Torrens Advantages

7/31/2019 Torrens Advantages

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CHAPTER 3PROPERTY IN RELATION TO THE PERSON TO WHOM IT BELONGS

Art. 419. Property is either of public dominion or of private ownership. (338)Art. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports andbridges constructed by the State, banks, shores, roadsteads, and others of similarcharacter;(2) Those which belong to the State, without being for public use, and are intendedfor some public service or for the development of the national wealth. (339a)

Art. 421. All other property of the State, which is not of the character stated in thepreceding article, is patrimonial property. (340a)Art. 422. Property of public dominion, when no longer intended for public use or for publicservice, shall form part of the patrimonial property of the State. (341a)Art. 423. The property of provinces, cities, and municipalities is divided into property forpublic use and patrimonial property. (343)Art. 424. Property for public use, in the provinces, cities, and municipalities, consist of theprovincial roads, city streets, municipal streets, the squares, fountains, public waters,promenades, and public works for public service paid for by said provinces, cities, ormunicipalities.All other property possessed by any of them is patrimonial and shall be governed by thisCode, without prejudice to the provisions of special laws. (344a)Art. 425. Property of private ownership, besides the patrimonial property of the State,

provinces, cities, and municipalities, consists of all property belonging to private persons,either individually or collectively. (345a)


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Outline of the TorrensActBy Shaun Watchie Perry

History of Torrens Act (Registered Land)o Modeled in 1858 by Sir Robert Torrens after a method for recording ownership

interest in ships that Torrens encountered in his work as an Australian customsadministrator.

o Torrens is a system that was originally a ship registry system whereby each shipowner was assigned a Certificate that included certain information. When a vesselwas sold, the seller surrendered the Certificate for cancellation and a new

Certificate was given to the new owner.

o Torrens system ultimately spread to many English speaking countries, includingEngland and Canada.

o Since late 1800s as many as 21 states in United States had enacted Torrenslegislation.1o With an abstract system of title, an abstract is evidence of title. In the Torrens

system, the Certificate of Title IS the title.

o The Torrens system differs from traditional recording systems in that itestablishes a legal procedure whereby the state guaranteesthe owners title.

o Process begins with Court proceedings that involve Court approval of the

examination of the history oftitle by the Examiner of Title.

Differences between Examiner of Title and the Registrar of Title: TheExaminer of Title is an attorney, appointed by Court who reviews the

title and must sign off on court orders approving transferring of titlecertificates. The Registrar of Title maintains the Torrens system

property records and is responsible for registering title by filingcertificates of title.

The Court ultimately issues a Certificate of Title to the owner thatestablishes legal ownership against any claims that remain undeclared orunrecorded at time of registration.2

Once the property is registered in the Torrens system, subsequentvoluntary (as opposed to involuntary) transfer does not require such anextensive procedure. A purchaser need only examine the Certificate of

Title to verify ownership and learn of any valid claims.

Ease of transfer following the registration represents an important benefitbecause under the recording system a full title search must be done inconnection with each transfer.

Differences between the Torrens system and the Recording system: Under Recording system, a good faith purchaser bears the risk of

losing his interest in the land if a claimant later appears.
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Under the Torrens system, the owners certificate of title defeatsany competing claims not declared at the initial proceedings.

Under Torrens system, the possessor of the land retains the landand the claimant retains monetary compensation, whereas under

the recording system (with title insurance) the claimant gets the

land and the possessor is compensated. Torrens Indemnity Fund financed by registration fees ( e.g., in

Washington State, upon registration owner pays to the Registrar of

Titles 1/40 of 1% of the assessed value of the real estate based onthe last tax assessment).

Torrens VS RecordingREA M. PIA KEM GF

1. Reduce Records enormously2.

Eliminate Repeated Examination of Title3. Abolished endless fees

4. Makes fraud almost impossible5. Protect against encumbrances (hindrances) not noted on the torrens certificate6. Instantly reveal ownership7. It Assures8. Keep up the system without adding to burden of taxation, system beneficiary pay the

fees9. Eliminate tax titles10.Makes possible the transfer of title within hours not days11.Give eternal title as state ensure perpetuity=permanence12.

Furnishes state title insurance rather than private title insuraance

Advantages

Torrens system purportedly offered advantages over the Recording system becauseit cleared clouded titles thereby promoting land marketability and development.

Much of the early motivation for Torrens registration in the United States was topromote land development during periods of rapid urbanization, e.g., used

extensively after the great Chicago Fire of 1871 when the public land records weredestroyed.

Land registration has been used to clarify boundaries when early property linesbecame blurred or historical surveying techniques were found to be unreliable.

The Torrens system protects absentee owners against loss of their land to squattersunder adverse possession statutes.

The Torrens system is arguably efficiency enhancing.


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Disadvantages

Despite the above referenced advantages, Torrens has been put to fairly limited use in ourcountry. This lack of success suggests that the system disadvantages outweigh the

advantages in most jurisdictions.

The principal disadvantage is the cost of registering a parcel which involves filing asummons and petition in court and paying an application fee as well as court filing fees.

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Additionally, there are the additional attorneys fees and court cost involved withinvoluntary transfers.

Even though there is an insurance fund, it is extremely under-funded and most purchasersof registered land (and their lenders) still require title insurance which is an additionalcost.

Process is antiquated and very cumbersome particularly with involuntary transfers(described below).

Owners of registered land buy private insurance and lenders often require it becausecertification of ownership under Torrens system admits several exceptions that pose

threats of loss.

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There is resistance to the Torrens system by parties, especially lawyers and private title

insurers.

Involuntary Transfers5o Under the Torrens system, the owners of registered land may voluntarily convey,

mortgage, lease, charge or otherwise encumber the property as if it had not been

registered. In this regard, owners may use forms of deeds, trust deeds, mortgagesand leases or other voluntary instruments. However, no voluntary instrument of

conveyance shall take effect as a conveyance unless it is so registered.

oThe exceptions to this are various involuntary transfers, described below:

o Probate transfers

Probate under non-intervention Will Probate without non-intervention Will Trust transfers Intestate transfers

Transfer by community property agreement (in community property statessuch as Washington)

Award in lieu of homestead Mortgage foreclosure Deed of Trust foreclosure Real Estate contract forfeitures County tax foreclosure Transfers from guardianship estates Quiet title actions Where new title is claimed by heir-ship but no probate occurred
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Torrens Advantages