Land is the source of all wealth. The limitation of land use right in ancient feudal system has changed with the modern trend of land commercialization. Collateral and trust property have been largely abolished and replaced by paid ownership.
For businesses and economies, businesses require simplicity, speed, and certainty in their business transactions. In the early days, however, land was not subject to commercial transactions and did not benefit from the simple direct rules that governed such transactions. Legal transfers of land ownership are cumbersome and involve thousands of expensive and time-consuming technologies. But what has done best in the United States is the division of land ownership and property between people, which has forced people to adopt a simplified, commercial method of transferring ownership. Australia has taken a similar approach.
The system removes legal and mechanical barriers to the transfer of ownership and, in this context, tends to release land and turn it into a liquid asset. The modern trend in law is to treat both personal property and real property uniformly in the transfer of ownership process, although real property moves slowly along this route and is often opposed by special interests. The economic losses to society as a result of the persistence of ancient restrictions on the free use of land and the transfer of tenure have been enormous and have contributed in large part to the industrial problems which we often refer to as ‘depressions’.
Suffolk County is a case in point. Suffolk County owned more than 100,000 land due to the poor tax process, so they had a hard time selling the land. Property companies and others have used dummy dividers to settle tax issues, but the process costs hundreds of dollars and prohibits its use to remove land of lesser value. The Court of Appeals confirmed Torrens’ constitutionality in 1926, following an opinion from Justice Cardozo. After this decision thousands of tax-dodger lands were registered in Suffolk. A Suffolk treasurer reportedly said his county had paid more than $100,000 in back taxes in one year on land registered with the Torrance system, which had not paid taxes for years. The ability to register an entire development project in one process, sometimes covering thousands of lots, reduces the cost of registering a single lot to a few dollars, sometimes as low as $5.00 or $6.00. But back taxes are a smaller part of the proceeds. The real benefit lies in land use. Homes were built, activities resumed, and current taxes paid to communities increased.
Limited Application Scope Although it is widely used in the world, but the application scope of the system is limited. Sometimes there is no need for such a system in places, such as where the land market is less active and there is little transfer of land, so it is easy to know and prove who owns the land. As the market economy developed and matured, the Torrance system was gradually established, and where there was no market economy, such a system was not established. But ownership regimes may not be accepted even in places where market economies are strong, such as some States in the United States where Torrens’ system does not work.
The initial cost of establishing the system is high, the system is too large, a large number of continuous financial support and guarantee are needed, the establishment and improvement of the registration system cycle is long, not a day’s work, these and the market economy to pursue the efficiency, the principle of return on income is counter. In addition, relevant interest groups, fearing damage to their vested interests, are unwilling to accept the new system and oppose the registration system vigorously.
The system helps to improve land transport efficiency and reduce transaction costs. First of all, the ownership system ensures the accuracy and completeness of the land ownership certificate. The parties to the transaction trade directly on the land title certificate, which makes the process much shorter. A client may conduct his business without the assistance of a professional lawyer. Shorter, simpler processes bring convenience to all parties and help them save time and money.
The system helps speed up land transfers and thus economic development. The most important thing is that land can be transferred quickly and without any certainty. Land will be put to good use through efficient systems. The development of market economy is mainly based on efficient flow and resource allocation. The ownership system is simplified and land transactions are established to facilitate the rapid flow of land ownership among those participating in the relevant market. As stated earlier in this report, land is humanity’s most valuable asset, so ownership systems actually contribute significantly to the rapid distribution of its most valuable resources.
Indefeasibility of title refers to the registered ownership of the property (land or building) which determines who will have the first interest or ownership in the property. Not only that, Indefeasibility is also an integral part of property law. If Indefeasibility did not exist, then competing claims for land ownership might lead to inconsistencies in the property law system.
Regarding the Torrance system, it simplifies the land processing process because it relies on Indefeasibility for the concept of ownership in which registered equity takes precedence over all other equity. This allows buyers to determine ownership or interest in real estate by relying solely on title registration. Therefore, they do not need to investigate whether previous transfers were valid. This provides a higher level of security in real estate transactions. But Indefeasibility is not absolute. The two major exceptions which are Personal Action and Fraud.
there is a famous case that is Mayer v Coe (1968) for Indefeasibility of the Torrens title. Mrs. Meyer left her lawyer’s certificate of title to her lawyer. But the lawyer forged Mrs. Meyers’s mortgage signature to benefit Mr. Coe. The court held that since Mr. Coe had been registered and because Mr. Coe was not the party to any fraudulent activity performed by Mrs. Mayers’s counsel, Mr. Coe was entitled to immediate ‘Indefeasibility’ even if he obtained the registration through forgery.
The Indefeasibility in the article 42 of the Real estate Law has always been controversial whether the phrase ‘Indefeasibility first’ or ‘Indefeasibility deferred’. And according to Mayer V Coe case, “indefeasibility” should be preferred to “immediate”.
The Torrens system can establish a method system suitable for the needs of society and professionals. The system is simple, cheap and fast, while providing safe and accurate titles. Torrens Title can provide certainty to property professionals like Real Estate Agents and banker, it also can make society more convenient.
For bankers, Torrens is often seen as an improvement on the old system of deeds registration. Such a system would make it easier to get credit. This is particularly true for microcredit, where the cost of preparing and reviewing summaries is effectively prohibited. Not only is credit more readily available, but interest rates are reduced in proportion to the reduction in the uncertainty involved.
For Real Estate Agents, Torrens Title system will make it easier to transfer property and increase their business. And it would correct the existing situation of title insurers taking over significant parts of the land brokerage business.
For the community, The Torrens system is a safeguard against forgery because government registration systems contain the original documents, eliminating any chance of forgery or lost contracts. In addition, Torrens is a simpler system than the old one, which allows every citizen to understand his or her own documents, ensuring social stability and reducing the incidence of fraud.
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