Protecting your property deeds, voluntary first registration.

Your home is likely the most valuable asset you’ll ever purchase and own, so surely you want it as protected as possible?

For many years definitive proof of property ownership in Bermuda was solely based on paper deeds and the creation of a chain of ownership from owner to owner to confirm that the property you’ve bought is “good and marketable”. The result is that your deeds to a property are in some ways as valuable as the property itself, without your deeds it can be very difficult to show you definitively own the property which would make selling or mortgaging your home very difficult and costly.

To modernize the way property ownership is proved the Land Title and Registration Office (LTRO) was established in 2006 by Government to provide an accurate, accessible and comprehensive record about land and property ownership and any interests affecting land. To effect this, the LTRO have implemented an electronic register of property ownership, a registered land system, assigning each property a unique reference known as a Parcel ID/Number. In England and Wales a similar system has been in place since the 1960s/1970s and now the vast majority of all properties are on their registered land system.

Since mid-2018 any transaction that involves the sale of a property for value (a conveyance), a first mortgage or transfer of a property by way of court order have been compulsorily registerable with the LTRO, resulting in an electronic register being created. It is this electronic register that now definitively proves your ownership of the property rather than any deeds in your possession. What many property owners may not have realized is that you can choose to voluntarily register your property with the LTRO at any time which brings with it several benefits and protections.

First, and most important, is that the centralized database of ownership created by the registered title system is underwritten by a statutory guarantee (see Schedule 1 of the Land Title Registration Act 2011), what this means for an owner or buyer is that if you suffer loss as a result of a mistake in the records kept by the LTRO you could be properly compensated from a centrally created indemnity fund. At present there are no “indemnities” available to you where you rely solely on your original paper deeds.

Second, the LTRO will in most instances keep copies of any particularly important deeds that relate to your property, these most commonly would be deeds that contain a right of way or some other easement/right. Where the LTRO has kept an electronic copy of a deed you or an attorney can for a modest fee obtain a copy of the deed. Where you rely solely on your paper deeds and one has been lost or is damaged, unless you can find a copy from another party to that deed, the likelihood is that it’ll be lost forever.

Finally, with a registered parcel of land, when you come to sell or mortgage your property the whole process with your chosen attorney should be quicker and simpler. Steps such as waiting for a bank to release the deeds to your attorney will be skipped, the need to review several historic conveyances that do not contain useful information is no longer is required and your ownership is proven simply by the Land Register Report provided by the LTRO. All in all, a more efficient process.

Once your property has been registered and a unique number assigned proving your ownership, whilst your deeds become less important, we would not recommend disposing of you deeds to the property as there are some limitations with the system in place (the same is true for the systems in place in other jurisdictions). Notably, the index map extract produced by the LTRO (which is a plan indicating the extent of your property) does not guarantee the extent or location of your property boundaries, the scaling of the maps used means there’s roughly a +/-2m tolerance applied. As such if you had a dispute with a neighbor regarding a boundary the plans provided by the LTRO wouldn’t be sufficient and the original plan(s) attached to the deeds would still be needed to settle any dispute. Overall, however, the benefits far outweigh these minor limitations.

William Warnock is a senior attorney and head of the Real Estate Department at Chancery Legal Ltd. A copy of this column is available on the company's website at www.chancerylegal.bm.

This opinion should not be substituted for legal advice and persons are advised to seek their own legal advice.