Get ready for land title registration in Bermuda

FRIDAY, MAR. 23: A revolution in Bermuda property law is about to occur. In December 2011, the Bermuda Government passed the Land Title Registration Act 2011 (referred to as the “Act” in this article).

The Act is not yet in force. Seemingly, this only awaits finalization of regulations and the holding of professional guidance seminars for attorneys. It is expected to be operative later in 2012. The Act will dramatically transform the way things are done in Bermuda real estate law.

The Act states (Section 2) that its principal purpose is to provide for a system of registration of estates in (and rights related to) land so as to:

• “a) provide certainty in ownership of registered land;
•  b) simplify proof of ownership of registered land;
•  c) facilitate the economic and efficient execution of transactions affecting registered land; ...etc, etc ”

Right now, for the most part, people who own land in Bermuda prove their ownership by being able to produce a set of title deeds, which show how they became owner.

When there are any dealings with land, a property lawyer must review the deeds to make sure every aspect of each deed in the chain of ownership is in order and accords with the law at the time the deed was made. This can be a gruelling process and fraught with some uncertainty.

Ownership is fundamental to any legal dealing in land.

You cannot sell or mortgage land which you do not own.

That may seem obvious, however when ownership hinges on a lawyer’s opinion of a person’s title, matters can get complicated.

Law is constantly evolving and there are laws that came into effect a long time ago which newly qualified lawyers are not always aware of, so you can get varying opinions of what constitutes a good title depending on the knowledge of the title reviewer.

For this reason, the integrity of a person’s title may be uncertain.  Hence the first stated aim of the new law (i.e.  “provide certainty in ownership of registered land”) has to be viewed as a good thing. 

However, note that the preceding quote from the Act refers to “registered land”. 

The Land Title Registrar will have to form an opinion of one’s ownership before title can be registered.

The Act creates two classes of registered title (Section 28(1)):

• a) absolute title; and
• b) provisional title

An “absolute title” on the Land Title Register is the strongest form of ownership.  It is the kind of title everyone will want. 

Anything less may render one’s land less marketable, if not wholly unmarketable.

A person may have his ownership registered as “absolute” if the Land Title Registrar “is of the opinion that the person’s title to the estate is such as a willing buyer could properly be advised by a competent professional adviser to accept.” (Section 28(2)).

Under the Act, land ownership must be registered any time land is transferred after the Act comes into force. 

Such a transfer will be the trigger event, although it will be open for people to voluntarily register their interests at any time.

Once a person’s ownership is on the Land Title Register as a result of a first registration, there is a certain conclusiveness given to the title that should make it easier to deal with in the future. Section 78 of the Act states:

“If, on the entry of a person in the register as the owner of an estate, the estate would not otherwise be vested in him, it shall be deemed to be vested in him as a result of the registration.”

Loathe

Right now, there are instances where, due to some minor irregularity in the title, some attorneys might be loathe to construe the title as a good title.

In such cases, if the title can be registered under the Act, it should settle any question about the title once and for all. 

Much will depend on the stance the Land Title Registrar takes on each case.

In anticipation of the Act coming into force soon, it would behoove people to “get their houses in order” by locating their title deeds and having them professionally reviewed to discern the current state of their ownership. 

As it takes the opinion of “a competent professional adviser to accept” your title before the Land Title Registrar can class it as absolute, it would be a good idea to have your deeds reviewed by such an adviser so that, when the time comes, you don’t get any rude surprises concerning what is probably your most valuable asset.

Furthermore, a competent professional adviser will be in a position to advise you if there is something that needs to be done in order to improve the quality of your title so that on a first registration, your title is as near perfect as can be, and that the chances of your title being registered without qualification are improved. n

This article is not intended to be a substitute for legal advice or a legal opinion. It deals in broad terms only and is intended to merely provide a brief overview and give general information.

Harry Kessaram is an associate at Conyers Dill & Pearman. He may be contacted at 278-7991 or via e-mail at [email protected].