By Kirthimala Gunasekera
The risk involved in the absence of consumer protection laws to protect owners was demonstrated in the US, when a New York newspaper prepared a forged deed to transfer the Empire State Building. The forged document was registered in 90 minutes, the land registry did not recognise that the 102-story Art Deco skyscraper was being sold to a new owner when the information in the deed was laughable
E-land registration will soon be operating the land registration system to secure ownership. However, it can be a source of ownership insecurity without consumer protection laws. As with the speed of registration, fraudsters will be at an advantage as shown in the demonstration conducted in the US, where it took only 90 minutes to register a forged deed.
The risk involved in the absence of consumer protection laws to protect owners was demonstrated in the US, when a New York newspaper prepared a forged deed to transfer the Empire State Building. The forged document was registered in 90 minutes, the land registry did not recognise that the 102-story Art Deco skyscraper was being sold to a new owner when the information in the deed was laughable: Original; ‘King Kong’ star Fay Wray listed as a witness to the deed and the notary’s name was a bank robber’s name Willie Sutton (nydailynews.com/news/money/90-minutes-daily-news-steal-empire-state-building-article-1.353477).
In modernisation and introduction of technology to land registries, consumer protection law takes a leading role in many countries. Professors of law have published many books on the subject.
It needs to be mentioned here that professional practice and land registry laws with steadfast and limitless laws and rules for identification of owners for consumer protection has been the reason for the success of e-registers in Australia, New Zealand, Singapore and the UK, where the law requires thorough identification checks and strict requirements for witnessing documents before the execution of transactions as given in this article.
In Sri Lanka, attention was not given to introduce the international laws that protect owners in an e-register, even when land fraud is extremely pervasive. However, we are fast moving to introduce technology to land registries.
The e-register commenced scanning the owners from an unreliable register that commenced in 1864.
Owners who have not checked the land registry after they had purchased lands or houses need to check their ownership status in land registries to be safe.
A quick fix solution scanning the names of owners from the unreliable old register which; 1) is a non-compulsory register – where all the ownership rights of land owners are not registered, 2) is torn mutilated as the register had not been revised since 1864, and 3) has fraudulent entries, according to the Registrar General, it has 50% forged deeds.
1. E-register copies from a non-compulsory register
The Registrar General in his letter dated 6 April 2016 to the Prime Minister’s office confirms that registration of deeds are not compulsory under the law governing registration. He explained in his letter that the old register is not a conclusive register where all rights of owners are registered. This means the e-register will be prepared from a non-comprehensive register that will not have all rights of owners, specifically rights to life interest, leasehold interest, servitudes agreements to sell, etc.
The solution is that it is important to immediately make a public announcement to all owners to register all their deeds and land rights such that their rights will be included in the e-register. If not, the e-register will exclude owners who have unregistered ownership deeds, gifts, life interest, leasehold interest, servitudes, agreements to sell, etc.
2. E-register copies from a torn mutilated register
Ownerships have been misplaced in the old register as the folios are damaged and mutilated since 1864. Even lawyers have found that they are helpless, their ownership had been misplaced, and the land registry informs in writing that folios are damaged. This means that only owners whose folios are not damaged will be included in the e-register.
The solution is that a public announcement is essential for owners to immediately make their application under Ordinance 18 of 1945 to reconstruct the damaged mutilated folios. The Registrar has power under the Ordinance 18 of 1945 to prepare and reconstruct the folios to reinstate the names of owners. This should have been done before scanning commenced to prepare the e-register.
3. E-register will record forged deeds
Are we only admiring the glory of technology as a duck gliding on water without seeing the paddling underneath? It needs mention here that all countries where the e-register is a success has enacted consumer protection laws in Australia, New Zealand, Singapore and UK. The registrars have quasi-judicial powers to check owners’ identity before removing and replacing owners in the e-register, the Registrar has the full power and authority to reject forged invalid deeds.
In Sri Lanka, the register has no such authority. The present law is that the Registrar is not responsible for the validity of deeds that are registered (Section 7 of the Registration of Documents Ordinance). Therefore, the owners registered have very little protection as a forged deed can easily replace their ownership.
According to the Registrar General, the old register from which the e-register is scanning owners has 50% forged deeds (newsfirst.lk/2019/03/17/50-of-land-deeds-in-sri-lanka-forged-registrar-general/).
Consumer protection law recognised internationally protects land owners and buyers from forged registrations. The methods are as follows.
1. Block chain method (very popular) – The technology involves creating a digital verification recording system or a digital file. Fingerprints of owners in a pedigree are saved together in groups into a block and then to a chain in registries. It is impossible to add new information fraudulently to the chain of title of an owner. The chain’s ability to secure data and history of land title is very efficient to prevent fraud.
2. UK – Property Alert service to owners’ mobiles; to receive updates whenever someone makes a search on their property’s title or attempts to make a change to its registration.
3. US – A solution which is well suited to the modern digital age has been created by the introduction of Electronic Notary Journal of Official Acts (‘Enjoa’) by the National Notary Association (NNA) USA. They have incorporated biometric technology into its new electronic identity-capturing database to provide secure and convenient electronic protection for documents and notaries. Enjoa captures the thumbprints and digital photos of the owners.
4. Malaysia – Increasing cases of land fraud in Malaysia triggered an initiative to seek responsible solutions to resolve the issue. The Government designed an electronic land administration system called e-Tanah in which the land registry embarked on a security system to prevent land fraud by affixing the thumb impressions of owners in addition to signatures. This system requires the owner of the property to physically present himself with his Mykad (ID card) and to place both thumbs on the biometric appliance available in the land office in order to verify his ownership. The biometric confirmation letter must be enclosed together with the instrument of transfer for registration in land registries.
5. Bhoomi Project in India – A similar biometric system has been introduced in India for the identification of owners. Bhoomi has computerised 20 million records of land ownership of 6.7 million farmers. A farmer can check the status of their deeds being registered or tampered with on a touchscreen by getting authenticated access with his fingerprint, using biometric fingerprint scanners available in computer kiosks.
6. Manipur – ‘Loucha Pathap’ which means “rules governing the land” was inaugurated on 2 July 2004. Loucha Pathap is the application software, indigenously developed by the National Informatics Center, Manipur for the purpose of the computerisation of land records. Through the use of the device the software and its content owners are protected against theft.
7. Australia – As in all countries, e-registration commenced in Australia with consumer protection laws and organisations to manage the laws. Australian Registrars National Electronic Conveyancing Council (ARNECO) introduced model participation rules on 18 March 2014. Property Exchange Australia (PEXA) will remove the manual processes and paperwork associated with the exchange of property by allowing land registries, financial institutions and practitioners in an integrated system of transacting online. PEXA is aimed at providing benefits across the entire conveyancing industry, some of which include transparency so all parties can see completed stages of the settlement process and those which may be outstanding, and early fraud identification so lenders can identify any potential fraud early in the process.
It was the intention of the Government with the advice of the World Bank to introduce a comprehensive register called the Bim Saviya register to register owners of 12 million blocks of land which covers all owners, government and private owners, before the commencement of the e-register. However, without local legal consultation, the entire project failed.
Reasons for the failure after 20 years is highlighted in the Performance Report of 2019. The report states clearly that it will take over 100 years to complete the Bim Saviya register (parliament.lk/uploads/documents/paperspresented/performance-report-land-title-settlement-department-2019.pdf).
The law of Bim Saviya is unsuitable for our country as the owners’ right to access court if the lands are affected by forgery or fraud have been taken away by this law. In lieu, the Government has agreed to compensate owners from an Assurance Fund.
(The writer is a senior lawyer.)