The experience of Hong Kong in developing a program for conversion of existing deeds-based registration to a title-based system, and current status

(‘Daylight’ conversion approach)

Mr. John Davison(Hong Kong)

Background of John Davison• John Davison is a solicitor admitted in Queensland, England and Wales

and Hong Kong. He joined the Registrar General’s Department of the Hong Kong Government in 1972. The department was responsible among other things for the Land Registry. He was a member of the British Government’s team which negotiated the Joint Declaration on the Future of Hong Kong with China in 1984, being responsible for land issues.

• He joined private practice in Hong Kong in 1987 and is a partner in the firm of Kao, Lee & Yip.

• He was a member of the Registrar General’s Working Party on Title Registration from 1988 to 1994 and thereafter a member of the Law Society of Hong Kong’s Working Party on the various Land Titles Bills up to date. He was a consultant to the Land Registrar on what became the Land Titles Ordinance 2004 from 2002-2004.

Hong Kong Background

Hong Kong background

• 1841 cession of Hong Kong Island to Great Britain

• 1860 cession of Kowloon Peninsula• 1898 lease of New Territories (“NT”) for 99 years

to 1997• 1st July 1997 – Hong Kong SAR

Legal system

• Common Law and Hong Kong Ordinances continue

• Land system Government leasehold

Facts relevant to land registration

• Area of Hong Kong – 1,103 sq. km (about 400 sq.m.)

• Population – near 8 million• 50%+ live in NT• About 40% population live in Government

housing• All varieties of land – highly urbanized, high

density commercial and residential areas down to rural and village land, including ancestral land

• 2008/09 year 593,328 documents lodged for registration in Land Registry

• Yearly number varies from about 500,000 to about 800,000

• Mostly sale and purchase agreements, assignments, legal charges

• Number of individual titles approx. 2.8m at end of June 2010

Present Land Registration System

Current land registration system

• Land Registration Ordinance, (Cap.128); 1844 – oldest piece of Hong Kong legislation still extant

• Mainly followed the Van Diemen’s Land Act 1827 (Imperial) (now Tasmania)

• Main principles little changed since 1844

Section 2(1) : The Land Registry shall be a public office for the registration of deeds, conveyances, and other instruments in writing, and judgments; and all deeds, conveyances, and other instruments in writing, and all judgments, by which deeds, conveyances, and other instruments in writing, and judgments, any parcels of ground, tenements, or premises in Hong Kong may be affected, may be entered and registered in the said office in the prescribed manner.

• Priority by date of registration – deemed to be date of lodgment if lodged within one month after execution – otherwise date of actual registration

• Form of register – divided into Ownership Particulars, Encumbrances (including agreements for sale and purchase)

• Registers in book form then cards, now computerized

Land Registry organization

• There is one land registry for the “urban area”.• Originally two in NT, now 8 district registries in

NT• Urban area registry operated by Registrar General’s

Department (“RGD”) until 1993 when Land Registry set up as a trading fund

• NT registries operated by New Territories Administration until taken over by RGD in late 1970’s, early 1980’s.

• NT registers not as well kept as those in urban area

Progress of Reform

Process of change to title registration in Hong Kong

• May 1988 – November 1994 : Government Working Party on Title Registration chaired by Registrar General

• Early 1990 Working Party recommended titles registration system and accepted by Hong Kong Government

• 1994 – First blue bill introduced into Legislative Council

• Second blue bill

• Third blue bill• Fourth blue bill• 2004 Land Titles Ordinance (“LTO”) passed• Not yet in operation• 2005-present – LTO reviewed and amendments

discussed• 2010-2011 amendment bill in Legislative Council

Mass Conversion – Mechanisms Considered

Mass conversion mechanismMechanisms tried in various blue bills

• Midnight conversion• Gradual conversion with voluntary conversion

variation• Provisional title with voluntary conversion to

absolute• Daylight conversion

Midnight conversion

In first Bill

Midnight on appointed day

LRO LTO

Timeline

LTO Appointed

passed day

Gradual conversion

• After appointed day, all new (virgin) land and surrender and regrant land subject to LTO

• Existing titles (LRO land)- application for conversion to be made on first assignment for value

- voluntary conversion allowed

- titles would have to be checked and approved by or on behalf of Land

Registrar

- two systems running in parallel – LRO continuing to apply to LRO land

- Danger of 1st and 2nd class land with corresponding values

LTO LRO LRO

Timeline open-ended -

LTO Appointed no longstop date

passed day

Provisional title absolute title

midnight conversion

- to provisional title

LTO

LRO LRO

Timeline open-ended -

LTO Provisional Absolute no longstop date

title title

appointed day

After appointed day, all new (virgin) land and surrender and regrant land subject to LTO

Daylight Conversion

Daylight conversion

Midnight - Daylight -

no conversion automatic conversion

no change LTO

LTO new land most remaining LRO land

no longstop date for

remaining LRO land

LRO LRO LRO

Timeline

LTO Appointed (incubation period) 12 years after appointed day

passed day

After appointed day, all new (virgin) land and surrender and regrant land subject to LTO

LRO land remains under LRO till year 12 and some continue beyond 12 years

Caution against conversion

• Can be registered under LRO by person claiming title to or beneficial interest in land

• Can be registered up to 12th anniversary of appointed day

• Lasts for 12 months – can be extended by High Court only once for 12 months

• Then cautioner must take out court proceedings and register his claim as lis pendens

• Caution can be removed by order of High Court on application by person with interest in the land

• Registrar can remove in certain circumstances

• Compensation for wrongful caution

• Land subject to caution will not be converted on 12th anniversary – still subject to LRO

Registrar may issue inhibition or caution against conversion – expect will be used mainly in NT

Earlier Mass Conversion in New Territories

Previous mass conversion in NTLand settlement period 1900-1905

• 1902 simple Torrens system type land titles ordinance passed for NT but never brought into operation

• Land survey by surveyors of Government of India

• Demarcation Districts (“DD”)

• Land Court

• Claims to land under Ch’ing Dynasty law on district by district basis

• Assessed by Chinese law experts

• Awards of Land court became schedules to Block Crown leases

• 350 DDs, 350 Block Crown leases