Home • PRRES Inc. Journal • Read the Journal

A comparative analysis of assurance fund vis-ŕ-vis title insurance: which offers better compensation for victims of land dispute

Author/s: Shahrul Natasha Halid, Jady @ Zaidi Hassim

Date Published: 04/05/2021

Published in: Volume 27 - 2021 Issue 2 (pages 107 - 126)

Abstract

Land transactions are fraught with risk because of the nuances of property law and conveyancing practices, as well as skyrocketing land prices. This is demonstrated by the frequent occurrences of land title disputes which often leads to unsatisfactory litigation consequences for landowners. However, some landowners may be able to seek compensation through title insurance or assurance funds. This article explores the differences between assurance funds and title insurance by analysing the benefits and weaknesses of both as implemented in various jurisdictions. This research is critical for developing countries, such as Malaysia which is currently considering implementing a practical and effective scheme, to serve as a buffer against land-related litigation.

Download Full Article

Download the Full Article PDF

14445921.2021.2001725.pdf 14445921.2021.2001725.pdf (381kB)

Keywords

Assurance Fund - Compensation - Land Administration - Title Insurance - Torrens

References

  • Abdul Karim, N. S.Raja Othman, R. A.Ismail, M. S.Maidin, A. J. (2011) Identifying and overcoming the risk of fraud in the Malaysian electronic land administration system, 2011 International Conference on Research and Innovation in Information Systems, ICRIIS’11: Kuala Lumpur, Malaysia, 23 - 24 Nov. 2011.
  • Abdulai, R. T.Owusu-Ansah, A. (2014) Land information management and landed property ownership security: Evidence from state-sponsored court system, Habitat International. 42, p:131-137. Habitat International.
  • Abdulai, R. T.Ochieng, E. (2017) Land registration and landownership security: An examination of the underpinning principles of registration, Property Management. 35(1), p:24-47. Property Management.
  • Abdullah, N. C.Ramly, R.Ikhsan, M. I. (2017) Land registration of titles at stake: West and East Malaysia compared, Environment-Behaviour Proceedings Journal. 2(6), p:197-203. Environment-Behaviour Proceedings Journal.
  • Agegnehu, S. K.Fuchs, H.Navratil, G.Stokowski, P.Vuolo, F.Mansberger, R. (2016) Spatial urban expansion and land tenure security in Ethiopia: Case studies from Bahir Dar and Debre Markos Peri-Urban areas, Society & Natural Resources. 29(3), p:311-328. Society & Natural Resources.
  • Alias, A.Daud, M. N. (2006) Payment of adequate compensation for land acquisition in Malaysia, Pacific Rim Property Research Journal. 12(3), p:326-349. Pacific Rim Property Research Journal.
  • Al-Ossmi, L. H.Ahmed, V. (2016) Land tenure administration: Towards a regulatory backdrop to land tenure in Iraq, Land Use Policy. 57, p:250-264. Land Use Policy.
  • Arruńada, B. (2001) A global perspectives on title insurance, Housing Finance International. 16(2), –.p:3-11. Housing Finance International.
  • Arruńada, B. (2002) A transaction cost view of title insurance and its role in different legal systems, Geneva Papers on Risk and Insurance: Issues and Practice. 27(4), –.p:582-601. Geneva Papers on Risk and Insurance: Issues and Practice.
  • Arruńada, B.Garoupa, N. (2005) The choice of titling system in land, Journal of Law and Economics. 48(2), p:709-727. Journal of Law and Economics.
  • Bellemare, M. F.Chua, K.Santamaria, J.Vu, K. (2020) Tenurial security and agricultural investment: Evidence from Vietnam, Food Policy. 94, (December 2019). Food Policy.
  • Bennett, R.Wallace, J.Williamson, I. (2008) Organising land information for sustainable land administration, Land Use Policy. 25(1), p:126-138. Land Use Policy.
  • Bhandar, B. (2015) Title by registration: Instituting modern property law and creating racial value in the settler colony, Journal of Law and Society. 42(2), –.p:253-282. Journal of Law and Society.
  • Bitinger, P. (1991) Conflict of interest?: attorney as title insurance agent, Georgetown Journal of Legal Ethics. 4(3), –.p:687-706. Georgetown Journal of Legal Ethics.
  • Bouslog, M. P. (1920) Title insurance rates, Lawyer and Banker and Southern Bench and Bar Review. 13(5), –.p:239-244. Lawyer and Banker and Southern Bench and Bar Review.
  • Brasselle, A. S.Gaspart, F.Platteau, J. P. (2002) Land tenure security and investment incentives: Puzzling evidence from Burkina Faso, Journal of Development Economics. 67(2), p:373-418. Journal of Development Economics.
  • Broegaard, R. J. (2005) Land tenure insecurity and inequality in Nicaragua, Development and Change. 36(5), –.p:845-864. Development and Change.
  • Bucknall, B. (2008) Real estate fraud and systems of title registration: The paradox of certainty, Canadian Business Law Journal. 47(1), –.p:1-53. Canadian Business Law Journal.
  • Burke, B. (1973) Conveyancing in the national capital region: Local reform with national implications, American University Law Review. 22(3), –.p:527-580. American University Law Review.
  • Burman, A. (2020) Land title insurance in India?: Lessons from U. S. Regulatory approaches. Carnegie Endowment for International Peace.(Issue August). Land title insurance in India?: Lessons from U. S. Regulatory approaches.
  • Burns, F. (2009) Implied easements and the integrity of the torrens system, Bond Law Review. 21(2), –.p:1-25. Bond Law Review.
  • Calder, J. C.Compton, S. H. S. (2004) A report on title insurance in international real estate transactions, Briefings in Real Estate Finance. 4(2), p:165-172. Briefings in Real Estate Finance.
  • Cradduck, L. (2019) E-conveyancing: A consideration of its risks and rewards, Property Management. 38(1), –.p:25-36. Property Management.
  • Crown, B. (2010) Whither torrens title in Singapore, Singapore Academy of Law Journal. 22, –.p:9-35. Special Issue. Singapore Academy of Law Journal.
  • Cushman, E. (1937) Torrens titles and title insurance, University of Pennsylvania Law Review. 85(6), –.p:589-612. University of Pennsylvania Law Review.
  • Deininger, K.Feder, G. (2009) Land registration, governance, and development: Evidence and implications for policy, World Bank Research Observer. 24(2), p:233-266. World Bank Research Observer.
  • Deininger, K.Jin, S. (200) Tenure security and land-related investment: Evidence from Ethiopia,
  • Deininger, K.Selod, H.Burns, A. (2010) The land governance assessment framework: Identifying and monitoring good practices in the land sector, (Issue 2012). Agriculture and rural development series. Retrieved from http://hdl.handle.net/10986/2376
  • DeWitt, C. (2000) Title Insurance: A Primer, Tennessee Journal of Practice & Procedure. 3(1), –.p:15-24. Tennessee Journal of Practice & Procedure.
  • Dumm, R. E.Macpherson, D. A.Sirmans, G. S. (2007) The title insurance industry: Examining a decade of growth, Journal of Insurance Regulation. 25(4), p:24-51. Journal of Insurance Regulation.
  • Eaton, J. W.Eaton, D. J. (2007) The American title insurance industry: How a cartel fleeces the American consumer. New York Univ. Press.
  • Edwards, R.O’Reilly, J. (1999) The duel between immediate and deferred indefeasibility, Singapore Academy of Law Journal. 1, p:82-112. Singapore Academy of Law Journal.
  • Ford, D. A. (1982) Title assurance and settlement charges, AREUEA Journal. 10(3), –.p:297-312. AREUEA Journal.
  • Gendron, M.Bourdeau-Brien, M. (2012) Title insurance and the “race to the bottom, Property Management. 30(4), p:376-386. Property Management.
  • Griggs, L. D. (2009) Resolving the debate surrounding indefeasibility through the eyes of a consumer, Australian Property Law Journal. 17(2), –.p:259-277. Australian Property Law Journal.
  • Griggs, L. (2002) The assurance fund: Government funded or private, Australian Law Journal. 76,.p:250. Australian Law Journal.
  • Griggs, L.Low, R.Thomas, R. (2016) Accounting for risk: The advent of capped conveyancing title insurance, Australian Property Law Journal. 24, p:371-382. Australian Property Law Journal.
  • Guha, A.Samanta, D. (2021) Hybrid approach to document anomaly detection: An application to facilitate RPA in title insurance, International Journal of Automation and Computing. 18(1), p:55-72. International Journal of Automation and Computing.
  • Hanstad, T. (1997) Designing land registration systems for developing countries, American University International Law Review. 13(3), –.p:647-704. American University International Law Review.
  • Harris, D. C. (2006) Indefeasible title in British Columbia, Advocate. 64(4), –.p:529-538. Advocate.
  • Harun, N.Ismail Nawang, N.Hassim, J. Z. (2015) Land scams involving the power of attorney in land dealings in Malaysia, Pertanika Journal of Social Sciences and Humanities. 23, p:97-106. SpecialIssue11. Pertanika Journal of Social Sciences and Humanities.
  • Harun, N. (2012) Frod dalam urus niaga tanah: Satu kajian perbandingan dengan undang-undang tanah Australia, UUM Journal of Legal Studies. 3, –.p:111-143. UUM Journal of Legal Studies.
  • Harun, N.Bidin, A.Hamid, N. A.Salleh, K. (2021) The proviso to section 340(3) of the national land code 1965 (NLC)?: A Study, Psychology and Education Journal. 58(2), p:1653-1657. Psychology and Education Journal.
  • Havelock, R. (2019) Reconciling equitable claims with torrens title, Sydney Law Review. 41(4), –.p:455-480. Sydney Law Review.
  • Hayden, T.Kelner, J. (2020) The value of title insurance, Journal of Business & Technology Law. 15(2), p:305-344. Journal of Business & Technology Law. Retrieved from https://digitalcommons.law.umaryland.edu/cgi/viewcontent.cgi?article=1320&context=jbtl
  • Haymond, T. T. (1928) Title insurance risks of which the public records give no notice, Southern California Law Review. 2(2), –.p:139-164. Southern California Law Review.
  • Hemphill, T. A. (2019) The title insurance industry: Infusing innovation and competition, Business Economics. 54(3), –.p:177-181. Business Economics.
  • Higgins, E. C. (1927) The benefit of title insurance to the mortgage man, Lawyer and Banker and Centreal Journal. 20(2), –.p:84-85. Lawyer and Banker and Centreal Journal.
  • Hurlburt, W. H. (1992) Hill v. South Alberta land registration district: The limitation period for bringing an action to recover damages from the assurance fund, Alberta Law Review. 30(4), –.p:1371-1376. Alberta Law Review.
  • Jaffee, D. (2006) Monoline restrictions, with applications to mortgage insurance and title insurance, Review of Industrial Organization. 28(2), –.p:83-108. Review of Industrial Organization.
  • Johnson, H. M. (1966) The nature of title insurance, The Journal of Risk and Insurance. 33(3), –.p:393-410. The Journal of Risk and Insurance.
  • Katila, P.McDermott, C.Larson, A.Aggarwal, S.Giessen, L. (2020) Forest tenure and the sustainable development goals – A critical view, Forest Policy and Economics. 120, p:102294. Forest Policy and Economics.
  • Keang Sood, T. (2002) Demise of deferred indefeasibillity under the Malaysian torrens system, Singapore Journal of Legal Studies. 1, –.p:403-408. Singapore Journal of Legal Studies.
  • Keang Sood, T. (2010) Deferrred indefeasibility reinstated in the Malaysian Torrens System: The end of an unfortunate Saga, Singapore Journal of Legal Studies. 2, –.p:546-557. Singapore Journal of Legal Studies.
  • Keenan, S. (2017) Smoke, curtains and mirrors: The production of race through time and title registration, Law and Critique. 28(1), –.p:87-108. Law and Critique.
  • Lawry, S.Samii, C.Hall, R.Leopold, A.Hornby, D.Mtero, F. (2017) The impact of land property rights interventions on investment and agricultural productivity in developing countries: A systematic review, Journal of Development Effectiveness. 9(1), p:61-81. Journal of Development Effectiveness.
  • Lim, M. (2015) Insurance developments in Malaysia, The Journal of Risk Management and Insurance. 19(1), –.p:26-44. The Journal of Risk Management and Insurance.
  • Lobel, M. (1977) A proposal for a title registration system for realty, University of Richmond Law Review. 11(3), –.p:501-528. University of Richmond Law Review.
  • Lovo, S. (2016) Tenure insecurity and investment in soil conservation. Evidence from Malawi, World Development. 78, –.p:219-229. World Development.
  • Low, R.Griggs, L. (2014) Going through the obstruction, the torrens system assurance fund and contemporary solutions?: A tale weaved from a story of a nun, a romantic triangle and sibling corruption, Australian Property Law Journal. 23(1), p:17-35. Australian Property Law Journal.
  • Mandhu, F. (2014) Land titles or deeds registration as it relates to the new model of land registration system for Zambia, Zambia Law Journal. 45, –.p:57-78. Zambia Law Journal.
  • Mccormack, J. L. (1992) Torrens and recording: Land title assurance in the computer age, Wlliam Mitchell Law Review. (18). , (1),.p:61-129. Wlliam Mitchell Law Review.
  • McKillop, H. (1955) Title Insurance, University of Florida Law Review. 8(4), –.p:447-464. University of Florida Law Review.
  • McLeod, A. (1909) The Torrens System in Ontario, Canadian Law Times. 29(7), –.p:695-700. Canadian Law Times.
  • Miceli, T. J.Sirmans, C. F. (1995) The economics of land transfer and title insurance, The Journal of Real Estate Finance and Economics. 10(1), p:81-88. The Journal of Real Estate Finance and Economics.
  • Mugambawa, J. T.Amankwah, H. A. (2002) Land law and policy in Papua New Guinea. Cavendish Publishing Limited. Land law and policy in Papua New Guinea.
  • Murray, J. C. (2007) Attorney Malpractice in Real Estate Transactions, Real Estate Law Journal. 42(2), –.p:221-244. Real Estate Law Journal.
  • Nkurunziza, E.Sabaliauskas, K.Petrošius, A.Cho, B.Yoo, J.Barry, J. (2015) How innovations in land administration reform improve on doing business, How innovations in land administration reform improve on doing business?: Cases from Lithuania. the Republic of Korea, Rwanda and the United Kingdom. How innovations in land administration reform improve on doing business?: Cases from Lithuania. Retrieved from http://documents.worldbank.org/curated/en/450041467995100809/How-innovations-in-land-administration-reform-improve-on-doing-business-cases-from-Lithuania-the-Republic-of-Korea-Rwanda-and-the-United-Kingdom
  • November, J.Rendell, J. (2010) The mirror principle and the position of unregistered interests in the torrens system, New Zealand Law Review. 1, p:151-170. New Zealand Law Review.
  • Nwogugu, M. C. (2010) Economic policy, antitrust, land title systems and optimal title insurance, SSRN Electronic Journal.SSRN Electronic Journal.
  • Nyce, C.Boyer, M. (1998) An analysis of the title insurance industry, Journal of Insurance Regulation. Journal of Insurance Regulation. Retrieved from http://search.proquest.com/openview/3aebce5df19277c7e16bf21b4f820af3/1?pq-origsite=gscholar
  • O’Connor, P. (2003a) Double Indemnity - Title Insurance & the Torrens System, Queensland University of Technology Law and Justice Journal. 3(1), –.p:141-167. Queensland University of Technology Law and Justice Journal.
  • O’Connor, P. (2003b) Title insurance – Is there a catch??, Australian Property Law Journal. 10(2), , –.p:1-20. Australian Property Law Journal.
  • O’Connor, P. (2009) Deferred and immediate indefeasibility: Bijural Ambiguity in registered land title systems, Edinburgh Law Review. 13(2), –.p:194-223. Edinburgh Law Review.
  • Olmstead, D. (1892) Objections to the torren system, Counsellor (New York Law School Journal). 1(6), –.p:153-159. Counsellor (New York Law School Journal).
  • Oshe, M. M. (1930) Title insurance as protection to investors in real estate and real estate securities, Notre Dame Law. 5(5), –.p:237-248. Notre Dame Law.
  • Pelkey, L. A. (1927) The law of title insurance, Marquette Law Review. 38, –.p:38-52. Marquette Law Review. Retrieved from http://books.google.com/books?id=NZP6AQAAQBAJ&pg=PA899&dq=inauthor:Kevin+P+Murphy+ti+intitle:Machine+LearningA+Probabilistic+Perspective&hl=&cd=1&source=gbs_api%0Apapers3://publication/uuid/165A6781-E913-4BA6-9150-718BF26557BB
  • Perumal, P. (2016) A call to Revisit Tan Ying Hong v Tan Sian San & Ors, Malayan Law Journal. 5(1), –.p:1-6. Malayan Law Journal.
  • Quiner, S. J. (1973) Title insurance and the title insurance industry, Drake Law Review. 22(4), –.p:711-737. Drake Law Review.
  • Raff, M. (2009) Torrens, Hubbe, stewardship and the globalisation of property law systems, Adelaide Law Review. 30, –.p:245-289. Adelaide Law Review.
  • Raoul, M. K. (2020) Analysis of the technical efficiency of the programme of modernisation of the land tenure services in a developing country, International Journal of Public Administration. 43(15), –.p:1304-1316. International Journal of Public Administration.
  • Rashid, F. N. (2021) ACHIEVING SDGs in Tanzania: Is there a nexus between land tenure SECURITY, agricultural credits and rice PRODUCTIVITY?, Resources, Conservation and Recycling. 164,.p:105216. 2020. Resources, Conservation and Recycling.
  • Ren, G.Zhu, X.Heerink, N.Feng, S.van Ierland, E. (2019) Perceptions of land tenure security in rural China: The impact of land reallocations and certification, Society & Natural Resources. 32(12), p:1399-1415. Society & Natural Resources.
  • Robinson, H. L. (1952) The assurance fund in British Columbia, Canadian Bar Review. 5(2–3), –.p:445-465. Canadian Bar Review.
  • Rosenberg, M. K. (1977) Historical perspective of the development of rate regulation of title insurance, The Journal of Risk and Insurance. 44(2),.p:193. The Journal of Risk and Insurance.
  • Russell, R. G. (2004) Understanding the Title Insurance Policy, The Practical Real Estate Lawyer. (3). , –.p:17-32. The Practical Real Estate Lawyer.
  • Sherry, C. (1996) Torrens title compensation for loss – recommendations for reform, Australian Property Law Journal. 4, –.p:1-7. Australian Property Law Journal.
  • Sirmans, G. S.Dumm, R. E. (2006) Title insurance: An historical perspective, Journal of Real Estate Literature. 14(3), p:293-320. Journal of Real Estate Literature.
  • Stapley, D. (2018) A recent ruling on title insurance policies neither poses significant ripple effects nor addresses Arizona’s statutory conflicts, Arizona Summit Law Review. 11(1), –.p:63-92. Arizona Summit Law Review.
  • Stein, R. (1983) The “ principles, aims and hopes “ of title by registration, The Adelaide Law Review. (9). , (2),.2687–278. The Adelaide Law Review.
  • Strickler, S. S. (2003) Iowa’s title guaranty system?: Is it superior to other states’ commercial title insurance??, Drake Law Review. 51(2), , –.p:385-402. Drake Law Review.
  • Suchá, L.Schlossarek, M.Dušková, L.Malan, N.Šarapatka, B. (2020) Land tenure security and its implications for investments to urban agriculture in Soweto, South Africa, Land Use Policy. 97, p:1-10. Land Use Policy.
  • Taylor, G. (2008a) Is the torrens system German?, Journal of Legal History. 29(2), , –.p:253-285. Journal of Legal History.
  • Taylor, G. (2008b) The Torrens System’s Migration to Victoria, Monash University Law Review. 33(2), –.p:323-371. Monash University Law Review.
  • Temkin, H. L. (2002) The Value in Protecting the Tenant’ s Interest?: Leasehold Tile Insurance, Probate and Property. 16(3), –.p:35-40. Probate and Property.
  • Toomey, E. (1995) State Guarantee of Title - An Unguided Path?, Canterbury Law Review. 6, , –.p:149-163. Canterbury Law Review.
  • van Leeuwen, M. (2017) Localizing Land Governance, Strengthening the State: Decentralization and Land Tenure Security in Uganda, Journal of Agrarian Change. 17(1), –.p:208-227. Journal of Agrarian Change.
  • Viashima, A. S. (2017) Revisiting Conveyancing risks under the Legal Regime for Land Registration in Nigeria?: A Case for Title Insurance, Acta Universitatis Danubius Jurisdica. 1, –.p:185-202. Acta Universitatis Danubius Jurisdica.
  • Villani, K. E.Simonson, J. (1982) Real Estate Settlement Pricing: A Theoretical Framework, AREUEA Journal. 10(3), p:249-275. AREUEA Journal.
  • Wijayanti, S. K.Ramsay, B. (2016) Life Insurance Take-Up Rate Influencing Factors Comparison between Malaysia and Japan, International Journal of Business and Social Research. 6(7), p:37-41. International Journal of Business and Social Research.
  • Winton, N. (2007) Title Insurance in a Torrens Context, Polemic. (16). , –.p:49-54. Polemic.
  • World Bank. (2015) Registering Property: Measuring the Quality of Land Administration Systems. World Bank Group. doi:Registering Property: Measuring the Quality of Land Administration Systems.
  • Wu, T. H.Chung, L. K. (2011) A law which favours forgers?: Land fraud in two Torrens jurisdictions, Australian Property Law Journal, February. p:130-154. Australian Property Law Journal, February.
  • Xavier, G. (2011) Indefeasibility of title in Malaysia—The revivification of deferred indefeasibility under the torrens system— focus on fraudulently obtained and forged titles, The Law Review. , –.p:138-156. The Law Review. Retrieved from http://repository.um.edu.my/22524/1/9.IndefeasibilityofTitleinMalaysia.pdf
  • Zakaria, S. R.Hussin, K. (2012) Assurance fund as a new mechanism in protecting landowners in Malaysia, 3rd International Conference on Business and Economic Research.
  • Zakaria, S. R.Hussin, K. B. (2013) Recognition of the economic security in the form of assurance fund as a protection to landowners and the economic stimulator in Malaysia, China-USA Business Review. 12(8), p:768-774. China-USA Business Review.
  • Ziemer, M. (2011) Title insurance–The good,the bad and the ugly?: Does victoria need it, Australian Property Law Journal. 20(114), –.p:1-32. Australian Property Law Journal.