burden on civil justice system. Even an exhaustive 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 interest. Resultantly, transfers of land, in such systems, render slow, expensive, and often unable to create certain title as this may involve lengthy inquiries, examinations and prolonged litigation. In Torrens system, a prospective purchaser is not required to look beyond the record that is contained in the Title register. Ireland and Hong Kong have both systems with the Torrens system gradually superseding the older system.
The Torrens title system ensures "title by registration" (ie the indefensibility of a registered interest) rather than "registration of title." Each parcel of land is given a separate folio (unique number) in the register and is identified by reference to a registered plan.
The folio records dimensions of the land and its boundaries, the names of the registered proprietors, and any legal interests that affect title to the land. The State guarantees title and is usually supported by a compensation scheme for those who lose their title due to the State's operation. Claims for compensation are very rare. 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. New Zealand also adopted a similar system in 1875.
The vast majority of states in the US employs a system of recording instruments that affect the title of real estate as the exclusive means for publicly documenting land titles and interests. This system differs significantly from land registrations systems, such as the Torrens System that have been adopted in a few States. The principal difference is that the recording system does not determine who owns the title or interest involved.
That determination is ultimately made through litigation in the courts. The system simply provides a framework for determining whom the law will protect with relation to those titles and interests when a dispute arises. Even though a Recording Act does not require recording, the market dynamics do create strong incentive for a buyer to record.
Recording provides constructive notice to any subsequent purchasers that a prior conveyance occurred and therefore protects the prior purchaser in the event of a subsequent conveyance. In order to protect themselves from defects in the title, buyers frequently purchase title insurance at this time, either for themselves or for their lender. The Recording Systems are established by State Statute, which usually provides for the office of a recorder in each county.
In Singapore due diligence checks at several agencies can be done on-line through a one-stop portal called 'Intereq'. They include: Inland Revenue Authority of Singapore (for Property Tax); Land Transport Authority, National Environment Agency, Public Utilities Board, Urban Redevelopment Authority (planning regulations), a land register check at the Singapore Land Authority, a bankruptcy check, in order to ascertain if the seller is affected by winding up actions.
The stamp duty is also paid online. Finally, transfer is lodged through Singapore Land Authority's Singapore Titles Automated Registration System portal. The entire process takes about 5 to 8 days, involving 3 major steps. In Thailand, the seller and the buyer, or their representatives, must go to the Land Office where the land is located, and submit an application to register the sale of the land and the buildings thereon.
The Land Officer compares the original title deed with the original copy kept at the Land Office and calculates all the registration fees and expenses. The cheque for the taxes is payable to the Ministry of Finance but collected by the Land Office. As the Seller owns both the land and the buildings upon the land, the transfer of the building occurs in the same process at the same registry as for the transfer of the land. The Seller will need to produce the construction permit and household registration of the building to transfer the building. This exercise takes about 2 days to complete.
In Malaysia, the sale-purchase agreement is sent to the Stamp Office for stamping. The Stamp Office will direct the district valuation department to value the property. Stamp duty is paid to the Stamp Office. Memorandum of Transfer thus gets endorsed and become ready for collection.
The purchaser's lawyer presents the duly stamped Memorandum of Transfer for registration at the Land Office/ Registry. A title search is conducted just prior to presentation to ensure that there are no encumbrances or restraint against dealings which may hinder the registration of the Memorandum of Transfer.
In Japan, the parties (or companies) must obtain a (corporate) registry certificate that must be issued within 3 months before the registration application, from the Legal Affairs Bureau called 'homukyoku', and a certificate of evaluation for fixed asset tax of the real property, from a relevant local tax office, which governs the relevant real estate.
Stamps for stamp duty can be purchased at various places, such as post offices. Stamp is the sole official cost for execution of the sale agreement, if a written agreement is prepared. An oral agreement is also acceptable for transferring the title to the real estate. The Legal Affairs Bureau registers the title under the name of the new owner. As registration is a requirement for perfection vis-à-vis third parties, reviewing the certified copy of the real property registry is generally sufficient for identifying any existing perfected encumbrances over the real property.
The purchaser receives the notice of the real property acquisition tax from the local tax office a few months after the registration. The real property acquisition tax must be paid at the local tax office. The whole exercise involves 15 days, spanning over few months, having 6 main procedures.
In Afghanistan, the applicant obtains the application form and two signed copies of the Circular Form from the Primary Court, to initiate a search of Makhzan's historical records of registered deeds. The Makhzan keeper searches for deeds in archives based on the details provided by the applicant (registry number and photos).
The applicant takes the Circular Form to the Milkit-ha (property office) for certification of location and valuation of property and checking of the ownership. An Imlay (Municipal land office) committee establishes the value of the land after an inspection of the property.
The applicant takes the Circular Form to the Tax Collection Office of the financial department of the local Mustofiat (Provincial Revenue department) for certification of property taxes owed. The Circular Form is submitted to the Human Resources Directorate to certify the signatures of the local and provincial (regional) Mustofiat staff.
The applicant returns to the Primary Court with the completed Circular Form and the receipts as proof of payment. The buyer applies for the title transfer. The judge will order the clerk to prepare a new deed in two copies. The whole process may take few months to over a year to complete, involving 9 major procedures.
Although land registration systems from Afghanistan to the USA are products of unique legal system of each country yet basic constituents of these registration systems remain the same ie clearance/ payment of various taxes before the transaction takes place, identification of the parties, conveyance/ documentation, identification/ surveying of the property, witnesses/ public oversight, general and specific sanctity and its impact on the finality of the transaction, associated dispute resolution mechanism, etc. However, shape of the land registration system in each country and the extent to which it ensures certainty to title to record of rights in landed property largely depend on the history, culture, market needs, demand and supply equilibrium of land, the justice system, the level of socio-economic development and economic philosophy, and last but not least the system of governance.
Furthermore, from a comparative analysis of various Land Registration and information systems in vogue in different countries of the world, some mentioned above some not because of space constraints, it becomes clear that basically all systems were developed for fiscal and legal purposes. Almost all systems gather similar basic information.
It is, in fact, the design of the system and the way it maintains the information that makes the difference: either making it the most transparent and efficient one, ensuring guarantee of title or rendering it the most sluggish one, exhibiting the inefficiency and corruption, wherein generations parish in search of justice. Some systems maintain all the information in the form of a unified single register, having distinct parcel based identifiers, backed by certain guarantee or insurance.
In other systems the same information is scattered in various places, the manual retrieval of which is a costly and cumbersome task, involving many procedures. The inefficiency or otherwise of a system determines the level of corruption in the system and growth of various land, housing and mortgage markets. The more developed systems also offer the opportunity of better urban planning and more resource generation through taxes.
From the above mentioned, it becomes clear that a land titling registration system may bring a number of benefits for our country. It can give greater certainty over title, and simplify conveyancing. The public can be certain that the registered owner is the legal owner.
As the title register provides an up-to-date and authoritative point of reference, ownership and title can be easily ascertained. Litigation will be drastically reduced. It will empower hitherto marginalized segments of society by providing access to productive capital as per value of their assets.
It will make property rights easily tradable, unleashing potential wealth locked in the land as a dead end. In the next article, I will analyse the information our Land Administration system collects and how this information may be deployed to create a 'title register' for the urban areas of the Punjab, in the first place, within the present legal framework, administrative, financial, and human resources?
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