The Need for Land Reform in the Caribbean… Towards Land Title Guarantee

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By Clement Chigbo

In most countries, land is the single greatest resource and largest asset. A modern and efficient land registration system underpins an economy by safeguarding property ownership. Ensuring formal property rights and effective land management is fundamental to economic growth, national wealth and sustainable development. Given today’s economic climate, it is in the interest of the Bahamas and the Caribbean region to embark on a fundamental reform in land management and administration.

Many governments in commonwealth countries around the world, as well as major international funding institutions, have recognized for some time that land title reform is the most critical development for a country to stimulate its growth and progress. A formal land registration system facilitates access to credit as real property is the most requested form of collateral by financial institutions in order to secure loans. The importance of secure property rights and the ability of national authorities to guarantee those rights are vital to sustainable productive land use, increasing investment and maintaining social stability.

In the Bahamas, land administration is based on the old common law deeds recording system. In a deeds system a title is not guaranteed and this has generated a tremendous degree of uncertainty in the Bahamian property market. Proof of title and ownership in the Bahamas continues to be highly problematic. For example, the unauthorized home demolitions experienced of late and the unclear titles in generational land. The issues are not limited to individual home owners. On a national level, this system is problematic for economies like the Caribbean region that rely heavily on foreign investment.

Generally speaking there are two types of land registration systems: deeds (i.e. a register of interests and a repository with no state guarantees) and titles (i.e. a registration system of land titles that provides state guarantees). The primary objective of both is to provide a purchaser of land and citizens with public notice of ownership and other rights in land. Under a title system, the state provides a guarantee of indemnity (security) regarding who owns each registered parcel of land. This guarantee enhances a property’s marketability; for instance title properties are generally not vulnerable to claims of adverse possession – a risk that still exists under a Deeds Registry.

The benefit of a modernized land registry system can be found in Ontario, Canada with Teranet Inc. This Canadian company successfully co-implemented a modernized and efficient land registration system in partnership with the Government of Ontario. In the early 1980s, the land registration system in the Province of Ontario was becoming costly to manage with over 400 million paper records in a fully paper-based system. In addition to cost, the Government was challenged by search and registration volumes that were steadily rising. At the time, Ontario managed two systems – both a deeds registry and a land titles system. Confirming good title under a deeds system can be, in many cases, quite labour intensive, and it provides consumers with limited guarantees. In the early 1990s the government of Ontario looked at alternative strategies resulting in a Public-Private Partnership forming

Teranet. This unique strategic alliance had a mandate to address the key issues and resolve the constraints facing land registration, including automating a cumbersome paper-based system, completing the administrative conversion from a deeds to a land title system and to build and operate Ontario’s Electronic Land Registration System – one of the most advanced land registries in the world.

The result of the Teranet-Ontario partnership is a modern registration system that uses secure and reliable modern technology. Further, important public interests are protected through continued government-retained ownership, control and privacy protection of the land registry data. Citizens and land registry customers enjoy faster services, shorter waiting periods and the ability to access and perform search and registration services remotely. The need for anyone to physically visit a registry office has essentially been eliminated.

The success of the Ontario experience can be duplicated, and the Bahamas and neighbouring common law countries in the Caribbean should consider the benefits inherent in a modernized land registration system. Benefits include greater security of land title, guaranteed ownership, less acrimonious and costly disputes/litigation, a drastic reduction of fraud and ultimately improving conditions for investment and a strong market economy.

The electronic land registration system in Ontario is a model for how government, in partnership with the private sector, was able to design, develop and implement a modern registration system. The Bahamas and the Caribbean region should learn from the Teranet-Ontario model and leverage the experience and capabilities of transforming a critical piece of social infrastructure. A land title reform would bring a tremendous boost to the economy of the Bahamas and Caribbean region. Investors from around the world would be more attracted to a Bahamian property market that provides a guarantee of title where property investments and holdings are secure.

Today, individuals that own and trade land as a capital asset require security in their property dealings and clear ownership – a modern land registration system is a means of achieving that end. As Hernando De Soto once said: Can you have a prosperous market economy without knowledge of who owns what and how they’re related?

Clement Chigbo a solicitor of England and Wales and a registered associate in the Bahamas, practises as a registered associate in the law firm of CF Butler & Associates, Nassau, Bahamas. He is also a doctoral candidate and tutor in law at School of Law, University of Aberdeen, UK.
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The writer can be contacted at: lawscholar2006@yahoo.com.