Why a proposed sale of the South Australian Lands Titles Office?

The Treasurer recently revealed that a scoping study was in progress to privatise the Land Titles Office (LTO) operations.

The idea is not new, as commercial ownership operates the electronic land registration system for the Canadian province of Ontario.

So is the government‰Ûªs desire to privatise the LTO operations for a single cash grab and a reduction in public service numbers in return for a 20-year lease of ALL existing property documents, electronic data, survey plans, certificates of title and land sales information? This would also include the purchaser processing land divisions and the subsequent issuing of new certificates of title.

While the unique colonisation of South Australia enabled the orderly surveying of land boundaries prior to occupation, it became evident from missing land grants and increasing document forgery that legal costs to prove property ownership was escalating.

This resulted in Robert Torrens conceiving the certificate of title and the implementation of a world first Real Property Act 1886 (RPA) to facilitate the Torrens title system of land registration.

The objects of this Act are to simplify the title to land and to facilitate dealing therewith, and to secure indefeasibility of title to all registered proprietors.

The Real Property Act entertains three principles,

åá The certificate of title depicts all matters associated with the corresponding parcel of land.

åá Negates the costly legal proving of ownership at the time of a property transfer.

åá Provides for compensation through the state government assurance fund for loss caused by fraud or errors made by the Lands Titles Office

The RPA also states that;

åá The Lands Titles Registration Office shall be continued at Adelaide for the purposes of this Act.

åá The Registrar General(RG), the deputies of the Registrar General and the other officers are to be Public Service employees.

åá Every memorial entered in the Register Book shall be sealed with the seal of the RG.

While I understand that it is proposed that a sale is contingent on maintaining the current principle of Indefeasibility of title and the continuation of the assurance fund it still raises serious practical doubt.

Today‰Ûªs electronic technology allows data storage anywhere in the world so there is a concern over security of property data and that there will be no unauthorised ‰Û÷investigative use‰Ûª of the comprehensive data sets by hackers or non-public service staff.

Concern is also raised as to how the RG can issue a right to a non-government entity to apply a seal to documents that they produce and maintain. Alternatively if the RG subsequently proposes to seal work produced by a non-government entity, then surely both of these outcomes will negate the need to retain the government‰Ûªs assurance fund, which is a essential component of the Real property Act.

Permitting a non-government entity use of the RG‰Ûªs seal could result in registered proprietors and registered interests, such as mortgagees discovering they are no longer registered. Thereby adversely affecting the secure keystone principle of indefeasibility of title, currently accepted in land conveyancing by registered proprietors and those with registered interests.

Will mortgage lenders be satisfied that a sale of LTO operations to a private company will still guarantee indefeasibility of title? Or, will they demand landowners purchase title insurance in case of transaction errors or fraud?

The privatisation of water, sewer and electricity assets has not resulted in savings to the consumer.

The existing sale price of a certificate of title currently incorporates a $15 levy, to enable the LTO to develop the electronic land systems. If there is a sale what happens to the price of a title and to those accumulated levy funds?

Also potentially at stake from a sale of the LTO is the demise of the licensed surveyor and their statutory body, the self-funded Surveyors Board, responsible for the education, training and discipline of the licensed surveyor. All the aforementioned currently ensure the integrity of the land parcel boundary data used in the production of the certificate of title. Should risk management title insurance replace the government‰Ûªs assurance fund then button pushing technicians could replace the need for the licensing of surveyors.

This would again results in higher mortgage lending charges for the property owner who currently rely upon the integrity of the government guaranteed assurance fund, while also forcing property owners to insure their land title.
Those championing a sale of the LTO are aware that the Torrens Title system of land registration is the envy of the world and a potential gold mine, ripe for value adding products from the acquired data.

Given the LTO core operation is deemed a business of law and administration, the government must retain their unique LTO asset and invest in profitable value adding pursuits.

A sale of the LTO has the potential to cripple the principle of indefeasibility of title and return the current state of the art land title registration system to a state of the ark system at additional costs to the landowner.

RADU