Torrens Certificate

What Is a Torrens Certificate?

A Torrens Certificate, also referred to as a certificate of title, is a document that assigns unassailable ownership of real property to the registered titleholder. The certificate acts as the ultimate authority on the title to a property, and its legal supremacy makes recording deeds unnecessary.

Key Takeaways

  • A Torrens Certificate is a document assigning full, indisputable real property rights to a registered titleholder.
  • With a Torrens Certificate, there is no need to record a deed.
  • The Torrens System is rare today, with only 11 U.S. states recognizing its use.
  • The Torrens System includes an insurance policy sponsored by the government to resolve title disputes.

Understanding the Torrens Certificate

The Torrens Certificate was originated in South Australia in the 1850s by Sir Robert Torrens. Seeking to simplify and facilitate land sales, Sir Robert created a system in which a certificate of title would bestow ownership upon its holder. This certificate was issued to a purchaser following a search of the property’s legal history by a government registrar and would provide future purchasers with an indisputable record of ownership.

The Torrens System includes a government-sponsored insurance policy to resolve title disputes rather than the private title insurance required for the sale of real property today. Torrens property owners are guaranteed that no other parties have a claim to their property. Any potential claimant to a property not listed on the Torrens Certificate, however legitimate his or her claim, would be forced to petition a government indemnification fund for compensation.

The Torrens System spread throughout the British Commonwealth and to the United States in the late 19th century but is in limited use today. In the U.S., it remains an optional alternative to the deed recording system - the current standard practice in real estate transactions - in 11 states. 

Today, a Torrens Certificate or Torrens Title would appear similar to an automobile title issued by a local DMV. It lists physical details of the property in question, such as boundaries, easements, or rights of way, and the name and addresses of individual or corporate owners and any lien holders. 

Torrens System Principles

The Torrens System relies on the three principles below.

Mirror Principle

The Mirror Principle states that the title to any property will reflect all of the current facts of the title. It will show the current owner and all outstanding registered interests in the land, including mortgages, easements, and liens. Zoning restrictions and similar matters generally will not show on the title.

Curtain Principle

The Curtain Principle means that the purchaser does not need to search behind the current certificate of title because it contains all of the necessary current information about the title.

Insurance Principle

The insurance principle reflects the obligation of the land titles registry to guarantee the accuracy of every title to land. The registry maintains an insurance fund so that if an error occurs, the injured party will receive compensation.

The Torrens Certificate System vs. the Recording of Deeds

During the late 19th and early 20th centuries, the recording of deeds was far less centralized and automated than today. Unlike the Torrens System, the recording system maintains all records on a property in a central municipal clearinghouse, often a county registrar. Under the recording system, the land is often referred to as “Abstract Property."

Any transfer of ownership under this system requires an exhaustive search that would, ideally, uncover any irregularities in the history of the property. During the late 19th and early 20th centuries, the recording of deeds was far less centralized and automated than it is today. Sir Robert intended his system to facilitate transactions under these conditions.

Pros and Cons of the Torrens System

  • Acceptance of the title in those jurisdictions where there is proper supervision of the original procedures for transfer

  • Certificate of Title usually easier to work with than a title abstract

  • Registration prevents acquiring a property by adverse possession against a registered owner

  • Not widely accepted

  • High initial expenses

  • Cumbersome and slow

  • Lack of trained personnel causing inconsistencies in recitals and other terms

  • Possibility of erroneous filings

Real World Example

Torrens litigation is now rare; however, a 2010 Hawaii case demonstrates the supremacy of the certificate in resolving disputes. In this case, the State of Hawaii claimed ownership of subsurface and geothermal rights associated with a property whose title had been held by a family estate that planned to subdivide the land for resale. The family held a 1938 title issued by the Hawaii Land Court, which did not include the state’s claim to those mining rights. In the 2010 dispute, the Land Court ruled in favor of the estate, stating that the Torrens Certificate issued in 1938 precluded the state’s assertion of rights to subsurface assets in Hawaii.

Frequently Asked Questions

What Does Torrens Property Mean?

Once title to a piece of real estate is registered in a Torrens system and a certificate of title issued, no other conveyance, lien, instrument, or proceeding can affect the title unless it is also filed and registered with the registrar of titles in the county where the real estate is located.

What Was the Torrens Act?

Originally enacted in Australia as the Real Property Act 1858, the statute created a system by which land ownership is transferred by registering the transfer of title rather than by using deeds. The owner receives a Certificate of Title, a copy of the listing in the title register, rather than a deed.

What States Use the Torrens System?

Eleven states use the Torrens system to a greater or lesser extent. These states are Colorado, Georgia, Hawaii, Illinois, Massachusetts, Minnesota, New York, North Carolina, Ohio, Virginia, and Washington. It is also used in the U.S. territory of Guam. Illinois was the first state to adopt a Torrens Title Act but allowed it to lapse in 1992. California used a version of the Torrens system from 1914 to 1955.

What Countries Use the Torrens System?

The Torrens System is used in the British Commonwealth countries. Currently, it is primarily used in Australia, Canada, Fiji, the Dominican Republic, Ireland, Israel, Malaysia, New Zealand, the Philippines, Russia, Saudi Arabia, Singapore, Sir Lanka, and Thailand.

The Bottom Line

While it offers some efficiencies, the Torrens System has not been widely adopted in the United States. It is most commonly found in countries that were previously members of the British Empire and were members of the British Commonwealth.