In Australia the ownership of real estate is held by a system known as the Torrens title system and is the worlds most secure and reliable instrument of owning real estate.
The Torrens title system was created by Sir Robert Torrens in 1858. This system of land ownership is responsible for the current method of recording and registering land ownership in Australia that is he Australian Government guaranteed. The Australian Torrens property ownership legal instrument has been adopted across the world. England and Wales, Ireland, Malaysia, Singapore and Canada are just some of the countries that now use the secure Australian Torrens title of land system.
The Torrens title system works on three principles. The Government Register where all land titles are kept accurately records every aspect about the current ownership and interests about a person’s land. Because the land titles Register contains all the information about the person’s land, it means that ownership and other interests do not have to be proven by long complicated documents, such as title deeds.
Australia Real Estate Ownership - Torrens System
What did Australia have before the Torrens system?
Before the Torrens system was introduced, there was a ‘General law title’ system. The General law title system consisted of a “chain” of title deeds all of which had to be in place to enable a property to be transferred.
Title deeds are documents that show ownership, as well as rights, obligations, or mortgages on a property. A General Law title could have many deeds, many of which were handwritten.
Importantly, the Government guarantees the system and will provide compensation to any person who suffers loss of land or an interest registered under the Torrens System.
The ownership of land could be made up of 20-30 different documents , each one referring to the other and following on from the previous.
The problem was that often a “piece of the chain” would go missing. The General law title system depended on proof of an unbroken chain of deeds back to the original grant.
Thankfully, Torrens created a new central registry where all transfers of land are recorded in the register, creating a single title with a unique number that also records easements, mortgages and discharges of mortgage.
What does Torrens mean for for overseas real estate investors?When you buy your investment property in Australia, the seller will own the land and their name will still be on the title. When you pay for the property at the settlement, your lawyer acting for you will hand over the money in return for getting a Transfer of land document.
That document states that the seller agrees to transfer the apartment to you. Your lawyer will then lodge that document with the government land registry where the Torrens Title will have your name put on it.
With the assistance of an Australian lawyer your Title ownership is registered on the Government central registry.