LAND TITLES (AMENDMENT) BILL

Order for Second Reading read.

The Minister of State for Law (Assoc. Prof. Ho Peng Kee): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, this Bill amends the Land Titles Act to, firstly, facilitate the conversion of land from the common law system to the land titles system of registration; secondly, improve the administration of the Act; and thirdly, clarify the law.

In drafting this Bill, we have consulted the relevant Government departments dealing with land as well as the Law Society of Singapore.

Let me highlight the main changes to the Act. I will, first, discuss the amendments to facilitate the conversion of the remaining 2% of our lands from the old common law deeds system to the land titles system of registration.

There are currently two land registration systems in Singapore - the "old" common law system under the Registration of Deeds Act and the "new" land titles registration system under the Land Titles Act. The latter provides for a simpler and clearer land register. The exercise to convert all the lands in Singapore from the common law system to the land titles registration system started in 1996 and we aim to complete it by the end of this year. The Registrar of Titles has converted about 9,200 land lots with a balance of about 2,500 lots. Completing the conversion is hampered by certain technicalities in the law which the following amendments will address.

First, the Bill will allow the Registrar to convert leases of about 3,000 flats which were registered under the common law system during the 1950s and 60s. This was before the Land Titles (Strata) Act came into operation. Currently, it is not possible for the Registrar to initiate the conversion of these leases. The amendments pave the way for this. In addition, to facilitate the process, as one owner's non-response can hold up the entire development's conversion, the amendments provide that the Registrar can advertise the notice of conversion in the local daily newspapers and send a copy of the notice to the owner informing him that the conversion will take place after the expiry of 21 days from the date of publication of the notice. Thereafter, the Registrar will simultaneously convert the land and the leasehold title for all the flats so that the entire development can be brought under the Act.

Next, the Bill will enable the Registrar to convert land of whatever tenure. Currently, leases with an unexpired term of less than 10 years have been excluded as it was felt that they would be expiring soon. However, if they are not included in the conversion exercise, we will have to operate two systems in the meantime. This does not make sense.

The Bill will also allow the Registrar to issue a certificate of title in the name of a deceased proprietor to prevent conversions being held up for months or even years because of delay in settling the estate matters. Some of the Australian states faced with this problem have similar provisions in their laws to deal with this issue. However, I wish to assure Members that although a certificate of title will be created, it will remain in the Registrar's custody and only released to the personal representatives after the deceased proprietor's estate has been settled.

The Bill also deals with common law private leases. These are very old leases created in the 1800s. A good number of them do not even state a date for the commencement of the leases. They indicate the tenure but not the commencement date, which is necessary for the issuance of titles upon conversion of the lands. So, the Bill allows the Registrar, for the purposes of converting the lands, to assume that the lease commenced from the date of the lease.

Sir, let me now touch on the other amendments.

Land converted from the common law system is held with a caution stating that the title is subject to pre-existing claims or encumbrances. This means that the State does not guarantee the title to be free from encumbrance and a buyer of qualified title must still investigate the pre-existing common law deeds, making the conveyance more expensive. It is only when the caution lapses that the title becomes indefeasible, backed by a State guarantee. Sir, under the present law, a caution lapses only if there is a sale of the land after title conversion. The Bill will provide for the automatic lapsing of cautions 10 years after the land was converted, or after 2 years from the commencement of this amendment, whichever is later, even if there has been no sale after title conversion. This will result in more unqualified titles, which benefits the public, as the title investigations are easier and therefore cheaper. This amendment will reduce the number of qualified titles from about 13% to about 7% after 2 years and completely eliminate them after 10 years.

The Bill will also now make it necessary for anyone dealing with a landowner to conduct bankruptcy searches. They can no longer rely on the Land Titles Act to exonerate them from notice of any bankruptcy proceedings affecting the landowner. This is necessary as the Bankruptcy Act provides for the automatic vesting of a bankrupt's property in the Official Assignee. The land register therefore may not show that the bankrupt's property is now vested in the Official Assignee. This amendment will not make things onerous for, say, a prospective purchaser, because in practice, lawyers invariably make bankruptcy searches during property transactions. These searches are easy to carry out as the Official Assignee's records are computerised and available for remote online search.

I will now touch on the amendment relating to restrictive covenants. A restrictive covenant is an agreement made by one landowner with the owner of the neighbouring land not to do certain acts or things on his land such that it would adversely affect the neighbouring land, for example, not to build a block of flats on his land. For registered lands under the Land Titles Act, the restrictive covenant will last for 20 years from the date of its creation or notification on the land register. It can be extended for 10 years each time. For lands registered under common law, a restrictive covenant can last forever unless it is released by the owner of the neighbouring lots or extinguished by an order of court.

Sir, most of the existing restrictive covenants created at common law are obsolete as they have been superseded by planning and other regulatory laws. The Bill therefore provides that restrictive covenants created at common law in respect of unregistered land may, unless extended, be extinguished automatically after the expiration of 20 years from the date of its creation or the expiration of five years from the date of notification on the land register or two years from the date of the commencement of this amended provision, whichever is the latest. This amendment will facilitate urban redevelopment of the land.

Next, the Bill clarifies the position on unilateral severance of joint tenancies. In 1993, a new way to sever a joint tenancy was introduced, that is, severance by unilateral declaration. A person who co-owns property as a joint tenant is able to sever the joint tenancy by a simple unilateral notice in writing. At law, severance usually results in equal shares. But there have been owners claiming to unilaterally sever joint tenancies into unequal shares. The Registrar is not in a position to verify the truth of such claims. Therefore, the Bill now states very clearly that unilateral severance of a joint tenancy can only be in equal shares.

The amendment also clarifies that tenants-in-common can convert their holdings by way of a declaration to joint tenancy only if they are tenants-in-common in equal shares. Co-owners with unequal shares who wish to hold as joint tenants can do so by way of a transfer as there is in effect a transfer of some of the interest of the co-owner with the larger share to the one with the lesser share.

Finally, let me deal with the definition of "land". The current definition of "land" includes airspace or subterranean space which is held apart from the surface of the earth. This definition has posed problems because in the new mixed-use developments, the State is required to issue titles for parcels of land comprising airspace cum subterranean space. One example of this is the Sengkang MRT/LRT station which will be four storeys above ground and two levels underground. To facilitate such developments, the definition of "land" is amended to enable title to be issued for a parcel of airspace cum subterranean space. This will facilitate the creative design of complex integrated developments.

Sir, this Bill will go a long way towards improving the administration of land law in Singapore.

Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Assoc. Prof. Ho Peng Kee].

Bill considered in Committee; reported without amendment; read a Third time and passed.