Published In

Advocate

Document Type

Working Paper

Publication Date

2006

Subjects

real property; land; title registration; indefeasible title; British Columbia

Abstract

In November 2005, as part of an omnibus statute amending 11 different acts, the British Columbia government made several significant changes to BC's Land Title Act. The government announced that the changes to the title registration system would 'ensure immediate legal certainty of land title for a person acting in good faith, who unknowingly acquired a fee simple interest in the property through a forged transfer, provided the individual did not participate in the fraud'. In an effort to assuage fears of those who had acquired interests in a system that, if it needed to be fixed, had been somewhat less than secure, the government's information bulletin assured the public that BC’s registration system was 'already highly regarded' and 'considered world-class'. The changes then were to be understood as improvements to what was already a good title registration system. Whatever its quality, the title registration system laboured with uncertainty over its central organizing principle. Did title registration in BC operate on the basis of immediate or deferred indefeasibility? The difference between the two principles lies in the security they provide the person who in good faith acquires an interest in land based on a void document such as a forged transfer instrument. Put simply, under immediate indefeasibility the registered owner of a fee simple interest is immune to a challenge that the registered owner acquired the interest on the basis of a void instrument. Under a deferred system the registered owner of a fee simple interest only holds indefeasible title if he or she is one step away from the fraudulent activity. A person who acquires an interest on the basis of a void instrument remains vulnerable to the claim of the person who has wrongfully deprived of his or her interest. The language in the government’s information bulletin – 'immediate legal certainty' – suggests it intended to establish that BC’s title registration system rests on a foundation of immediate indefeasibility. If that were the intent, is that what the November 2005 amendments have done? Is it now unequivocally clear that BC operates on the basis of immediate indefeasibility? And if so, are property interests more secure as a result? This article reviews the previous sources of uncertainty in the Land Title Act, outlines the changes to it, and suggests their effect on those whose property interests are affected by fraudulent activity. It begins with a brief description of the manner in which the common law treated forged instruments purporting to transfer an interest in land and then outlines the nature of, and different approaches to, indefeasible title in title registration systems.

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