Land Title
The chaotic and uncertain state of the land title registration in Sri Lanka is one of the most serious obstacles to a prospective buyer, be it a local or foreign. This hinders the economic progress. Five decades of civil strife has made matters worse.
In Sri Lanka, the system of deeds registration is governed by the Registration of Documents Ordinance No 23 of 1927. Read the word ‘Documents’ carefully. It does not refer to land or title registration, but registration of a document in general. What we need is a specific law for registration of title.
The law does not require deeds to be registered but gives preference to a registered deed over unregistered deeds.
Successive governments have recognised the need for land title reform. Parliament has enacted the legislative framework for the transition to a better system modelled on the Australian ‘Torrens System’ of title registration (Registration of Titles Act No. 21 of 1998, popularised as Bim Saviya).
Implementation has been slow partly for financial and administrative reasons but also because of real concerns of property owners who currently enjoy peaceful possession of land but fear the loss of their legitimate but legally uncertain rights in the transition. These concerns are real and must be addressed in introducing reform. What the country can ill afford is indifference and inertia.
Sri Lanka has one of the most cumbersome systems of registering title documents. A World Bank report of 2012 ranks Sri Lanka at 161 out of 183 in this respect. (World Bank 2012)
The transaction costs of acquiring indefeasible title to land are unacceptably high in Sri Lanka.
Verification of title before registration can take up to seven days of historical search of past deeds archived in primitive conditions. The registration process will take another 83 days on average to complete.
Even this costly process does not assure indefeasible title to the buyer. Land disputes make up a large proportion of the workload of courts. Land cases may take up to 10 years on average to reach a decision.
Registration does not provide proof ownership. If the sale has any legal defects, ownership fails. The officials have no responsibility to ensure the the owner has the right to sell. They also lack the competence to decide on the sellers credentials.
This registration system is open to fraud. No system, however sophisticated, can eliminate fraud totally. But digitising and computerising the land registry archives will go a long way in reducing fraud. With the advancement in technology, the cost of computing power is declining continually. A colossal expenditure will not be required to computerise the land registration system.
The deeds registered are seldom accompanied by a plan made by a qualified surveyor. The plans submitted for registration must fit into an overall regional or national plant. Only then the boundary conflicts can be resolved.
A proper system of title registration should provide a definitive legal statement of the ownership of an identifiable parcel of land at a given point in time. The dimensions and the location of the parcel will also be clearly defined as a part of the national (or regional) map of properties known as the cadastre. Any dispute concerning the ownership must be legally resolve before the title registration. Such a system would provide a state guaranteed title to registered lands.
