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Title Registration

Background

Introduction


  • The present land registration system in Hong Kong is a deeds registration system governed by the Land Registration Ordinance (Cap. 128) (“LRO”). It governs the priority of registered instruments but gives no guarantee of title to the property. Registration of an instrument under the LRO does not confer any validity on the instrument. Therefore, even if a person is registered in the land register as owner of a property, he may not be the legal owner because there may be uncertainty or defect in his title to the property or his title may be subject to the claim of some other person which does not appear on the land register kept by the Land Registry (“LR”). The uncertainty of title may put purchasers at risk, cause confusion to the public and reduce the commercial potential of properties in some cases. Hence, in each and every case, it is necessary to check all the title documents affecting the property that are required to be produced as proof of title pursuant to the Conveyancing and Property Ordinance (Cap. 219).
  • As opposed to a land register kept under a deeds registration system, the title register (“Title Register”) kept under a title registration system is conclusive evidence of the title to the property. The registration of a person as owner of a property in the Title Register shall vest the title to the property in him. The purchaser is not required to look behind the Title Register and check the historical title documents concerning the property to establish title. Hence, a title registration system can provide better assurance and greater certainty of title as well as simplify the conveyancing procedures.
 
Benefits of Title Registration
  • The key benefits of a title registration system are:

    • Certainty of title

      The Title Register is conclusive evidence of the title to registered properties. A bona fide purchaser who has paid valuable consideration and is in possession of the property is entitled to indefeasible title upon registration as owner.

    • Provision of indemnity

      Indemnity, subject to a cap, is available to persons who suffer loss due to property fraud that causes an entry being made in, or removed or omitted from the Title Register and results in the loss of ownership.

    • Simplified conveyancing procedures

      In general, except for overriding interests (i.e. interests that affect the property notwithstanding that they are not registered, e.g. public rights and leases[1] for a term not exceeding 3 years), title is only subject to registered matters shown on the Title Register. A purchaser is not required to look behind the Title Register and check the historical title documents concerning the property to establish title.



[1] Where the lessee is to take possession of the property forthwith under the lease at the best rent without a premium.

Legislative History
  • In 1988, the then Registrar General (former Land Registrar) set up a working party (comprising practising solicitors from prominent conveyancing law firms and representatives of the Faculty of Law of the University of Hong Kong) to examine the introduction of a title registration system for Hong Kong, drawing on the experience of the land registration systems operating in comparable overseas jurisdictions. The objective was to improve the efficiency and security of the land registration system of Hong Kong so that it would better serve the public and professionals engaged in property-related businesses. A number of stakeholders including the Law Society of Hong Kong (“Law Society”) and the Hong Kong Bar Association were consulted on the proposal. The first Land Titles Bill was introduced into the Legislative Council (“LegCo”) in November 1994 but the scrutiny work was not completed within the legislative term. Accordingly, the Bill lapsed at the end of the legislative term in July 1995.
  • After the lapse of the Land Titles Bill in July 1995, the LR maintained dialogue with the Law Society and, in consultation with other key stakeholders, reviewed and revised various elements of the Bill. A revised Land Titles Bill was introduced into the LegCo in December 2002 and passed on 7 July 2004. The enacted Land Titles Ordinance (Cap. 585) (“LTO”) was gazetted on 23 July 2004.
Post-enactment Review and Preparation for Title Registration
  • At the request of the LegCo, the Government undertook to conduct a comprehensive review of the LTO before its commencement, and to take follow-up actions on various issues raised during the scrutiny of the Bill. Since the enactment of the LTO, the LR has, in consultation with the key stakeholders, carried out a comprehensive review of the LTO for the implementation of the title registration system. Throughout the years, various proposals have been put forward to address stakeholders’ divergent views over the main issues including the mechanism for bringing existing land and properties to which the LRO applies under the LTO (i.e. conversion mechanism) and the rectification and indemnity arrangements. The LR has been making continuous efforts in engaging the key stakeholders, bridging their different expectations and addressing their concerns on implementing the title registration system. As there are still outstanding issues on the conversion mechanism, for the sake of achieving early implementation of the title registration system with the benefits that it will bring, the LR is actively pursuing the proposal of implementing title registration on new land first (i.e. land granted by the Government after the commencement of the LTO) (““new land first” proposal”) and has secured support in principle for the proposal from the key stakeholders.
Way Forward
  • The LR will continue to liaise closely with the key stakeholders to address their concerns and reach consensus on the major issues and proposed amendments to the LTO for implementing title registration under the “new land first” proposal. After that, a Land Titles (Amendment) Bill incorporating the proposed amendments will be submitted to the LegCo for scrutiny.