LAND TITLES BILL

Order for Second Reading read.

The Minister for Law (Prof. S. Jayakumar): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, this Bill repeals and re-enacts the Land Titles Act to provide for changes in land development and practices.

In drafting this Bill, we have consulted the relevant Government departments dealing with land, the Law Society of Singapore, the Real Estate Developers Association of Singapore and the Singapore Institute of Surveyors and Valuers. However, in view of the technical nature of the Bill, I intend to submit it to a Select Committee so that all those interested can submit their views.

I intend to speak only on the main changes to the Act.

First, let me deal with the question of title by adverse possession. The Bill will do away with acquiring of title to registered land through adverse possession. Adverse possession is occupation of land inconsistent with the rights of the owner.

There are good reasons why we should do away with the concept of adverse possession because not only does it cause disputes between neighbours, but it is also not right to acquire title to other people's property in this way. In West Malaysia, the law does not permit adverse possession to registered land.

There is a savings provision to allow claims by adverse possession to be lodged within three months of the date of coming into operation of the Act.

Next, unilateral severance of a joint tenancy. The Bill allows a person owning land jointly with another person to unilaterally sever a joint tenancy.

Let me explain, Sir. Many people in Singapore buy property and register it in joint names, eg, parent and child, husband and wife, and so on. There are situations where one party, for example, the parent/husband is under a legal obligation to provide for the child or the wife. In such situations, even if the parent or husband provides the entire purchase price, the law presumes (unless it is proved to the contrary) that a gift of the property is in favour of the child or the wife in recognition of the father's or husband's legal obligation to provide for the child or the wife.

This form of co-ownership, called a joint tenancy, is very common in Singapore, especially among newly married couples who pool their financial resources together to buy their homes. In law, each co-owner owns or co-owns the whole of the property. When one dies, his or her undivided share is extinguished and the survivor becomes the sole owner. This is known as the rule of survivorship in joint tenancy.

A joint tenancy has certain advantages as a means of owning land. For example, for probate purposes, no further vesting of title in the other co-owner is required. For sale or mortgage purposes, only one title needs to be investigated. For succession purposes, it is unnecessary for one co-owner to make any testamentary gift of his or her share to the other. Those are the advantages.

However, a joint tenancy, by its very nature, also has some serious disadvantages in cases where one co-owner, for good reasons, does not wish the survivor to take the whole of the property. To achieve that, he has to destroy the right of survivorship by severing the joint tenancy. The effect of the severance is to create a tenancy in common under which each co-owner holds a distinct share in the property. In cases where the joint tenants are father/child or husband/wife, the law will presume that each owns a 50% share.

Existing law permits severance of a joint tenancy only in very limited circumstances, for example, by mutual agreement or conduct of the parties; by one co-owner selling and transferring his share to a third party; by an order of court; or where there is a bankruptcy. But a co-owner may wish to sever the joint tenancy in a simpler way, without having to transfer away his or her share of the property and without having to obtain the consent of the other party, which sometimes may not be feasible, especially in certain domestic situations.

Because of these existing legal limitations, injustices can occur. Take the simple example of a father and son who are joint tenants of a house. The son subsequently marries. Unfortunately, later on, let us assume the son dies and the father becomes the sole owner, because of the nature of the joint tenancy; father is unable to get along with the daughter-in-law and her children, and the father ejects her and family from the house which can be done, because the daughter-in-law does not inherit the share of her husband.

Therefore, the proposed amendment will enable a son/daughter or wife to secure his or her interest in the property for himself or herself or her immediate family in a situation where he or she may need to do so. The Bill provides for severance of a joint tenancy in respect of both registered and unregistered land. A joint tenant may sever a joint tenancy in respect of registered land by an instrument of declaration and by serving a copy of the instrument on the other joint tenants. In respect of unregistered land, a joint tenant may sever a joint tenancy by a deed of declaration and by serving a copy on the other joint tenant/s. Of course, no co-owner needs to use this procedure if he does not wish to sever the joint tenancy.

The amendment does not affect adversely the beneficial interests of co-owners in the property. Joint tenants in law may have unequal beneficial interests. The reason is that the law distinguishes between the legal title and the equitable title. What counts in the eyes of the law is the equitable title which gives the right of beneficial enjoyment of the property.

This amendment, of course, will also apply to HDB flats.

The amendment, let me stress, will not affect the rights of the court under the Women's Charter in ordering in a domestic situation the division of the assets of the parties acquired by them during the marriage by their joint efforts.

Sir, this amendment is in the public interest. In fact, in England, the law was changed as long ago as in 1925 to allow a co-owner to sever a joint tenancy by a simple unilateral notice in writing. The amendment enabled co-owners to have full dispositive powers over their interest in property by this simple procedure. What our amendment seeks to do is to give property owners in Singapore the same rights that joint tenants have in the United Kingdom.

Next, let me speak about the amendment on conversion of lands from the common law or the old system to the land titles or the new system of registration.

Sir, there are now two systems of land registration, the common law system under the Registration of Deeds Act and the land titles system under the Land Titles Act. The land titles system of course provides for a clearer and simpler land-register for members of the public.

At present, the Registrar can convert land from the common law to the land titles system only in three situations when, firstly, the land owner makes a Primary Application; secondly, when planning permission for development or subdivision of the land is given; and thirdly, when a deed for valuable consideration is filed at the Registry of Deeds.

The Bill enables the Registrar to initiate conversion of land by examining the Register of Deeds and selecting lands for conversion. Conversion of all lands, let me add, will enable all land records to be computerised.

The Bill also enables the Registrar to convert leasehold land under the common law system which has an unexpired term of not less than 10 years. This has been reduced to 10 years from the previous periods of 30 years and 21 years.

Let me now touch on the amendment dealing with qualified and unqualified titles to registered land. Sir, under the present law, a qualified certificate of title will become unqualified five years after the date of issue of a qualified certificate of title and when a purchaser applies to cancel the caution as to title. The Bill shortens this period. A qualified certificate of title will automatically become unqualified in favour of a purchaser five years from the date of the last conveyance which was cancelled by the Registry when creating the qualified certificate of title.

Next, the period for investigation of title. The period for title searches specified under the Conveyancing and Law of Property Act will be reduced from 30 to 15 years. The period concerning matters set out in the recitals, statements and descriptions of facts, will be reduced from 20 to 12 years.

The advantage of this amendment is that it will facilitate title searches by lawyers and conversion of land by the Registrar of Titles from the common law system to the land titles system.

Next, caveats. A caveat is lodged by a person claiming an estate or interest in land, for example, a purchaser or a mortgagee. Under the present law, a caveat has a life span of five years after which it will lapse. As some large developments take more than five years before the purchaser is able to obtain legal title to his unit, this amendment provides that the life of a caveat may be extended for consecutive periods of five years.

To protect buyers and mortgagees of units in large developments where legal completion takes more than five years, the Registrar has in fact been accepting for notification, extensions of caveats. But in 1989 the High Court in a particular case called United Overseas Finance Ltd v. Mutu Jeras cast doubt on the validity of this practice. The Bill therefore regularises the position of a large number of caveats which have been so extended by the Registrar before the commencement of the Bill.

Sir, the Bill requires a purchaser lodging a caveat to state in the caveat the date of his contract or the date when he exercised his option to buy the property, and the purchase price. These particulars are required for the Ministry of National Development to compile the Property Price Index.

Sir, as I said at the beginning, there are many other provisions which are fairly complex and technical which I will not take this House through and, as I said, I intend to submit this Bill to a Select Committee so that others, particularly experts amongst the legal profession, may have the opportunity to comment on the Bill.

Sir, I beg to move.

Question proposed.

Dr Arthur Beng Kian Lam (Bedok GRC): Mr Speaker, Sir, I rise to support the Bill.

Sir, I am neither a lawyer nor knowledgeable about the intricacies of land law or the registration of titles. But I do know, from discussions with lawyers, that many in the legal fraternity welcome this Bill.

I commend the Minister for Law for having consulted many different interest groups, like the Law Society, the Real Estate Developers' Association of Singapore and others. In view of these consultations, I wonder why it was necessary for him to refer the Bill to a Select Committee. I accept the Minister's explanation that this is indeed a very technical Bill and it can also have implications for property owners that it is right that they should have yet another opportunity to give their views. I also hope that experts on property law in Singapore will come forward if they have views on improving this Bill.

This is indeed a massive piece of law. I wish to comment only on two aspects which, I believe, are of general public interest. Firstly, doing away with adverse possession. Sir, I completely support this proposal to do away with adverse possession as a means of getting title to land that actually belongs to someone else. I think it is not right that a landowner with an established title should be deprived of his title just because, for example, he has been away from the country and his neighbour has encroached on part of his land and squatting on it for many years.

Next, unilateral severance of joint tenancy. Sir, I have listened to the explanation given by the Minister and I wish to lend my support to this amendment. Many of my parliamentary colleagues, I am sure, have also come across cases where a wife and child or children have been thrown out of the deceased husband's home just because the husband had been a joint tenant, say, with his father or someone else. This new amendment which facilitates the unilateral severance of joint tenancy is most welcome.

Mr Chiam See Tong: Sir, I rise also in support of the Bill, in particular, the computerisation of the registration of titles at the Land Titles Registry. This is a welcome step to those who wish to buy or sell property which, I am sure, many of us do at one time or other in our life-time.

Property developers and the business community generally, I believe, also welcome the efforts of modernisation of the system at the Land Titles Registry. I do hope also that the other Government departments, like the PWD, MRTC, Sewerage Department, etc, are also computerising their systems so that searches made to them in relation to a property will not take the normal six weeks but can be cut down to a shorter period.

Sir, at this stage, I would like to declare my pecuniary interest as a practising lawyer. I do a little bit of conveyancing work. But what I am going to say shall be against my professional interest. But, nevertheless, I am going to advocate it because it benefits the public and the business community and Singapore's economy. What I advocate is that the Government should take expeditious steps to fully computerise the system in all Government departments connected with the sale and purchase of land, not only at the Land Titles and Deeds Registry, so that the sale and purchase of a property can be done expeditiously and cheaply. That can be made possible when all the legal technicalities connected with the title to a property can be done away with. This is possible.

Sweden has done it. It has such a system and has been in operation for many years. I understand that in that country, a person can buy a house with the transfer of title to the purchaser within four days. That is possible because the whole system in their land office and other related government departments are fully computerised. All the requisite searches can be done in one afternoon and not in six weeks under our present system. And the sale and purchase of a property comprise just filling in forms by the purchaser and the vendor. It is as simple as that. I believe over there, they do not even need the services of a lawyer. A trained bank officer or a property agent can do the job.

I am afraid my fellow lawyers, should they know that I advocate such a system, will not be very happy with me, especially the more successful ones who deal mainly with this type of work and their earnings are derived from conveyancing work. But I say such a conveyancing system should also be put in place in Singapore. After all, Singapore's economic growth for many years was pushed up by the construction industry. So by expediting the sale and purchase of properties with a faster turnover, the volume in property transactions will naturally increase and Singapore's economic growth will increase to an even higher level.

I therefore support this Bill. I welcome the establishment of a computer database of all land titles and I do hope that in the not-too-distant future that we too, like Sweden, can complete the sale and purchase of a landed property in four days' time, with or without the services of a lawyer, at a cheap rate and with the purchaser getting a good title for his property.

Mr Heng Chiang Meng (Cheng San GRC): Sir, I also rise to support this Bill and since the Minister has committed the Bill to a Select Committee, I do not think I want to go through the points except for two which I hope he will direct the Committee to look into.

Both points, Sir, may not actually be under the purview of the Bill itself, but I think they are very much related. On the first, I must say that it is very seldom that I agree with the Member for Potong Pasir. But in this case, I would like to support his point regarding the speedier registration of all land titles in Singapore. In fact, the Land Titles Act came into operation in 1959 and it was for the purpose to simplify the registration of land titles under the Torrens system. To-date, I must say that the experience has been quite poor in the sense that we must still go through legally trained personnel to do transfers of registered titles, even for properties where developers buy the properties from the HDB or URA and the titles are in good order. Yet, all these transfers must still go through legally trained personnel who, I believe, charge fees that are not in proportion to the amount of work that they have done.

The second point is regarding registration of leases. Sir, the Bill intends to exempt leases of seven years and less from registration. Although I do not know why the term of "seven years" is used, there is actually an unintended impact on leases of real estate in that registered leases attract a very much higher stamp duty than non-registered leases. Such registration and the high stamp duty will affect the development of long-term leases for property in Singapore. In developed countries or cities of the world, like London or New York, where businesses can lease properties for 20 or even 30 years, a great amount of certainty is added to their business plans. In Singapore, because of the difference in stamp duty, most leases go up to three or six years. In this respect, you always have a certain amount of uncertainty for businesses here in the sense that they cannot see what sort of rental they are going to pay beyond the three or six years' period. So if leases below or above seven years can be unregistered, it will, therefore, attract a lower stamp duty. I think this will encourage the development of long-term leases in Singapore.

Prof. Jayakumar: Mr Speaker, Sir, I wish to thank the three speakers for their expression of support for the Bill. With regard to Mr Chiam's comments, I take his point that it will be beneficial for all the Government departments which have dealings in land to have a computerised system. In fact, this is well in hand, and I am not sure whether he is aware that a full briefing was given to members of the legal profession on the computerisation which links up all the information on land. But in case he has missed it, I would ask my Registrar of Land Titles to give him more information because it is one of the most advanced features of our computerisation system. And in fact, the intention is that practitioners can have access to it on-line from their law offices. What he is asking for has, in fact, been done.

I note what he has said about the experience in Sweden and elsewhere on non-legal practitioners doing conveyancing work. In fact, Dr Wang Kai Yuen had asked me this question not so long ago and I explained to him why we are proceeding with caution on that. It is not to protect the vested interests of lawyers but we have found out when we went into it in detail that in England, for example, having set up the system of licensed practitioners to do conveyancing, they have had to set up a parallel system of training, educating such licensed conveyancing practitioners and the whole system for investigation of disciplinary offences, disciplining them and so on. So whether in our place it is worthwhile or justifiable to have a parallel system of education, training, disciplining of a new breed of practitioners, is something we need to consider very carefully, although there is no objection in principle to non-lawyers doing conveyancing

On the two points raised by Mr Heng Chiang Meng, I think it may be best if we leave to the Select Committee to examine these points in further detail.

Question put, and agreed to.

Bill accordingly read a Second time.

Resolved,

That the Bill be committed to a Select Committee consisting of Mr Speaker as Chairman and seven Members to be nominated by the Committee of Selection. - [Prof. Jayakumar].