Computerization of Deeds, what land owners should know

Kirthimala Gunasekera Attorney-at-Law

International economists have advised all developing countries to formalize land rights to encourage investors. Their aim is to improve the quality, safety and speed of transactions relating to sale and mortgage of lands.

A revolutionary concept to stabilize land rights to reach prosperity has been taken up by the United Nations to be included in the Millennium Development Goal Agreement signed in 2000 by all nations including Sri Lanka to reach prosperity in the year 2015.

Following this advice, the World Bank had introduced technology and a new registration law to stabilize land rights under the name of Bim Saviya http://bimsaviya.landmin.gov.lk/. to Sri Lanka.

The law has come into operation under the Act No 21 of 1998. The new system is expected to make all lands readily acceptable to banks, without lengthy searches required for transactions. The electronic services will enable professional conveyancers and mortgage lenders to submit applications and reports online in the future.

Currently access to title information can be made at the computer terminals of several land registries in Sri Lanka including Nugegoda and Homagama.

The operation will soon be extended to Colombo.

Owners will be granted a certificate which is a simple computer print out, known as the Himikam Sahathikaya in lieu of their deeds.

Computerization process is described below for readers to understand.

Manual registers will be replaced by computers - The entries in computers will furnish all necessary information about the present owner and the land and other information such as owner’s rights, encumbrances, express conditions, caveats.

New system for plans - All private lands will be resurveyed by the Survey Department and digital maps will be issued to owners. All parcels or blocks of land with road accesses of a given area will be on a plan called a Cadastral map and will be registered in the land registry.

Blocks of land of owners will be digitally registered under the owners title. The block or parcel of land will be given a unique 12 digit number which indicates the district, village and block parcel. Number is important and will be the unique identifier for each land. It could be considered as your pin number for the future.

Deeds will be replaced with signing of regulated forms prescribed by the new law.

Once the forms are lodged by a notary the certificate similar to a Crown Grant called the Himikam Sahathikaya [HS] will be issued to the owner. The land title is guaranteed by the government and the previous owners defects will not be transferred to new owners. Only Notaries could provide legal advice on the preparation or content of Land Registry forms.

The HS issued by the Lands Registrar operates much like a car title, listing the name of the owner with leases, mortgages and other encumbrances. As such Himikam Sahathikaya will be issued for Transfers and Gifts, all other transactions such as mortgages leases agreements will be subordinate and they will have no paper documents.

They will be endorsed on the HS as encumbrances.

The contents of the new deed is simple, it will have only the 1] Name of the owner 2] Name of the land with the 12 digit number. 3] The drawing of the digital plan.

The First Registration is the term given to the process where deeds will be replaced with Himikam Sahathikayas for the first time for all owners of land. The age old bound paper records and deeds of owners will be eliminated after the computer lodgments or the First Registration.

The rights mortgagees, lessees and other interest holders such as those with agreements to sell will be included in to the computers provided they are duly registered in the correct bound volumes and folios in the existing registers.

First Registration is a process of copying the title from the existing registers to computers. It is important to be present in the country, to ensure correct and accurate lodgments of land ownership, agreements, leases and all other interests to lands especially if the land is a bare land and is not occupied.

It is advisable for owners to check the accuracy of the existing registers, connect folios, adjust damaged folios and register all the unregistered rights to land as the computer entries begin where the manual register ends.

There are 13 Government offices at the moment in several districts to carry out the First Registration process, they operate under the Title Settlement Commissioner.

The officials will collect information from each land owner after due notice. Further enquiries from http://bimsaviya.landmin.gov.lk/.

First Registration is an important cross road for owners as information entered on the electronic land registers will be final.

A prospective purchaser, for example, is not required to look beyond the ownership recorded on the computer.The general principle is therefore, the registered proprietor shall be unfettered by any encumbrances of whatever fashion unless noted on title register and is the absolute owner of the property described.

The Lands Ministry has provided for land owners to apply for Himikam Sahathikaya or await until the Government operates the area where the lands are situated by a Gazette Notification.

Owners need to be knowledgeable about the two systems operating in the country, Leases, mortgage bonds or normal lengthy deeds will not be accepted for registration by land registries where the computerized system operates. All paper transactions for gifts, transfers, mortgages or leases will be invalid in areas where the new system operates.

Clarification could be made from registrars of land, before transacting.

The two systems of law will operate for a long period until the completion of the computerization of all the lands and therefore it is important for owners to know the validity of the documents.

The new system is not judicially friendly and there are a few judicial remedies for owners whose rights are taken away by fraud. The Land Registry is expected to guarantee land title and compensate owners for their losses.

Therefore maximum precautions are taken to ensure the safety of land title. There is an endorsement on the Himikam Sahathikaya not to issue copies of the document and the Land Registry has taken steps to handover the document only to the owner.

Third parties are not permitted to collect the document. Owners need to strictly observe the instructions. The 12 digit identification number is sufficient to make searches or to conduct any other business and the certificate should be dispensed with only after consideration is fully paid on the next transaction.

Even under the old system copies of documents should not be given to third parties unless through notaries.

Frequent cases of fraud are reported, where Powers of Attorneys are granted, a property is empty or is bought to let where the owner is abroad and is absent, where the owner is infirm or in a home, or when documents are unregistered.

As said earlier the party who has been replaced as an owner on the electronic register becomes the legal owner while the other is compensated as to offset the loss by the Government.

This is said to be a common concept of efficiency used by scholars in economics called Pareto efficiency [better known to those who have studied law and economics.] which is if it could not be changed so as to make one person better off without making another person worse off.

The law began in Australia to encourage the private sector who requires lands free of claims, to contribute to the economy of the country. Countries are investing on research programs on improving the system.

Some countries have worked out methods to retain the existing deed system with the cooperation of academic research and comparative study of international documents.