Chapter 7: Title Registration - the Torrens System Flashcards

Chapter 7: Title Registration - the Torrens System Flashcards

Torrens land/ also known as Registered land/ occursthroughout the world/ particularly in Canada and Australia/ The court then issues a Court Order telling the Registrar of Titles to issue a Certificate of Title showing the exact ownership/ boundaries/ liens/ and all other aspects of title determined at the court hearing/ The list of documents recorded on Torrens property continues on the same certificate until the Certificate of Title is cancelled either due to a conveyance of any sort or when there is a request for an Exchange Certificate under MSA 508/421/ There is no guarantee that title will be good in the future onRegistered land/ Registered land titles are distinctly different fromabstract land titles/ The abstract records show the history of the property fromthe original patent (transfer from the U/S/ government) to the most current date recorded (often within hours of the current day and time/) Parcels like the Target Field/ Viking Stadium/ the Mall of America/ and the (former) Metrodome are Registered Lands/ both because of their complex titles and because of the special protections provided under the law/ The Examiner of Titles acts as legal adviser to the Registrar of Titles (Recorder) and is authorized by state statute to review documents and issue "Examiner's Directives" to the Registrar of Titles instructing them as to how to handle complicated Torrens title matters/ For example/ the Examiner of titles typically reviews documents from the Probate Court or a Mortgage Foreclosure to assure everything is acceptable and a new or corrected Certificate of Title will be issued/ Advantages to Registered Land Some people choose to register their property because there are some BIG advantages to Registered land over abstract land/ These

include: Interests created prior to the initial certificate of title

are estopped from coming forward once properties are registered/ Therefore/ parties who own property worth a great deal of money/ such as a multimillion dollar commercial building/ may want extra protection/ They can avoid any potential old claims and claims of litigation that might exist though the Registration process/ This tells the title searchers that the property is in the process of being converted from abstract to Registered land or has been Registered/ Disadvantages to Registered Land When title problems occur after land is Registered/ it may take a Proceedings Subsequent to Initial Registration (court hearing) to repair what might have been accomplished with an affidavit or other simple repair on abstract property/ This can be expensive and time consuming to accomplish/ The Torrens System Works on Three Principles: The Mirror Principle or/ what I call "what you see is what you get" - WYSIWYG/ The current Certificate of Title mirrors accurately and completely all then current facts about a land title/ As new items are filed/ they stay on the certificate until a new Certificate of Title is issued/ The Curtain Principle - One does not need to go behind the

current Certificate of Title because the current certificate contains all relevant information about the title/ Old and changed information/ such as paid mortgages/ are added to the current certificate when proof of payment is given/ When title changes hands/ a new certificate is issued and those items that "cancel each other out/" like a mortgage that was paid off are removed when a new certificate is issued/ The Assurance Principle - the legal system provides for monetary compensation of loss by the state if there are errors made on the Certificate of Title by the respective Registrar of Titles office that causes a monetary loss to an owner or lender/ Money to pay claims is held in the Minnesota General Assurance Fund/ In effect/ it is a second guarantee on title/ In the early 1900s/ Minnesota adopted a Torrens title system to simplify complex titles/ If the documents are electronically filed/ the memorial document numbers may lead to a link through the document number that provides a copy of the full document/

To start the Registration process/ an owner files an Application to Register with the County's Examiner of Titles/ The application asks the court to register title and sometimes to register a specific boundary/ In order to register land/ the Examiner of Titles is required by law under MSA 600/19 to review an updated abstract of title showing the complete chain of title for the land/ The

statute reads:

"In any action wherein the title to real property is in controversy/ any abstract of title thereof/ duly certified by any bonded abstracter or by any county recorder of any county wherein such real property is situated/ shall be received as prima facie evidence of all instruments therein referred to/ together with the records thereof as recorded in the office of the county recorder of such county/" As Registered land is a state-sponsored system/ any liens created at the state level (e/g/ state tax liens or judgments) must be filed on the certificate to have legal effect/ There is also a notice published in a local legal ledger (newspaper) and posting of the hearing at the courthouse as to the day/ time/ and purpose of the court hearing/ In some counties/ the county recorder and Registrar of Titles are the same person or office/ The Torrens system of title registration is named forSir Robert Torrens/ an Australian commissioner of customs who developed this concept in 1858 as a system for the registration of merchant ships/ Once Registered/ any new documents recorded no longer appear in the county recorder's abstract records/ they only appear on the Certificate of Title in the Registrar of Title's office/ The seven statutory exceptions are:(1) liens/ claims/ or rights arising or existing under the laws or the Constitution of the United States/ which this state cannot require to appear of record;(2) the lien of any real property tax or special assessment;(3) any lease for a period not exceeding three years when there is actual occupation of the premises thereunder;(4) all rights in public highways upon the land;(5) the right of appeal/ or right to appear and contest the application/ as is allowed by this chapter; (6) the rights of any person in possession under deed or contract for deed from the owner of the certificate of title; and (7) any outstanding mechanic's lien rights which may exist under sections 514/01 to 514/17/ In the Torrens system/ when the title is registered in the name of the owner/ with a specific legal description a "new source of title" is created/ At that time/ a new Certificate of Title is created showingthe current ownership and remaining liens and encumbrances on the property/ A deed could/ for example/ contain a reference to a restriction/ a mortgage/ or other item that could impact the title/ Disadvantages to Registered Land The Torrens system that does exist in a number of other jurisdictions varies significantly/ For example/ most Torrens states still require that an Owner's Duplicate Certificate of Title or Mortgagees Duplicate Certificate of Title be issued/ So/ the handling of registered land documents in those jurisdictions is confusing to lenders and attorneys and others outside the local area that are familiar

with a different handling of their respective Torrens registration system/ In Minnesota/ some counties with very little Torrens/ also known as Registered lands/ have been converted back into abstract properties/ Unusual/ but it has happened/