Torrens System

Discuss about the Torrens who made the Property Ownership in the Nation.

In Australia, there is a comprehensive and robust system of property registration. The system dictates the property ownership extent in the manner the individual obtains the title to land through registration, instead of having to register the ownership as an extra step[1]. The ownership of real estate in the Australia is held through a system which is known as the Torrens title system and it is deemed as the most secure system in the world, along with being a reliable instrument of owning the real estate[2]. A Torrens title provides the sole certificate of title for the land allotment and is a common type of title in the state of South Australia. Through this Torrens title certificate, the details of the property being owned, the easements which includes water pipes, the encumbrances including mortgages, and the unique reference details of the title including folio and volume numbers[3].  

The Torrens title system is based on the working of three principles. The land titles are registered and the records of these are kept accurately in the Government Register, in each and every aspect regarding the interests and the current ownership in the matter of land of an individual. This land titles Register has the information regarding the land of the people; which means that the other interests and ownership are not required to be proven through the long complicated documents, for instance the title deeds[4].  

Apart from the Torrens title, the property law in the nation is also regulated through the Strata title. This title allows the individual ownership of partial property along with the shared ownership in remainder through the legal entity which is known as the owners’ corporation and can even include a body corporate, community association or strata company, and this depends upon the territory or state of the residence, along with the type of scheme[5].

In the following parts, a discussion has been carried on the property ownership in Australia, where a specific emphasis has been laid on the Torrens system and the manner in which the property ownership has changed in the nation.

The title of land is provided through the Torrens system in the nation. The Torrens title was an invention of the South Australia which was a revolution method of not only recording but also registering thee land ownership. This system is such where the land ownership takes place when the document transferring the property ownership is filed with the Land Titles Office of the locality. The key objective of Torrens system is providing the certainty to the land title. In 1958, the Torrens Title System was initially introduced in South Australia and it was later on used in the other states of the nation, and even across the globe[6]. The name of this title has been given after the inventor of this title, which is Sir Robert Richard Torrens. He was instrumental in this efficient and unique system of dealing with land’s implementation. The system which resulted from the desire of Sir Torrens to improve upon the traditional English based land law system, which was not only complex but was expensive and time consuming as well[7]. 

Advantages of the Torrents Title System

The key goal drawn under the Torrens Title System was to make the register conclusive. Once The name of an individual is registered on the register of the Torrens Title and then the individual becomes the property owner to the exclusion of any other individual. Hence, the “title by registration” has to be obtained by the individual and this remains a pivotal concept under the Torrens Title. The Torrens Title System has a Certificate of Title which exists for each and every separate piece of land[8]. This title helps in eliminating the grounds for the majority of dispute litigations, reduces the cost of land transfer and sale in a great manner and also avoids the consequences of the lost certificates. Generally, the individual who is been recorded as the parcel of land’s owner cannot have their title overturned or even challenged. This is due to the concept of indefeasibility of the title.  However, there are certain exceptions to this general rule in case the land had been fraudulently registered[9].

Historically, this system was born out of the chaotic series of land speculations in which the State had suffered financially from the traditional system of land titles’ deficiencies under the common law. In the now old system related to the land titles, an individual was required to trace back the ownership of the land, in all the way back to the original grant given by the state. This theoretical requirement was not only frustrating as the documents were often inconsistent and were missing, but also carried a risk where a better claim of land, on the basis of documents, which the owner had no knowledge about, could be made[10].

There are a range of advantages under the Torrents Title System[11]. This system is authentic as this system allows the individual to make certain that the title is accurate and also avoids the need for proving the title to land. Secondly, there is also reliability in this system where the individual can claim compensation in case the registrar proves to be incorrect. Lastly, there is an efficiency in this system is maintained through a computer based database which can be searched in an easily and quick manner. Through this system, the guarantee is provided through the government that the people who suffer the loss of land, or have a registered interest are compensated for[12].

The key feature of this system is registration of ownership. The land ownership in the nation is transferred through a lodgment of a form with an appropriate fee at the office of the land titles. The agent of the lawyer is usually carries on this activity and often appears on the register on that very day. Before the transfer takes place, the banks or financial institutions ensure that the mortgage is paid out as the majority of people have some or other kind of mortgage on their home. Due to the fast pace of the present day Australian markets, it is very common for the contracts for sale of land to be based on condition of another property being settled. So the old house can be sold by the purchaser and the new one can be purchased on the very same day. The standardization and the predictability of the Torrens title system has allowed the process to be more straightforward even though there is a major difference between the Territories and the States[13].

Key Features of the Torrents Title System

There is a need to notice that there are certain complexities in this system as this system has been around for over 150 years in the nation and even till date, there are certain areas of Australia, which are not covered by the Torrens title registration. There are still a range of lots which remain under the old system of title, which had been granted before the enforcement of the Torrens Title, and these have, till date, not been converted into the new system. As a purchaser, the odds of encountering such situations are quite slim; though they can still take place when the parcel of the land has been held closely by the family over a long period of time. In such cases, it is crucial that the property lawyer assistance is obtained, who has an experience in the old system[14].

In Australia, upon the first time application of this system, the land was alienated from the Crown and the same was recorded. Along with this, the other titles could be voluntarily registered. Upon the completion of transfer the applicant could bring the deed to the land registry, and this was to be brought along with the applicable survey plans and a statement for the evidence of title from an examiner of titles. Upon these being approved, the title had to be recorded and there was no requirement of further legal work for establishing a root of title. A record of title was also established through the registry and a copy of this record was made available to the owner[15].

The principle on which this system is based is that the parcel of land’s title cannot be passed and there can be no encumbrances which could be enforced till the time the same has been noted down on the land register. Once this is done, the registered title is deed to be indefeasible and absolute, as they are effectively insured and guaranteed. Further, the registered owner, as a rule, maintains the title even in cases of fraud or error[16]. Along with this, the mortgages are recorded against the title, which results in the alleviation of questions related to title being transferred to the mortgagee and then the same has to be reconvened upon the repayment of the loan[17].

The Torrens system, along with the similar systems, provide the recording of evidence with regards to the title of the land, along with of all such encumbrances which restrict the title for acting as a kind of third party notice, who may have an interest in land. Under this system, the registration affects the transfer of title, which relates to the old certificate cancellation and the new certificate is to be issued in the new proprietor’s name. The official record relating to the land ownership is replaced through the title deeds. The Torrens certificate of title evidences this record and is issued by the Registrar of Titles to the owner of the land[18].

Complexities of the Torrents Title System

There were around 40,000 titles in 1887 for the land of the colonies in South Australia. Around 30,000 of these were original deeds and these were lost; around 13,000 of these had been owned by the absentee landowners and a number of these could not be traced; and lastly, around 5,000 of these were, if not defective, seriously complicated. The records of the government of this period denoted that a value of £77,000 had been provided on mortgages for the property of town, and the value of £45,000 was provided for lands of the country. Due to these reasons, the legal profession during that time period was giving them the earnings of £100,000 for every year and this was paid for arranging leases, transfers and mortgages[19].

The earlier titles could be better stated as receipts instead of proper titles and they did not show any kind of position or the size of the land. And the same could be identified by only using the reference number which is contained in the margin. The numbers made reference to the original maps, and the problem here was that the majority of these maps were inaccurate. So, in case an unexpected deed is unearthed, it can make the landowner vulnerable owing to the charges of fraud and even the consequent forfeiture of the livelihood of such individual[20].

This confusion was enhanced with the private subdivisions due to the fact that there was no obligation to appoint or employ the services of licensed surveyor and there was also the condition where the land owners, who were selling the land, refused the surrender of the original deeds. Hence, the buyer, by purchasing the land, was committed to indecisive titles. The complexity in the land titles was further increased in 1839 when, owing to a fire, the district maps were completely destroyed[21]. The original errors were compounded by the obliterated with the survey marks and coupled with the incorrectly located fences. The district divisions, after 1842, were steadily replaced by the nations, and a range of lands were renumbered and resurveyed[22].

The extension of this system to the other states of Australia was done through modifications and the deed registration system had been replaced which was previously operational in all the systems. This was irrespective of the fact that the system did not operate universally in some of the states, particularly when the land transfers undertaken before this system’s introduction were not brought automatically in this system. This was particularly notably in the cases of Victoria and New South Wales, and there is a variation in the system between the territories and the State on the basis of the laws which have been applicable[23].

The Torrens Title system has also been used for land registration purposes in New Zealand from the year of 1860; along with the majority of provinces in Canada which started from the year of 1890; majority of English speaking areas and jurisdictions in US, particularly Hawaii, Massachusetts, Illinois and even Ohio and Minnesota, due to the same being voluntary applied to half of land parcels; and to the republic of Ireland. Even though there was reluctance in a number of jurisdictions for the acceptance of this system, it was still adopted. The land registration system was the foundation for the Torrens system and was initially adopted on 1860s by England and Wales, and was subsequently accepted in the Northern Ireland[24].

Robert Richard Torrens was the Son of Colonel Robert Torrens and an Irish emigrant, who had been appointed to plan the South Australian colonization and in 1840, was appointed as the Collector of Customs in Adelaide. In the thirteen years of his role, Robert was able to impress with the simple and yet efficient system which was used to regulate the ship dealings. The evidence of ownership, under this system, was in form of a certificate and the ship dealings were registered on this system. Conversely to the ship dealings, the land title system was very complex, along with being uncertain and could only be secured by the ones who were being profited from it[25]. Torrens was of the view that the system, through which the ships were being regulated, could be easily used for the land. Even though he got a strong support from the public, the majority of people were under the suspicion that this move would be opposed by the legal professionals. The year of 1853 saw Robert being appointed as the Register-General of Deeds, and later on in the year of 1857, he was elected to the South Australian Parliament’s House of Assembly, whereby he initiated his campaign for reforming in earnest[26].

A Bill was introduced by Robert in June of 1857 before the Parliament for reforming the land title in the nation. The three key principles of this bill were related to the surrendering of title upon the sale of land and a new grant to be issued; the validity of the land dealings to be granted solely through the registration; and the need for solicitors be eliminated through standardized and simple forms, save for the complex cases. As the bill did not have to face much of opposition, it was easily passed in the year of 1857, which led to the incorporation of the Real Property Act 1858. Through this act, a Land Titles Board had been established which would help in providing the title for the real property in form of a certificate, instead of using a deed[27].

When the Real Property Act was passed, Robert decided to resign from the House and at the same time, accepted the position of Register-General of Titles and he was the first person to hold this position. The system drawn by Robert was cheap, simple and could be easily understood. The land of the Crown which was freehold after July 01^st, 1858 were required to be registered at the Land Titles Office and in such cases, the owner was required to be given a copy of certificate which was entered in the official register[28]. The transactions which were affected due to the land, for instance, encumbrances, mortgage was required to be registered under the certificate. In case the land had been sold by the vendor, the person had to surrender the title to the buyer who had registered for the ownership transfer. The validity of titles thus became the responsibility of the state. When this new system was put in place, Robert went to the other states and advocated them to use the same. By the year of 1870, this new system had been successfully adopted across the nation and was also being implemented in the neighboring nation of New Zealand[29]. Since then, this system has been entirely or partially been adopted in different nations across the globe as being a simple system of management of the land title.

Strata title is an innovation done in the nation, in the segment of property law, which has been adopted across the globe. Under this title, the individual ownership of property’s part, which is known as lot, apartment, townhouse or apartment, is combined with the shared ownership in remainder, which is known as the common property for instance the gardens, the foyers and the driveways, by the body corporate or owners’ corporation, community association or strata company, i.e., through a legal entity, depending upon the type of scheme and jurisdiction. This concept is still new and can be dated back fifty years. From then, till now, there are over 270,000 related schemes which encompass around 2 million individuals across the nation[30].

The strata, in Sydney, now accounts for over half of the residential leases and sales owing to its popularity with the investors. There are an increasing number of retail and commercial properties which have been given the strata title. Recently, there have even been noticed some strata titled vineyards. The developments under the strata plan can exist in retail, commercial, retail, for mixed use, resorts, caravan parks, retirement villages and even serviced apartments[31].

Before the strata title, a majority of flats were being sold as he company title, where the company shares which owned the building, would entitle the shareholder to the usage of the particular residential unit in an exclusive manner; or the land on which the building had been formed was being sold for making the owners Tenants in Common. Under this kind of co-ownership, two or a higher number of people own different interests in the land parcels. Through the lawful documentation, the exclusive use of the residential unit could be ensured by the buyer. Though, such kinds of land title could not provide the separate ownership to the individual occupants. Due to this, the building societies and the banks were not keen on lending the money to these purchasers, and if the money was lent, the general rates of such properties were kept higher for such properties[32].

The first version of strata title was devised by the NSW Parliament due to the pressure which was being placed on the government of New South Wales for making the borrowing for such type of residential units easier. For these reasons, on July 01^st, 1961, the Conveyancing (Strata Titles) Act, 1961 was brought into force. Lindsay Gardens was the first strata titled building in the entire world. This building was located at 189 Liverpool Road, Burwood, Sydney, and had a block of 18 units. The NSW Strata Titles Act, in 1973, along with its regulations, meant that the area of individual lots in the strata plans were required to be shown in a far better and precise manner, under the 1961 Act. In 1989, NSW again brought forward the first community title legislation[33].

The other Australian States gradually accepted this concept of strata title. The presence of strata complexes can be noticed fifty years on in the complexes like the Q1 located in Gold Coast, where there are 526 apartments, along with the retail and dining areas, resort pools, a day spa, and conference and meeting facilities. The development of more complex and larger strata developments has brought the challenges in management of the tenant responsibilities, the need for appropriate support services, operational complexity, owner engagement, ageing infrastructure and rising costs. The increasing sophistication and the growth of strata is mirrored in the history of the organizations and companies like the Strata Community Australia, which have grown big and addressed the administrative challenges being presented in front of it[34].

The property title, as stated above, is governed by Strata and Torrens Title. The decision for purchasing the property is daunting and exiting. While purchasing any property, a crucial factor is the type of title, under which the property falls. This is due to the differences in the issues which are related to the property and the ongoing implications[35].

Under the Torrens Title, the property is one under which the buyer owns the house and the land on which the property has been built. This denotes the most traditional form of ownership and it denotes that the sole owner of the property is responsible for the upkeep of the property, which is both for the inside and the outside of the land block. However, the properties like unit, villa or townhouse is usually purchased under the Strata. When one of such property is purchases, there are common areas which are used by the people, who live in the apartment block or the complex, which includes the gardens, driveways and the like. These common areas are maintained through the owners of the unit in a collective manner, through the Corporation of the Owners due to the fact that they are shared. The individual has the sole responsibility of upkeep of the properties’ inside; however, the maintenance expenses are required to be paid for the usage of common areas[36].

There are also financial considerations related to the choice of property title. While purchasing a property, bills and fees have to be paid on regular basis, which includes the council and water rates. The strata property is coupled with the additional levies, which factor in the budget. There is also a need for strata payments from the owners on an ongoing basis. The ongoing maintenance and upkeep are covered through levies for the common property of the Strata complexes. There are also a range of rules and regulations surrounding the strata property and these are given the name of bylaws, through which, the changes can be made to the property for its improvement[37].

Conclusion

Through the discussion carried on above, some light was thrown over the property ownership in Australia, which has been modified and revolutionarily changed with the Torrens title system. Torrens title is an effective system of land registration of the nation where the land holding register is maintained through the guarantees of the state and is an indefeasible title for the ones who have registered their title. The land ownership in this system is transferred through the title registration, instead of making use of the deeds. The key objective of the Torrens title is to simplify the land transactions and also to certify the absolute title ownership in reality. To Torrens title has become persuasive around the nations which have been strongly influenced due to the commonwealth nations. This title has been named after Robert Richard Torrent who was a revolutionary leader in the property ownership field in the nation.

As highlighted earlier, the system proposed by Torrens was based on title by registration, instead of the other way round of registration of the title. Hence, this system eliminated the need of establishing the chain of attaining the title. The title under this system is guaranteed by state and in cases of error or fraud in this scheme, it is given the support of a compensation scheme. Apart from the Torrens title system, there is another title system which is applicable in the nation and this one is the strata title system. In this system, the property law is segmented and in such cases, along with paying for acquiring the property, the money is also to be paid for its maintenance. Further in this system, only a part of property is owned by the buyer, whereas in Torrens title system, both the land and property comes under the ownership of buyer. Hence, the Torrens title system is a revolutionary concept for Australia and the same is true for the rest of the nations, across the globel.

Articles/ Books/ Reports

Berg S, Coming to Terms: Aboriginal Title in South Australia (Wakefield Press, 2010)

Boast R, Buying the Land, Selling the Land: Governments and Maori Land in the North Island 1865-1921 (Victoria University Press, 2008)

Combe GD, Responsible Government in South Australia, Volume 1 (Wakefield Press, 2009)

Davison M, Monotti A, and Wiseman L, Australian Intellectual Property Law (Cambridge University Press, 3^rd ed, 2015)

Dillon C, Landed Global: Key knowledge you need to buy international property (Dillon Communications Ltd, 2014)

Esmaeili H, and Grigg B, The Boundaries of Australian Property Law (Cambridge University Press, 2016)

Fields CK, and Fields CK, Essentials of Real Estate Law (Wolters Kluwer Law & Business, 2016)

Gibson A, and Fraser D, Business Law (Pearson Higher Education AU, 2013)

Gillies P, Business Law (Federation Press, 12^th ed, 2004)

Hallenborg MA, Real Estate Due Diligence: A Legal Perspective (Routledge, 2015)

Hepburn S, Australian Principles of Property Law (Routledge, 2^nd ed, 2013)

Latimer P, Australian Business Law 2012 (CCH Australia Limited, 31^st ed, 2012)

Lilienthal G and Ahmad N, ‘Australian Aboriginal Human Rights And Apprehended Bias: Skirting Magna Carta Protections?’ (2015) 27 Denning Law Journal 151

Lindeman J, Mastering the Australian Housing Market (John Wiley & Sons, 2010)

Loenen B, Developing Geographic Information Infrastructures: The Role of Information Policies (IOS Press, 2006)

Sarwari B, The Torrens System. Indefeasibility and the Fraud Exception (GRIN Verlag, 2013)

Sherry C, Strata Title Property Rights: Private governance of multi-owned properties (Routledge, 2016)

Smits M, Everything You Need to Know (But Forget to Ask) When Buying or Selling Property (John Wiley & Sons, 2012)

Taylor G, A Great and Glorious Reformation: Six Early South Australian Legal Innovations (Wakefield Press, 2005)

Winterton G, State Constitutional Landmarks (Federation Press, 2006)

Others

Craddock Murray Neumann Lawyers Pty Ltd, Property Ownership and Registration in Australia (2012) <https://www.craddock.com.au/Document/Property+Ownership+and+Registration+in+Australia.aspx>

Department of Premier and Cabinet, Torrens titles (2017) <https://www.sa.gov.au/topics/planning-and-property/certificates-of-title/torrens-titles>

Hartley A, The Real Property Act In Australia (2016) <https://www.irwaonline.org/eweb/upload/web_janfeb_2016_Australia.pdf >

Lamrocks Solicitors, Strata vs Torrens Title: What does it mean for you? (2017) <https://www.lamrocks.com.au/document-34/strata-vs-torrens-title-what-does-it-mean-for-you>

Macnaughton S, Basic Land Title and Survey Practice (18 March 2013) <https://qela.com.au/wp-content/uploads/2014/11/QELA13TLANDTENpapers1.pdf >

Pike D, Introduction Of The Real Property Act In South Australia (2017) <https://www.austlii.edu.au/au/journals/AdelLawRw/1961/4.pdf >

Real Estate Defined, Torrens title system (2017) <https://www.realestatedefined.com/html/terms_defined/Torrens_title.html>

Real Estate Institute of South Australia, Torrens Title Explained (2017) <https://www.reisa.com.au/publicinfo/general-tips-and-traps/torrens-title-explained>

Strata Community Association, What is Strata? (2017) <https://www.strata.community/understandingstrata/what-is-strata>

UCHK Consulting Ltd, The Australia Torrens System Of Property Ownership For Investors (2017) <https://uchkconsulting.com/australia-torrens-title.html>

Victoria State Government, Torrens titles (2017) <https://www.propertyandlandtitles.vic.gov.au/land-titles/torrens-titles>

Craddock Murray Neumann Lawyers Pty Ltd, Property Ownership and Registration in Australia (2012) <https://www.craddock.com.au/Document/Property+Ownership+and+Registration+in+Australia.aspx>

Samantha Hepburn, Australian Principles of Property Law (Routledge, 2^nd ed, 2013)

Mark Davison, Ann Monotti and Leanne Wiseman, Australian Intellectual Property Law (Cambridge University Press, 3^rd ed, 2015)

UCHK Consulting Ltd, The Australia Torrens System Of Property Ownership For Investors (2017) <https://uchkconsulting.com/australia-torrens-title.html>

Cathy Sherry, Strata Title Property Rights: Private governance of multi-owned properties (Routledge, 2016)

Greg Taylor, A Great and Glorious Reformation: Six Early South Australian Legal Innovations (Wakefield Press, 2005)

Real Estate Institute of South Australia, Torrens Title Explained (2017) <https://www.reisa.com.au/publicinfo/general-tips-and-traps/torrens-title-explained>

Paul Latimer, Australian Business Law 2012 (CCH Australia Limited, 31^st ed, 2012)

Christopher Dillon, Landed Global: Key knowledge you need to buy international property (Dillon Communications Ltd, 2014)

C. Kerry Fields and Kevin C. Fields, Essentials of Real Estate Law (Wolters Kluwer Law & Business, 2016)

Andy Gibson and ‎Douglas Fraser, Business Law (Pearson Higher Education AU, 2013)

Victoria State Government, Torrens titles (2017) <https://www.propertyandlandtitles.vic.gov.au/land-titles/torrens-titles>

Hossein Esmaeili and ‎Brendan Grigg, The Boundaries of Australian Property Law (Cambridge University Press, 2016)

ohn Lindeman, Mastering the Australian Housing Market (John Wiley & Sons, 2010)

Mary Ann Hallenborg, Real Estate Due Diligence: A Legal Perspective (Routledge, 2015)

Shaun Berg, Coming to Terms: Aboriginal Title in South Australia (Wakefield Press, 2010)

Real Estate Defined, Torrens title system (2017) <https://www.realestatedefined.com/html/terms_defined/Torrens_title.html>

Bastiaan Loenen, Developing Geographic Information Infrastructures: The Role of Information Policies (IOS Press, 2006)

Department of Premier and Cabinet, Torrens titles (2017) <https://www.sa.gov.au/topics/planning-and-property/certificates-of-title/torrens-titles>

Peter Gillies, Business Law (Federation Press, 12^th ed, 2004)

Gary Lilienthal and Nehaluddin Ahmad, ‘Australian Aboriginal Human Rights And Apprehended Bias: Skirting Magna Carta Protections?’ (2015) 27 Denning Law Journal 151

Douglas Pike, Introduction Of The Real Property Act In South Australia (2017) <https://www.austlii.edu.au/au/journals/AdelLawRw/1961/4.pdf >

Gordon Desmond Combe, Responsible Government in South Australia, Volume 1 (Wakefield Press, 2009)

At 17

Alan Hartley, The Real Property Act In Australia (2016) <https://www.irwaonline.org/eweb/upload/web_janfeb_2016_Australia.pdf >

Bill Sarwari, The Torrens System. Indefeasibility and the Fraud Exception (GRIN Verlag, 2013)

George Winterton, State Constitutional Landmarks (Federation Press, 2006)

Stuart Macnaughton, Basic Land Title and Survey Practice (18 March 2013) <https://qela.com.au/wp-content/uploads/2014/11/QELA13TLANDTENpapers1.pdf >

Richard Boast, Buying the Land, Selling the Land: Governments and Maori Land in the North Island 1865-1921 (Victoria University Press, 2008)

Strata Community Association, What is Strata? (2017) <https://www.strata.community/understandingstrata/what-is-strata>

At 29

Ibid

Ibid

Ibid

Mary Smits, Everything You Need to Know (But Forget to Ask) When Buying or Selling Property (John Wiley & Sons, 2012)

Lamrocks Solicitors, Strata vs Torrens Title: What does it mean for you? (2017) <https://www.lamrocks.com.au/document-34/strata-vs-torrens-title-what-does-it-mean-for-you>

Ibid