I move that the Bill be now read a Second Time.
This is a Bill to amend and consolidate the law relating to the registration of title to land. Its main purpose is to provide for the extension of compulsory registration to all land in the State, including mines and minerals and incorporeal hereditaments.Provision is also made for certain amendments of the substantive law relating to registration and for the introduction of various changes in registration procedure. Accompanying the Bill is a very full explanatory memorandum which I trust Deputies will find helpful. Explanatory side notes have been inserted in the Bill itself showing the provisions which are new to the law and the existing statutory enactments which are being consolidated.In view of the information thus furnished I do not think it is necessary for me to go into any great detail on the individual provisions of the Bill and I propose, therefore, to confine myself to a general elaboration of the principles involved.
We have in this country two separate and virtually exclusive systems for recording transactions in relation to land—the system of registration of deeds operated by the Registry of Deeds and the system of registration of title which is operated by the Land Registry. The former system, which was established by an Act of Queen Anne passed in 1707, provides for the registration of all deeds and conveyances affecting land and renders unregistered deeds fraudulent and void against registered ones. The practical effect of this is that a search in the Registry of Deeds will disclose the existence of certain classes of dealings with land, thus facilitating the deduction of title by private investigation.A purchaser may use the system to inform himself of such dealings, with the assurance that all dealings of the same class which are not recorded in the Registry will be treated as fraudulent and void unless he has actual notice of them. The system does not relieve the purchaser from the labour and expense of examining the deeds and documents which constitutes the title or from the risk of misinterpreting their legal effect. It affords him no assistance in respect of dispositions made by will or arising under an intestacy. And, what is of more immediate practical importance, an equitable mortgage by deposit of title deeds, without writing, is unaffected by the Act of 1707 and takes priority over a registered deed. This is because the Act is concerned exclusively with the priority of instruments inter se. This type of mortgage is a common and useful form of transaction in this country and the fact of its being outside the scope of the Registry of Deeds represents a major defect in the system.
Registration of title is a system of State registration of ownership of land whereby all relevant particulars concerning the land and its ownership are entered on special registers maintained in the Land Registry. Those registers are kept in the form of a book or folio in three parts; the first part gives a description of the property, the location, acreage, mapping references and so on; the second part contains details of the ownership; and the third part shows the burdens, if any, affecting the property. In conjunction with the registers there are maintained registry maps on which plans are drawn of each parcel of land of which the ownership is registered. The identity of any registered land is established from the particulars in the register and the plan on the relevant registry map. Each new transaction affecting the land is notified to the Land Registry and the appropriate alterations in, or additions to, the register are made. A purchaser for value from the registered owner gets exactly what is entered on the register, namely, the title to the land, subject only to the defects and limitations, if any, noted on the register. The title shown on the register is guaranteed by the State, which is bound to indemnify any person who suffers loss through a mistake made by the Registry. A land certificate may be obtained by the registered owner on application and this document constitutes proof of his ownership of the land. It replaces the old documents of title, but, unlike the latter, is clear and simple and may be easily understood by lay persons.
The system of registration of title has been operating in this country since 1892. When, during the second half of the nineteenth century, the Land Purchase Acts were enacted and tenant occupiers began to buy out the interest of the landlords in their holdings, it became clear that a cheap, simple and effective system of recording transactions in land was needed if the titles of the new proprietors were not to become involved in inextricable confusion. The system of registration of deeds was unsuitable and inadequate for the purpose. What was needed was a system whereby the ownership could at any time be ascertained in an expeditious and satisfactory manner, and registration of title admirably fulfilled this need.
The Registration of Title Act, 1891, established the Land Registry and made registration of title compulsory in the case of all land bought out under the Land Purchase Acts. The system has been operating very successfully ever since and it is estimated that approximately 80 per cent of all land in the State—chiefly rural land—is now registered. In the main, only urban land remains subject to the system of registration of deeds. Provision was made in the Act of 1891 for the voluntary registration of title to land but the facilities of the law in this respect have not been availed of to any marked extent. As a means of recording and facilitating dealings in land, registration of title is vastly superior to registration of deeds. The position of a purchaser under the two systems may be likened to that of a schoolboy who is faced with solving a difficult mathematical problem. In the one case, he finds, so to speak, that the sum is worked out for him and the correctness of the answer guaranteed. In the other, he is provided with some of, but not necessarily all, the clues as to how he should tackle the problem and then has to go and work it out for himself, with no guarantee that he will get the right answer. A register of title tells plainly who is the owner of the land and what are the charges affecting it.
The Registry of Deeds, on the other hand, can do no more than disclose certain individual dealings the investigation of which will be necessary for the purpose of deducing the title to the land. Registration of title abolishes the inconclusive, expensive and repeated examination of title by private individuals and substitutes one final and authoritative examination by the Land Registry. It removes the possibility of fraud by duplication or suppression of deeds and also the possibility of bona fide mistakes as to past title or existing burdens affecting land. On first registration, many defects of title which are the subject of tiresome, recurrent inquiries are permanently cured.
Registration of title is in essence a system of simplified conveyancing. One of its biggest advantages is that the forms used for sales, mortgages and other dealings are readily intelligible to the layman. The transfer of land becomes, as it should be, a painless, simple and inexpensive process. A vendor can enter into a contract immediately and unreservedly. The matter need not be delayed while his legal advisers ascertain the state of the title. A purchaser can at once safely accept the title offered and there is no need for the specific provisions relating to title that are usually contained in contracts for the sale of unregistered land. As the work involved is considerably simplified, conveyancing costs are reduced. Above all, the system provides State-guaranteed security which private conveyancing by deeds can never give.
From the point of view of Government, one of the great merits of registration of title is the invaluable assistance that it can afford, both to central and local authorities, in providing a definite basis for taxation and valuation, in the operation of a sound system of agricultural credit facilities or facilities for the provision and repair of houses, and in such matters as the administration of planning legislation.
Encouragement of registration of title is, therefore, a sound administrative policy. Indeed, the advantages of registration of title are widely recognised throughout the world and the system is well established in many European countries, including Germany, Switzerland, Austria and Hungary, as well as in Australia, New Zealand, most of Canada and many of the States of the American Union. Inquiries indicate that the system has been operating satisfactorily in all these countries, in some cases for a very considerable time. The system is in course of establishment in England and Wales and is becoming widely accepted there as cheaper and more efficient than unregistered conveyancing.Its introduction in Scotland has recently been recommended by the Reid Committee, who were appointed by the Secretary of State for Scotland to consider the merits of the system.
The system of registration of title at present operating in this country is essentially sound, and any shortcomings that have manifested themselves over the years are matters of detail that can be remedied by the adoption of the proposals contained in the Bill. I am completely satisfied that the merits of the system are such as to warrant its extension to all land in the State. Unfortunately, experience here and in Britain shows that a system of voluntary registration will not succeed. One reason for this is that landowners are reluctant to incur the initial expense and possible risk of submitting their title for investigation. It has also been argued that the conservatism of some members of the legal profession tends to prevent them from adopting the system on behalf of their clients.
The only way, therefore, in which registration of title can be extended to all land is by compulsion and, accordingly, provision is made in Part III of the Bill for the gradual extension of compulsory registration to all land. In the main, the property affected by this proposal will be that comprised in urban areas. I envisage that, ultimately, although not for some time, the system of registration of title will completely replace the system of registration of deeds and result in the closing of the Registry of Deeds.
The principal new machinery for the extension of compulsory registration is contained in sections 24 and 25 of the Bill. Section 24 provides that the Minister for Justice may make orders applying compulsory registration to individual counties or county boroughs or parts thereof. In an area in respect of which such an order is in force registration will be compulsory on the occasion of any conveyance on sale of freehold land or grant or assignment on sale of a leasehold interest. To ensure ample warning for all who may be affected, the operative date for an order will have to be not earlier than six months after the making of the order. Section 25 provides the sanction for the enforcement of compulsory registration. The effect of the section will be that, in any case in which registration becomes compulsory, a conveyance on sale or grant or assignment on sale will not vest the estate or interest purported to be conveyed, granted or assigned unless, within three months, the purchaser becomes registered as owner. This period may be extended by the Registrar or the court where circumstances warrant.
One advantage of introducing compulsory registration following a sale is that the title to the land will have been examined by the purchaser's solicitor and the documents of title will be available. The investigation of the title by the Land Registry will thereby be greatly facilitated. Another advantage is that applications for first registration will be kept to manageable proportions.Quite obviously, the rate at which compulsory registration can be extended will be limited by the capacity of the Land Registry to handle new registrations and it will be necessary to proceed cautiously in the initial stages so as not to overburden the system.
Provision is made in section 23 of the Bill for compulsory registration of all land acquired after the commencement of the proposed Act by Government Departments, State-sponsored bodies and local authorities. This provision will apply irrespective of whether the land is situated in a compulsory registration area. I consider that it is only fitting that public bodies should set a headline for private landowners by helping to extend the system of registration of title as rapidly as possible to all land in the State.
Existing procedure for the registration of urban property, that is to say, voluntary registration, provides only for registration of ownership with an absolute, or good, title. While it may be anticipated that in the majority of applications for first registration under the new compulsory provisions, the owners will be able to show a good title to their property, it is inevitable that some doubtful or defective titles will occur, the registration of which with an absolute title would prove difficult and troublesome if not impossible.
To enable titles of this kind to be registered in compulsory areas without undue difficulty or delay, it will be necessary to amend existing registration procedure so as to provide for the registration of ownership with qualified or possessory titles. Suitable provisions to this effect are contained in sections 33 and 40 of the Bill, which relate, respectively, to freehold land and leasehold interests. These provisions will enable a qualified title to be given where it appears to the Registrar that the title can be established only for a limited period or subject to certain reservations.
Where neither an absolute nor a qualified title can be given, the Registrar will be able to give a possessory title on the basis of such evidence as may be prescribed. As the name implies, a possessory title will be dependent upon actual occupation of the land, or upon receipt of the rents and profits issuing out of the land, and not necessarily upon a documentary title. Registration with a possessory title will not prejudice the enforcement of any rights subsisting or capable of arising at the time of registration and, that being so, a purchaser will have to investigate the title prior to registration in the same manner as if the land were unregistered. Registration with a qualified title will not prejudice the enforcement of rights specifically noted on the register as excepted from the effects of registration.
In the case of leasehold land it is proposed that registration may also be effected with a good leasehold title. This would be appropriate where the title of the lessee to the leasehold, as distinct from the title of the lessor to the freehold, is sound and can be approved by the Registrar. The precise effect of registration with each class of title is indicated in sections 37 to 39 and 44 to 47.
It is, of course, the aim that, in due course, all titles on the registers should be absolute ones, and machinery is, therefore, provided in section 50 for the conversion of qualified and possessory titles into absolute or good leasehold titles and for the conversion of good leasehold titles into absolute titles. The process of conversion may be carried out either in consequence of the production of additional evidence as to the title, or as a result of the lapse of time, or both. The Registrar is to be given a general power to convert where he is satisfied as to the title. In addition, in the case of urban land registered with a possessory title, there will, after 15 years, be automatic conversion of the title on the registration of a transfer or other disposition for value. The period of 15 years is selected as an adequate and appropriate period within which third parties may substantiate claims or by the expiration of which defects in title may be deemed to be cured. By comparison, the ordinary limitation period for actions to recover land is 12 years.
In the case of land bought out under the Land Purchase Acts, that is to say, most rural land, special arrangements are provided in section 50 to expedite the elimination from the registers of the notices of equities to which the bulk of such land is subject. I should perhaps explain, for the benefit of Deputies who are not familiar with the subject, that land bought out under the Land Purchase Acts is registered subject to equities because, owing to the large number of transactions under the Acts, the Land Commission cannot and do not examine the title of a purchaser to his previous tenant interest in the land. Instead, the fee simple vested in him by the Commission is deemed to be a graft on his previous interest and he is registered "subject to equities", that is to say, subject to the rights of any other persons having claims against this previous interest. Existing law provides for the cancellation of the notice of equities on application by the registered owner, but the number of cancellations effected annually is relatively small and it is estimated that about threequarters of all existing registered holdings are subject to equities. Indeed, this is one of the main shortcomings in our present system of registration of title, as the existence of the notice of equities throws on persons dealing with the registered owner the onus of investigating the title prior to first registration.
I consider it desirable, even essential, for the satisfactory operation of the system, that equities should be cleared from the registers as quickly as possible.From an administrative point of view, the ideal solution would be the completely automatic cancellation of all equity notices in cases where the land has been registered for, say 30 years, which is the extended limitation period for actions to recover land in cases of disability. I have carefully considered the possibility of adopting such a solution but reluctantly decided to reject the idea on the grounds that it could lead to injustice, and even serious injustice, in many cases. For example, the person whose ownership is registered subject to equities may be a tenant for life under a settlement. The interest of the remainderman in such a case is protected by the equity notice, and automatic cancellation of the notice would mean that he would be deprived of his lawful property. The equity notice may also cover restrictive covenants created before first registration, such as covenants against objectionable trades in a residential area. These covenants operate for the benefit of other property in the district. If the equity notice were automatically cancelled, a purchaser would not be bound by the covenants and would be able adversely to affect the property rights of his neighbours. On full consideration, therefore, I thought it better not to provide for absolutely automatic cancellation.
In my view, the best alternative way of dealing with the problem is that proposed in subsection (3) of section 50 of the Bill. Briefly, what that subsection provides is that there should be semi-automatic cancellation, at the discretion of the Registrar, in two types of cases; first, on the occasion of a change of ownership or the creation of a charge where the land has been registered for more than 30 years, and, secondly, on the occasion of a transfer or charge for value where there has been a previous registered transfer for value more than 12 years before. In the first case, the period of 30 years is selected because, as I have said, it is the maximum limitation period for actions to recover land, being the period applicable in the case of disability.The second type of case is so devised as to ensure that the title will have undergone two careful and independent scrutinies, separated by a period adequate, in the ordinary course, to cure any latent defects.
It is envisaged that, under these proposals, cancellation of the equity notice will be virtually automatic in the great majority of cases, while, at the same time, the Registrar will have discretion to leave the notice undischarged in the exceptional case where it appears to him that cancellation would cause injustice to a third party. I believe that these provisions will represent a considerable improvement in the present law and that they will result in a steady and significant reduction in the number of equity notices.
In addition to establishing machinery for the extension of compulsory registration, Part III of the Bill provides for various amendments of registration procedure and of the substantive law relating to registration. The object of these amendments is to cure defects, which, over the years, have manifested themselves in the existing law and generally to improve the system of registration of title so as to enable it to cope with the conditions expected to be encountered in registering urban property. The proposed amendments, are, for the most part, technical in character and do not involve any substantial matters of principle. I propose, therefore, to refer very briefly only to a few of the more important ones.
Section 49 relates to the acquisition of registered land by adverse possession against the registered owner and proposes to give the Registrar the power to register a squatter as owner without a court order declaring his title. I consider that there is no good reason why persons who have acquired a title to registered land by adverse possession should be forced to incur the trouble and expense of applying to the court for an order declaring their title. Under existing law, cases based on adverse possession are regularly dealt with and decided by the Registrar on applications for first registration and for the discharge of equities and where the personal representatives of a deceased registered owner claims to have acquired by possession the shares of the other next-of-kin. In effect, section 49 proposes that what are at present known as "section 52" applications will in future be made to the Registrar and thus dealt with in the same manner as the other cases of adverse possession to which I have referred.
Paragraph (b) of subsection (3) of section 61 proposes to relieve the Registrar of the responsibility of ensuring that the personal representatives of a deceased registered owner are acting correctly and within their powers under an assent or transfer. At present, on the production of an assent or transfer from the personal representative it is the practice of the Registrar to examine the will of the deceased in order to satisfy himself that its terms are being properly interpreted and implemented. If the owner died intestate the Registrar similarly satisfies himself that the rules of intestate succession are being observed.
I consider that it is not appropriate that the Registrar should have any responsibility for ensuring that the personal representatives are acting correctly in such cases. His position vis-à-vis personal representatives should be the same as that of a purchaser.A purchaser from personal representatives is not concerned with the terms of the will of the deceased or the observance of the rules of intestate succession but is entitled to assume that the personal representatives are acting correctly in selling the property of the deceased. It is no part of the duty of the Registrar to supervise the administration of estates; and if a disposition of registered land is made which is not in accordance with the terms of the will or the rules of intestacy the responsibility must be solely that of the personal representatives.
Section 81 provides that a right of residence in or on registered land, whether a general right of residence on the land or an exclusive right of residence in or on part of the land, shall be deemed to be personal. This provision is designed to cure the anomalous situation resulting from a majority decision of the Supreme Court in the case of the National Bank v. Keegan [1931] I.R. 344, in which it was held that an exclusive right of residence, such as a right to the exclusive use of a particular room or rooms in a dwelling house, conveyed an equitable life estate in the property, entitling the grantee, for example, to let the rooms to strangers. In the vast majority of cases this would be quite contrary to the intentions of the parties.
The accuracy of registered titles will continue to be guaranteed by the State. Thus, section 118 of the Bill provides for the payment of compensation by the State in respect of loss incurred by registered owners and others as a result of official errors in registration. Paragraph (e) of subsection (1) of this section is a new provision and provides that a person who suffers loss by reason of the inaccuracy of any office copies of a register or registry map, or of documents or plans filed in the Land Registry, shall also be entitled to compensation.
Part IV of the Bill deals with the devolution of registered land on the death of the registered owner and the rules of beneficial succession to such land where the registered owner dies intestate. The provisions of this Part are mainly for the purpose of consolidation. In relation to succession on intestacy, however, an important change is proposed in section 109 which provides that all registered land shall descend as personalty to the next-of-kin.This will chiefly affect freehold land in urban areas when it becomes registered under the new compulsory provisions. Instead of, as at present, descending as realty to the heir at law, it will, under the new proposals, be distributed amongst the next-of-kin.Existing compulsorily registered land already descends in this manner. I may say that Ireland is among the last of the countries of the Western hemisphere to maintain any vestige of the old feudal system of descent to the heir. The system has been abolished in the Six Counties, in Britain and in the United States. I have recently obtained the approval of the Government for a scheme for a comprehensive Administration of Estates and Wills Bill which will inter alia, provide for the complete assimilation in this country of the law respecting real and personal property, so that all realty, whether registered or unregistered, will devolve and be distributed as personalty. In the meantime, I am proposing that the change should be effected under this Bill as respects all registered land.
So much for the provisions of the Bill itself. I should like to refer now, for a moment, to the organisation which will be responsible for administering the provisions of the new legislation, namely, the Land Registry. To enable the Registry to cope with the additional work which will arise as a result of the extension of compulsory registration it will be necessary to augment the existing staff—legal, mapping and clerical—in the central office and to provide additional accommodation. Plans for this purpose are already in hand.
It is unfortunately true that, in the past, transactions in the Land Registry have tended to be subject to delays— in many instances very considerable and, I have no doubt, very frustrating delays. I want to emphasise, however, that these delays have been due to shortage of staff and other administrative factors and not to any defect in the system of registration of title. It must, of course, be appreciated that registration of a title in the Land Registry can never be effected as expeditiously as the registration of a deed in the Registry of Deeds. In the one case an examination and investigation of title has to be carried out by the Registry staff; in the other, all that is involved is the filing of a document. Nevertheless, I am very conscious of the fact that an improvement in administration in the Land Registry is essential, and I have already had arrangements put in hand to have the staffing and accommodation problems effectively dealt with.
Indeed, I am glad to be able to say that, as a result of improvements carried out within the past 12 months or so, there has been an appreciable reduction in the length of time taken to handle registration business. I can assure the House that I will not be content until the Registry is operating at maximum efficiency and an expeditious service is being provided throughout the full range of the Registry's activities. It is my intention to ensure also that the organisation of the Registry will be brought up to and maintained at a pitch adequate to enable it to cope with the increased volume of business anticipated as a result of the extension of compulsory registration.
The bulk of the cost of operating the Land Registry is at present recoverable in the form of registration fees and the net charge on public funds is not significant. The existing policy of, so far as possible, fixing Land Registry fees at such a level as to make the Registry self-supporting will be continued under the new legislation and, indeed, this policy finds expression in Section 14 of the Bill.
It is sometimes suggested that the fees are unreasonable and excessive. This criticism is, in my opinion, completely unfounded, as the following example chosen at random will serve to show. In the case of a typical suburban dwelling-house the market value of which is, say, £3,000 and in respect of which the poor law valuation is, let us suppose, £30, the fee on first registration in the Land Registry would be £4 5s. 0d. On a subsequent registered transfer on sale the fee would be £12 6s. 0d. I think most Deputies will agree that by no stretch of the imagination can either of these fees be said to be excessive, either in relation to the value of the property or having regard to the advantages accruing to the parties from the registration of the title.
It should be remembered, also, that registration fees constitute only one of the items going to make up the costs and outlay involved in the transfer of property and that, when account is taken of legal fees, the total cost of transferring registered property— assuming the title to be an absolute or good one—is appreciably lower than in the case of unregistered property. In the case of the house mentioned in the example which I have already given the total costs involved in the transfer on sale, that is to say, the combined costs of the vendor and purchaser, would be of the order of £202 if the property were registered as compared with £266 if unregistered.
I am satisfied that if the legislative proposals embodied in this Bill are adopted they will constitute a farreaching and valuable reform. In those areas of Britain in which compulsory registration has been introduced — about one quarter of the country — it has been operating satisfactorily; and there is no reason to doubt that a system that has already proved itself in our own country over the past seventy years can be extended successfully here also. The late Mr. Justice Madden, who was the author and sponsor of the Act of 1891, once stated that "in order that any system of registration of title should be efficient and successful...it must be compulsory, not optional". Land is vital to the needs of society and to the economic activity of the nation. It is essential, therefore, that titles to land should be clear and certain and that land should be capable of being transferred in a cheap, simple and secure manner. What this Bill proposes to do is to extend to the whole country the system which has proved itself superior for all these purposes, namely, registration of title.
The Bill is, in many respects, a technical and difficult one and it is for that reason that I decided to issue a longer and more detailed explanatory memorandum than is usually called for in the case of Bills coming before the House. Of its very nature the measure is one which is more suitable for discussion on Committee Stage, and on that Stage I will, of course, endeavour to furnish any additional assistance which the House may need in dealing in detail with the various provisions. I may add that I shall welcome and give careful consideration to any suggestions for the improvement of this Bill.
I recommend the Bill to the House and ask that it be given a Second Reading.
