A Simple Registry Search is Insufficient for Investigating Titles under the "Deeds" System

In my previous article, I raised the question of whether the Torrens principle applies to the challenges faced by "Dina's Title," which was issued under the repealed Government Land Act (GLA) regime. If you missed it, it would be best to read it first to gain a better understanding because this one attempts to answer that question. The definitions of all capitalized terms from the previous article are also applicable here.

It would be a good idea to start by brushing up on our knowledge of the methods of recording land interests in Kenya. The two systems of registration pursuant to which dealings in land can be effected are: (a) Registration of deeds and documents, and (b) Registration of titles. Procedural requirements in the respective registration systems are dictated by the particular land regime under which the land falls, which are:

1.???The Registration of Documents Act, Cap. 285 (RDA) – the oldest statute and it entailed registration of documents affecting land except documents which fall under the optional clause (although other documents can be accepted for registration);

2.???The Land Titles Act, Cap. 282 (LTA) – primarily has its relevance with respect to land falling within the coastal region;

3.???The Government Lands Act, Cap. 280 (GLA) – it was used by colonial authorities as the basis for alienating government land by way of issuing grants to settlers;

4.???The Registration of Titles Act, Cap. 281 (RTA) – was introduced in Kenya to facilitate the process of transfer of land through titles registration;

5.???The Registered Land Act, Cap. 300 (RLA) – was planned to be a conversion statute with the intention that any expired grants or leases be renewed under this Act in order to phase out previous Acts. Due to the fact that conversion was optional and certain leases had terms as long as 999 years, this Act proved ineffective in attaining that goal;

6.????The Sectional Properties Act, 1987 (SPA) – introduced the condominium process of property, which can also be implemented in horizontal settings like planned developments or gated communities. It operates on the basis that each separate unit or apartment within an entire block can be subject of individual titles completely independent of each other, even though they share common amenities.

The first three statutes adopted the “deeds” system of registration (the Deeds System) while the latter three adopted the system of registration of titles (the Torrens Title System) – to some extent, this summary also illustrates the evolution of the land registration system in Kenya. The LTA, GLA, RTA, RLA and SPA have since been repealed and replaced with the 2012 Land Act and Land Registration Act, and the Sectional Properties Act, 2020 all of which adopted elements of the Torrens Title System.

It is worth noting that that while the implementation of the Land Act, 2012 and the Land Registration Act, 2012 brought significant changes to the land registration system in Kenya, the transition from the Deeds System to the Torrens Title System has been a gradual process, and elements of both the Deeds Systems and the Torrens Title System still coexist in practice.

·????????The Deeds System

Under this system, the recording of documents, otherwise referred to as “deeds,” is the primary method of establishing and transferring property ownership. The “deed” is a legal instrument that conveys or transfers property from one party to another, which depending on the land tenure, would either be a Deed of Conveyance or Deed of Assignment. A separate document or deed is used every time the land is dealt with, and once you prepare the conveyance or assignment, you would present the same at the relevant registry and the registrar would make entries in the form of abstracts.

The copying of such deeds and instruments in the register is merely evidential of the fact that those transactions occurred, so at best, you can rely on such abstracts as prima facie proof that the transaction did take place. However, such records do not prove title and/or the legitimacy of the transaction; therefore, the issue of title cannot be resolved based on that registration or record.

·????????The Torrens Title System

It was first adopted in South Australia at the instance of Sir Robert Torrens in 1857. This system is different from the Deeds System as it involves the registration of titles rather than deeds. A sale of land is effected by a registered transfer, upon which a title document is issued to the buyer in accordance with the terms of the governing statute. Over the years, the methods have been modernized but the principle remains the same. The title is indefeasible except in specified cases, and is guaranteed by statute. Therefore, if a deed of conveyance or assignment is made, it would merely be a contract between the parties.

Sir Robert Richard Torrens identified several problems in the Deeds System that prompted him to develop the Torrens Title System. Some of the key problems he identified were: (1) Complexity – as the Deeds System involved multiple deeds and documents that were often prone to errors, and (2) Inefficiency – particularly in the process of verifying land ownership as the Deeds System relied on the correctness of a long series of prior deeds, thereby, one would need to ensure that all deeds in the chain were good.

The changeover to the Torrens Title System relieved buyers of going behind the register to examine long, complicated deeds and dealing with owners who might withhold or lose their deeds or even try to commit fraud. It also created an indefeasible title, with certain exceptions, in the registered owner, as well as a simplified transfer of land process.

In Kenya, the Torrens Title System was introduced through the Registration of Titles Act to facilitate the process of land transfer through titles registration.

·????????Searches under the Deeds System versus the Torrens Title System

A search is a purposeful investigation of title in order to ascertain a right or interest in land as well as to check if there are any impediments or encumbrances affecting the title. A diligent buyer ought to carry out a search because of the caveat emptor (buyer beware) rule. In addition, the principle of?bona fide?purchaser for value without notice of defect applies where a search had been obtained.

There are different layers to investigation of title which can be covered in a separate article. However, the key differentiators I provided in my previous article are: (1) a registry search, and (2) an in-depth search. The difference lies in the level of detail and comprehensiveness of the information obtained. A registry search involves accessing the official land registry or registry of deeds to retrieve basic information about a property while an in-depth search goes beyond a simple registry search and typically involves conducting a comprehensive examination of the history of the property and potential issues that may impact the title.

Under the Deeds System, property searches involve delving into the historical chain of deeds, placing the responsibility on the buyer to carry out thorough investigations to ensure title validity and completeness, and to obtain a comprehensive understanding of the property's ownership history. This cumbersome property investigation under the Deeds System was one of the driving factors behind Sir Richard Torrens' proposal of the Torrens Title System, which emphasizes "title by registration" rather than "registration of title."

Under the Torrens Title System, when a property is registered for the first time, a government-issued title document is created, which serves as conclusive evidence of ownership save for the exceptions and circumstances where the ownership may be subject to challenge or defeasibility.?Therefore, ideally, a prospective buyer is not required to look beyond the record in the registry.

The difference in the two systems is that, what you get when you carry out a search under the Torrens Title System is the evidence of title while what you get in the Deeds System is a record of the various transactions and documents related to a particular property.

·????????Back to “Dina’s Title”

To the best of my knowledge, “Dina’s Title” was a property under the GLA land regime, and the property had not been converted to RTA or RLA in order to fall under the purview of the Torrens Title System or the concept of indefeasible titles. For this reason:

(a)?it is difficult to determine the direct relevance of the Torrens principle to this particular case of land fraud since under the GLA land regime, only deeds, not titles, are registered. As stated earlier, the deeds cannot prove title and therefore, the government does not guarantee title unlike in the Torrens Title System; and

(b)?the Supreme Court’s commentary as highlighted in the previous article does not surprise me, only that if I had the opportunity to edit, I would put it this way:

Given that “Dina’s Title” is recorded under the GLA land regime, a proper due diligence would require reviewing all the previous deeds and going to the root of the title.

In my view, the Dina Decision is not an emerging jurisprudence but a reminder of the level of scrutiny required under the Deeds System, just like Sir Richard Torrens had observed prior to introducing the system of title by registration.

·????????Conclusion

In summary, it is a long-standing understanding that a simple registry search is not sufficient for a thorough investigation of titles under the traditional Deeds System. A simple registry search in the Deeds System typically provides limited information, such as the current registered owner and any registered encumbrances. However, it may not provide a comprehensive view of the property's complete history or any potential defects in the title. To fully investigate and verify titles, additional research and examination of historical documents are often necessary in order to establish a clear and complete picture of a property's ownership history.

With that said, allow me to pose another question. Section 105(1)(c) of the LRA (transiting title documents) provides that if the title to the parcel is comprised in a register kept under the repealed Government Lands Act or the repealed Land Titles Act, the Registrar shall:

(i)???????????as soon as conveniently possible, cause the title to be examined;

(ii)??????????prepare a register, in the prescribed form, showing all subsisting particulars affecting the parcel which are capable of registration under the Land Registration Act, 2012;

(iii)????????serve on the proprietor and on the proprietor of any lease or charge, a notice of intention to register; and

(iv)????????issue to the proprietor, upon request, a certificate of title or certificate of lease in the prescribed form.

How challenging do you anticipate this procedure to be, on a scale of 1 to 10?

·????????Fun Fact

Australia has made significant contributions to international property law through two well acclaimed innovations:

??The Torrens Title System; and

??Sectional or strata titles.

Disclaimer: The information provided in this writeup is intended solely for the purpose of conversation and should not be considered as professional advice. Please also note that different circumstances or variables may require individualized analysis or expertise that is beyond the scope of this writeup.