Title recording systems are used to provide notice of real estate ownership. In the United States, most people will record the deed to their real estate in the county where the property is located, usually at a county recorder's office. The Torrens title system is an alternative means of recording title to real estate that is significantly different than simply recording your deed.
Torrens Title and Registered Property
In a Torrens title system, instead of recording your deed with the county, you seek to register your title. The system was originally developed by Sir Robert Torrens for a ship registry system in Australia. The Torrens system has been adopted in England, Canada, and some states in the United States, including Colorado, Georgia, Hawaii, Massachusetts, Minnesota, New York, North Carolina, Ohio, Virginia and Washington. Land successfully registered under the Torrens system is called "registered property" or "Torrens property."
Registering Land Under a Torrens System
The registration process is a court procedure whereby an Examiner of Title appointed by a court reviews title to the property. If the title is determined to be good, the court will issue a Certificate of Title. The Registrar of Title maintains the records and files the certificates. A Certificate of Title confirms that legal title is held by the certificate holder and is good against any claims that have not been declared or recorded at the time of registration.
The Torrens title system has some significant advantages over the traditional American property recording system. Title registered in a Torrens system is guaranteed by the state. If you possess a Certificate of Title, it will defeat any claims on the property that were not declared during the registration proceeding. Registration protects landowners from adverse possession, which is a claim to land based upon open, continuous and hostile possession of it rather then legal title. Some argue that the Torrens system is more efficient.
The Torrens title system is not without disadvantages. Registering land is argubly more expensive. The process involves court costs and can also require retaining an attorney. Title insurance is still often required by lenders because of certain exceptions in the system that may result in a loss, such as a mechanics lien. While many systems have insurance funds to compensate purchasers with claims, the funds are often underfunded and private title insurance is still sought by owners.
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