What are the advantages of a torrens system?

Answer 1

The Torrens system of land registration was created in Australia, imported to the US. Torrens, and was supposed to be a "guaranty" of title to real estate issued by the government office that otherwise typically recorded chain of title, so that if your title was attacked and you were damaged, the Torrens' system was supposed to compensate you. The compensation fund was supposed to be raised primarily by fees associated with the registration process, and was supposed to be so "fool-proof" that the likelihood of a claim was supposed to be virtually eliminated. Something like certificates of title to car ownership. Ownership was on the front side of the certificate and any and all limitations on ownership (mortgages, easements, etc.) were supposed to be posted on the back. When you sold you turned in the certificate and the government was supposed to examine title and issue you a new certificate in conformity with your contractual rights and if the government would not because of a title defect you theoretically had a right of action under the old certificate if the government was wrong and then the government would be able to go after the seller or third party who created the problem. Theoretically if you had a mortgage released you would turn in the certificate for the mortgage to be removed or cancelled on the certificate.

I practiced real estate in Cook County, Illinois in the years before Torrens was abolished here and title insurance was returned to private companies like Fidelity/Chicago Title, Ticor and First American Title. It was run by the Cook County government and was hopelessly mired in bureaucracy. You could close on your purchase on day X and it could take SEVERAL YEARS before you got a new certificate and in the interim most people got title insurance too because there was no way to guaranty title until later and anything could happen in the interim. Good idea, bad implementation.