Torrens title

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 of title of the person recorded on the register as the proprietor, 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, who designed, lobbied for and introduced the private member's bill which was enacted as the Real Property Act 1858 in the colony 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, leaseholds and strata titles.

Overview

The Torrens title system operates on the principle of "title by registration" rather than "registration of title". The system does away with the need for proving a chain of title. 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.
In most jurisdictions that have implemented a Torrens title system, there will be parcels of land which are still unregistered.
The Torrens system works on three principles:

Mirror principle – the register reflects accurately and completely the current facts about title to each registered lot. This means that each dealing affecting a lot must be entered on the register and so be viewable by anyone.
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.
Indemnity principle – provides for compensation of loss caused by private fraud or by errors made by the Registrar of Titles.
Background

Common law

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 and the ever-present possibility of undetected outstanding interests. In Pilcher v Rawlins, in the Court of Chancery in England and Wales, 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 purchaser.
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.

Deeds registration

The effect of registration under the deeds registration system 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.

Creation

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.

Land register

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 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.
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. Claims for compensation are very rare.

Effect of registration

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. 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.

Indefeasibility of title

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. 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:

those listed on the title,
those claiming the land on a prior folio ),
where the land is included by wrong description on the part of the Registrar and the proprietor is not or has not derived title from a purchaser ‘for value’,
“paramount interests” -) – these interests, although even possibly unregistered, are 'superior' to interests that are registered.

Additionally, there are other exceptions or circumstances that can defeat indefeasibility, such as:

fraud committed by the registered interest holder . See, for example, the New Zealand case of Efstratiou, Glantschnig, and Petrovic v Glantschnig,
judicial action, where it can be shown that there was some contractual promise or undertaking by the registered party vis-à-vis the unregistered party,
inconsistent legislation,
volunteer, where the registering party acquires the interest for no consideration. By contrast, in New South Wales volunteers are entitled to indefeasibility.