In April last year we wrote that the Land administration processes and its supporting technology were in desperate need for reform. Little wonder since in May that same year, Jamaica ranked in 131st place in the World Bank Doing Business for ease of registering property. Thankfully, progress is being made and much has been done to move closer to the ideals envisaged in the Vision 2030 National Development Plan.
Current settlement processes (inherited from the Torrens model) for the transfer of property are riddled with complexities and rely heavily on paper-based records that must move physically from one place to another and the requirement that parties or their representatives be physically present to conduct these transactions.
The introduction of e-Titling will mean the eradication of the heavy reliance on the existence of an original Certificate of Title (CT). It is an opportunity for the government to move forward with its land and property registration plans and other reforms related to the governance of its land assets and infrastructure.
Dematerializing
Empowered under the Registration of Titles Act, the National Land Agency (NLA) is obligated to retain physical copies of all original CTs. Records date back to the 1880s. Storage space is increasingly costly and not only are these vulnerable to catastrophic events, they are also subject to deterioration over time.
The goal of introducing e-Titling should mean the elimination of one or more of the several stages in the process by which a transaction is completed and then registered. Today, paper agreements must be signed by the parties and since parties rarely sign agreements in the presence of each other, significant delays are experienced when the document must travel between parties and their attorneys. This is exacerbated further when parties reside overseas. It can sometimes take several weeks or months to get an agreement signed in those circumstances.
Also, under the present system, information contained in the transfer document must be entered on the register at the NLA. This involves not only a wasteful and costly duplication of effort, but also increases the risk of error.
Above all, because paper-based systems lack transparency, parties to a transaction find it difficult to determine in advance a precise date for completion. For businesses and the commercial property sector, this can be especially frustrating and a major demotivation to investment.
The NLA is thus trying to dematerialize by: (a) eliminating paper titles, (b) reducing storage needs and costs, (c) improving process efficiency, (d) increasing processing output, (e) improving data accuracy to reduce application rejections; (f) reducing the number of new CT transactions example through loss of title, (g) improving accessibility and preservation of documents and (h) improving disaster protection/mitigation.
The Benefits
Countries that have switched to e-Titling attest to the several benefits they have gained including:
• the comfort of certainty, transparency and security ensuring that there is no room for competing applications;
• the introduction of cost-efficiency for all parties involved;
• a speedier process between the point of sale agreed (offer stage) and the point of receipt of keys by the buyer (completion stage);
• doing away with the need for a duplicate CT;
• a fall in the number of failed applications due to errors found in manual paper applications (including typos and signing errors);
• a presumption that owners of registered land will have unrestricted powers of disposition in the absence of any other entry on the register;
• a reduction in fraud due to incidences such as impersonations; and
• increased buyer protection from issues arising during the time gap occurring between the completion of the conveyancing transaction and the passing of title at registration.
Conditions Required for E-Titling Implementation
In our assessment, a successful e-Titling platform requires several prerequisites and conditions:
• The government must provide a state-backed guarantee to parties that should anyone suffer a loss as a result of some mistake or omission in the use of the platform, he or she must be entitled to be indemnified for that loss;
• The implementation of the Electronic Transactions Act to facilitate the use of electronic signatures and furtherance of online payments in land transactions;
• The implementation of a national identity system for secure and reliable identity verification and authentication;
• A marrying up or integration of multiple electronic registers such as the NLA’s register, companies register, tax register, national identity registration system and even attorney portals;
• The need for a greater push by the government to ensure that more currently unregistered lands (especially in rural areas) are registered;
• An integrated process for mortgage settlements at the completion stage;
• Effective, robust and complementary laws relating to electronic communications and data storage.
• Legislative changes to the Registration of Titles Act to provide the necessary framework for the operation of e-Titling and the rules that govern its use.
The Integrity of e-Titling
As with the introduction of any proposed new system, risks and teething problems will surface. Drawbacks may include the issue of the security of the data transacted electronically, ensuring accuracy and providing for technology failure (including failed software or power outages).
On safeguarding security, it will be necessary to ensure that the institutions, firms or persons who input material/data on to any platform are those who meet the criteria to be laid down by the platform’s overall guardian. This should include requirements that any such body or person has in place appropriate safeguards to prevent fraud, to verify information from clients, to control access to the platform or register and to ensure compliance with training requirements.
At yet another level, it will also be necessary to have safeguards to prevent unauthorised access to the system from cyber-criminals. Modern encryption techniques make it possible for the recipient of the information to be sure both as to the identity of the sender and that it has not been tampered with. Nonetheless, recent worldwide cyber-hacking incidents have shown that no system can be 100% safe.
The need for accurate data cannot be underestimated as it is critical if the full benefits of e-Titling are to be realised. To this end, the guardian of any implemented platform should make provision for computer-based training (including regular up-dating and refresher training) for users.
Finally, there is concern about the dependency on technology, software and proper electrical supply. A fully integrated electronic system will have to depend on multiple computer links, to the computers which provide the mortgage settlement systems, to the computers of the stakeholders and agents such as Attorneys and to the computers of the various agencies. Clearly the network will have to be robust and will need to incorporate fault-tolerant computer systems and data links (with backups) to ensure that failure is avoided.
Further Thoughts …
Jamaicans rightly seek a more expeditious and less stressful system of dealing with land. Businesses, commercial property land buyers and investors also demand the same.
The transition to a system of paperless transfer of land is no small feat. It requires time and patience. Not only will technology have to be developed and adapted, but there will have to be significant operational changes. Jamaica is already heading in the right direction with its pre-implementation plans involving cadastral mapping efforts, iMap, eLandjamaica service, property watch service, document tracking initiatives, the Government’s NIDS and TAJ’s on-line portal.
Jamaica is no stranger to dematerialization projects and has done so in the past with stocks, treasury bills, government debt instruments and bank passbooks. In a Public Consultation exercise and Conference held earlier this year, the NLA mapped out a 10-year transformation plan whereby e-Titling will start with Crown Lands.
In this regard thus, we must continue to make haste slowly ….
The information provided in this article does not, and is not intended to, constitute legal advice. If you have particular concerns regarding this or any other subject matter that you wish to have addressed, please contact an attorney so that your specific circumstances can be evaluated.
