The consequences of not complying with land title registration

FRIDAY, MAY 4: By now you may be aware that The Land Title Registration Act 2011 (the “Act”) has been passed and, if all goes to Government’s plan, will be made operative in due course.

The Act creates a new regime for proving ownership of land in Bermuda and for requiring Bermuda landowners to adopt the new regime.

Whether you like it or not, if you own an interest in land (the term “land” meaning houses, condos, apartments, or anything real estate related) you will need to make sure you can prove it.

Failure to do so may result in the Government ending up registered as the owner of “your” land.

Initially, when the Act comes into effect, registration will only be required following a specified dealing with land, such as a conveyance, application for primary homestead certificate, mortgage, etc.

However, this approach alone would mean that it would take many years for the ownership of the whole of Bermuda to be registered. In the UK, where land title registration was introduced in 1925, nearly 90 years later there are still pockets of land that have not been registered.

Consequently, the Act includes provisions which, in due course, will require you to register your land regardless of any dealings.

It is not clear who will be responsible for the cost of this (which could be significant).

If you are not in a position to show ownership or you refuse to register your land when called upon to do so when the Act comes into effect, the Government can be registered as the owner of the land.

The land in question will then, for all intents and purposes, belong to the Government and can even be sold by it to a third party.

Trigger

Schedule 3 of the Act is a detailed section entitled “First Registration – Ancillary Matters”.

Paragraph 10 of this Schedule refers to “Systematic registration – initiation”.

Among items listed there that will trigger the need for you to effect registration of your title is the ability for the Government to simply declare that you have to do it by a certain date. Put simply, the Minister responsible for Land Title Registration can by order published in the Gazette declare that certain portions of Bermuda are to undergo systematic registration of real estate ownership in the “designated area”.

If you own land in the designated area, you will have to prove you own the land by providing title documents to the Land Title Registrar (… hence the need to get your deeds in order and make sure your title is currently good).

The Act sets out a procedure that ostensibly gives people ample and fair opportunity to comply with the requirement for registration.

In certain situations, the Land Title Registrar may invite an as-yet unregistered “owner” to effect registration.

If, after a period of time, a person has not satisfactorily proved ownership to land they claim is theirs, because they either cannot do it or refuse to do it, the land in question can be registered as Government land.

Provision exists for the register to be amended if the “owner” later effects registration, however, the Government may have sold the land by then.

There is provision for compensation to be paid under the Act “for persons who sustain loss from a failure of the land title registration system established by this Act” (Section 2 (e)).

However, in a situation where a person could have registered his land but didn’t, and as a result lost the land, compensation will be reduced — in some cases by up to a half of the value.

All of the provisions of the Act are too numerous and complicated to go into here, but suffice it to say that when the Act comes into force, there may be dire consequences for those who don’t comply.

The Government could end up owning your land!

• Harry Kessaram is an associate at Conyers Dill Pearman