Journal of Law, Information and Science
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DAVID A. THOMAS[**]
As individual counties in some states in the United States of America are computerising land title records, a few are introducing protocols so title insurance companies and other professional title searchers can obtain search access to those records from off-site locations, including through the Internet. Full public access may soon follow. This paper will explore the background of this development and examine the public policy and legal issues that arise from this new use of the Internet.
Because the availability of land in incredible abundance was a main attraction of the British colonies in seventeenth century North America, the colonists gave particular attention to developing records of land ownership. Indeed, record-keeping systems for land ownership developed faster in America than in England precisely because ownership of land was so important to so many of the colonists.
Even though the British colony in Jamestown, Virginia, was the first permanent British colony in North America, land title record-keeping systems did not develop there as quickly as in the second British colony in Plymouth, Massachusetts, and the third in Boston, Massachusetts. The Virginia settlement, begun in May, 1607, was based on land grants, or patents, to colonial proprietors, who held almost feudal rights over the land, which was actually worked by settlers with only the rights of tenants. Gradually, individual ownership became more widespread, but it was not until 1639 that the legislative assembly of Jamestown adopted regulations requiring registration of mortgages, settling conflicting claims to the same land, confirming land surveys, and making reference to land records and their indexes.[1]
The colony in Plymouth, Massachusetts, first settled by the so-called *Pilgrims* in December, 1620, introduced individual land ownership before 1623, and the earliest known record of a deed in this or any other American colony is a 1627 entry in a Plymouth record book.[2] Probably the Plymouth recording practices were influenced by the contemporary Dutch recording practices (with which the Pilgrims became familiar during their sojourn in Leyden in the years before their coming to Plymouth) and English borough and manorial recording customs.[3]
In the nearby and larger Massachusetts Bay colony (which became Boston, Massachusetts), founded in 1630 and merged with the Plymouth Colony in 1691, a detailed recording act was adopted in 1640[4] and significantly amended in 1647.[5]
These acts and the English Statute of Enrolments[6] seem to have most heavily influenced the later recording acts of other American colonies and states. In general, they created recording systems where parties to a land transaction appeared before some public official and acknowledged the transaction, the official created a short record of the substance and effect of the transaction, and the instruments of the transaction were copied either in their entirety or in summary or abstract form into a public record.
Five basic features characterize American land title recording systems:
1. Instruments used to accomplish transactions in land are valid and operative even without being recorded.
2. Recording of such instruments is used primarily to establish priorities among different claimants to interests in the same land, but not to certify ownership as in a title registration system.
3. Modern recording systems maintain records of the entire instruments, not merely summaries or memoranda of the instruments.
4. The recording systems provide no evaluation of the legal effects of the instruments that are recorded.
5. Instruments must meet certain qualifications before being entitled to be recorded, such as minimal elements of content and being acknowledged before a public official.
American recording systems are created by each state but administered separately by each county within a state, thus creating approximately 3,600 separate title recording systems in the United States. The county officials charged with responsibility for land title records have been described as essentially ‘data custodians,’ who make ‘no affirmations about the legal effect or even accuracy of the data. The evaluation of land title data in governmental custody is left entirely to interested private parties.’[7]
All of this may be contrasted with title registration systems in effect in many other jurisdictions all over the world, including in other common law jurisdictions, in which the governmental entity that maintains the system also affirms the existence or priority of registered interests in the real estate and the identities of their owners or claimants.[8]
In almost all American jurisdictions, recording systems rather than registration systems are in effect. As mentioned, recording is seldom necessary for the validity of an instrument, but when different parties make conflicting claims to the same land, or concurrent interests (such as first and second mortgages) are asserted in the same land, the recording system usually helps resolves the conflict or determine the priorities of parties’ rights. In particular, the recording systems protect so-called bona fide purchasers, those who pay consideration for land rights already held by another party who has not recorded the earlier interest.
When an instrument is presented at a recorder’s office for recording, it is reviewed for form. If it satisfies the requirements that qualify it for recording, it is accepted upon payment of a usually nominal recording fee. The instrument is then date and time stamped, assigned a document number, noted in a document log, and copied, with the original being returned to the party who presented it for recording. Traditionally, document copies have been stored in photocopied form or microform, but electronic storage will soon be prevalent. The copies are stored and indexed in the recorder’s office, accessible to the public and usually free of charge.
Although the recorder’s office is assigned by law to prepare and maintain indexes, it is up to the individual patrons to find and retrieve the document copies by using the indexes. The traditional manual indexes consist of grantor-grantee indexes and, in some jurisdictions,[9] tract indexes, which are more laborious to maintain but much more effective for those who use and rely on the recording system. Again, the increasing computerisation of land title records and associated survey and plat data may eventually make tract indexes the most common form of index.
It should also be mentioned here that not all claims against interests in land are necessarily gathered into and recorded in a county land title recording system. For instance, records of court judgments, which constitute liens against all the judgment debtor’s land in that jurisdiction, are usually recorded in a separate index known as a judgment docket, and a complete title examination must include a search of the judgment docket and other records.
Under typical American conveyancing practices a prospective purchaser of an interest in real property will first enter into a conditional contractual commitment for the purchase and then begin the process of investigating the seller’s title to the land. This requires a search of the land title records to determine (1) that the seller has a deed apparently conferring the title as represented by the seller, and (2) that the seller’s own deed arises out of a predecessor in interest who also appears to have had good title, and whose own predecessors likewise appear in the land title records with valid titles. Thus a so-called ‘chain of title’ is sought in the record, theoretically going back to the original conveyance from the sovereign in which the individual interest was created. Almost all American jurisdictions no longer require a search of title to the source, because now marketable record title acts require only that title be traced back to a valid document and that a chain of valid documentation at least 30 or 40 years old be established, denominated the ‘root of title’ under those acts.
This process of searching out the background of a prospective seller’s title should occur each time that particular land is the subject of a transaction. In generations past, most of this searching was done by attorneys, who not only retrieved and read the recorded copies of documents, but also analyzed and summarized them, preparing so-called ‘abstracts of title’. However, in recent decades American conveyancing practices have been profoundly altered by the widespread and often required use of title insurance, which in general provides a sort of minimalist assurance that the state of the title is indeed as represented in the land title records. Because large mortgage underwriters (usually referred to as members of the ‘secondary mortgage market’) who provide the underlying funding for long-term mortgages always require title insurance for every transaction they underwrite, use of title insurance has become almost universal and the title insurance companies have become the usual agencies to conduct the title searches.
Title insurance company personnel will search the seller’s title and determine that no other recorded interests appear to diminish or defeat that title. If in their search they overlook a recorded adverse interest they may be liable in negligence or the policy of title insurance may be subject to a claim. Very broad exclusions from coverage (such as for rights of adverse possessors or for discrepancies that would be revealed by a survey or inspection of the property) minimize the successful claims, so that only 3-5% of premiums paid in by insurance customers are paid out again in claims settlement. Much of the rest of the revenue is used in conducting the title searching process. Many title insurance companies who transact their business in particular localities build their own title records from the public records, which private records they refer to as ‘title plants’, and these companies have tried to develop more efficient and reliable ways of searching those titles on their own premises.
Efforts by both title insurance companies and public recorders’ offices to improve the title searching process have naturally led to increased computerisation of title records and of search processes. American title insurance companies began computerising their private land title records in the 1960s, and public recorders’ offices began their own efforts to computerise in the 1970s. (Computerisation of a registration system in Australia began in 1969.)[10] The computer systems usually consist at a minimum of a database with ownership information and a database with maps showing the units of land ownership and identifying numbers or symbols attached to each unit. In the years since these ‘firsts’, technological developments have spectacularly increased the ability to distribute access to such databases, so that users in a variety of different localities can have at least ‘read only’ access to the data base. While this is most readily achieved through file servers and local area networks, it now appears that worldwide access to local land title record databases through the Internet is technically feasible, even if not especially urgent.
The Internet evolved in 1969 as a U.S. Defense Department experiment attempting to link the department with military researchers and contractors. The experiment sought to ensure reliable communication in case of a nuclear attack, so that, if one of the network links became disrupted, through dynamic rerouting, communication could be preserved through other links. Universities became involved through UNIX, and then the U.S. National Science Foundation built a faster network, leading to the shutdown of the Defense Department network.
Today the Internet includes computers and users all over the world. As of late 1996, it was estimated that 23.4 million online users were active worldwide, with growth projected to 66.6 million users by the year 2000.[11]
As reported in a recent American Law Institute/American Bar Association Course of Study:
Many governmental agencies are going online and permit remote access to electronic data and public records. One of the primary purposes of using computers to do research is the ability to access information from your office or home computer without having to physically go visit the documents. From the information provider’s perspective, making public record information available through computers saves time, expense and resources because people can get the information without actually visiting the office.[12]
The amounts and varieties of governmental information now online are enormous and increasing with astonishing swiftness.[13] Of keen interest to U.S. lawyers are the initiatives in electronic filing.
Effective January 1, 1997, the Florida State Supreme Court will allow a court document to be filed by electronic submission, provided that the court or clerk has the ability to accept such documents and the filer has obtained approval from the State Supreme Court. An original paper copy must be filed in the court records within 10 days after the document was electronically transmitted.[14]
Curiously, searching or transmitting land transaction instruments to county recorders’ offices in the U.S. is not one of the numerous government services or databases listed in the literature or anticipated by the authors trying to describe the future of online services in the U.S.[15] Nevertheless, once a county has committed its land title records (or at least the most recent of them) to electronic form and retrieval, the next step to online and then to Internet access seems both natural and easy.
The simplest method for a rather small governmental unit, such as a county within a U.S. state, to facilitate access to land title records through the Internet is to create a link to an already existing state information system. Quite likely a home page for each county already exists in such an information system and use of this statewide facility may even be cost-free for the county. Expenses for the county will consist of creating its own home page and links and protocols, in addition to the costs of keeping its information up to date.
A governmental unit such as a county which intends to provide Internet access to land title records must confront some early policy decisions about how far to go with information service. From the citizen’s point of view, a county should provide access to its entire land records management system, which gives transactional information, tax assessments, parcel identifiers, addresses, survey descriptions, and the ability to trace backward to earlier links in the chain of title. In addition, the county data should include the county*s geographical information system (also computerised), giving access to plats and other survey information, high level or aerial mapping and imaging, overlays for special districts and zones, and a street index, all integrated with the land records management system.
For the future, a county recorder’s office could rather easily progress to electronic document submission, including electronic notarial acknowledgments, necessary to qualify a document for recording.
With such a system in place, the public authorities would then need to address several policy questions:
a. Access and Privacy. Land title records in the U.S., and the associated geographical and survey information, are public records, open to any person for physical inspection onsite during regular business hours. This access is provided free of charge, and copies of any documents are available for nominal fees. In those counties where land title records are computerized, the recorder’s office provides computer terminals at several public workstations where users may search, retrieve and print copies with or without staff assistance.
Presumably, none of this need change with the introduction of Internet access. Users who print copies of documents may do so without charge, but if they want document copies authenticated, they will still need to obtain those authenticated documents at the recorder’s office.
In practice, a county that introduces Internet access to its land title records will probably not move immediately to full public access. Most likely, and sensibly, a county will provide a website and give out the website address only by subscriptions and only to the title insurance companies, abstracters, appraisers, realtors, tax consultants and others who have a continuing professional need to know that information. Once the county officials have demonstrated that they can provide this subscription without difficulty, they could then post the website address on the county home page, inviting full public access. However, there appears no need to be concerned about too many simultaneous users.
This access is for read-only (and printing out what appears on the screen). It is extremely important that data entry and alteration be left strictly in the hands of the county recorder officials.
Theoretically, the privacy issue has become moot, because any person may physically search the land title records in a county recorder’s office and have access to the entire body of information kept there.
The main privacy concern raised by Internet access is simply that the audience to whom that information is made available is so much larger, and the ease of access is so much greater. So, while I live with the realisation that the mortgage information on my dwelling is fully available to the public, I am somewhat comforted by the knowledge that few will bother to look it up. This comfort may disappear with the advent of Internet access, since even idle curiosity may be so easily satisfied.
b. Security. Where concern about user misconduct exists, access to the data may be password protected and constantly screened against introduction of viruses. Nevertheless, the possibility persists that from the privacy of their own computers malicious hackers could eventually succeed in entering and wreaking havoc in these extremely important and sensitive databases. Frequent backups and diligent detection efforts must be in place to guard against such damage.
Perhaps it would be necessary to ensure that the archival data base not be exposed at all to Internet access, which instead will be linked only to an updated duplicate.
c. Liability for errors in the record. In present manual and computerised land title record systems in the U.S., the issue of whether liability can be imposed on the county when County recorder’s office personnel make errors in entering or indexing instruments has been frequently litigated. Most cases result in no liability for the government entity or officials, and that situation would probably not change after Internet access is introduced. In the absence of specific statutory provisions to the contrary, the recorder has traditionally been protected by a shield of governmental immunity.[16] [Note 16] Most states provide some liability [coverage], but the scope of liability [coverage] is usually below that of a common law action grounded in negligence; recovery on a recorder’s bond may be permitted, but bonding limits may be inadequate to cover the claim
d. Governance. In all U.S. states the county recorder is charged by state statute with the responsibility for creating and maintaining the land title records and associated indexes. These governance responsibilities will not change with the introduction of Internet access, but possibly some technical amendments in the authorising statutes will be necessary. In particular, state legislators may wish to establish standards for currency in light of enhanced technical capabilities, and perhaps even to impose standards that are uniform throughout the state. And even though the county officials in the U.S. are free to move into new advancements, such as Internet access, on their own and at their own pace, again state legislators may wish to authorize and mandate all counties in the state to go forward at some uniform pace, perhaps on a facilitating network provided by the state. This would be especially true if electronic acknowledgments and electronic filing are encouraged and require changes in the state statutes that set out standards for a document to qualify for recording.
Maintaining and indexing land title records in the United States are responsibilities given to the county recorders in the counties in each state, with some standards and procedures set out in state statutes.
Even though operating under state authority, county recorders are usually free to carry out their duties in their own way, and introduce new technology at their own pace. More and more county recorders have introduced computerisation of their land title records and associated geographical information systems and are providing terminals and workstations for professional land title searchers as well as for members of the public who use those records at the county offices. It is but a short step forward to introduce Internet access to those records, usually through a link on an already established home page provided by the state or the county. This change has just barely begun, and officials are moving cautiously so they can deal with all the issues raised by expanded access to these very important data bases, but there seems to be no real obstacle to vastly expanded Internet access to land title records in the near future.
[*] A Paper Prepared for the 1st AUSTLII Conference on Computerisation of Law via the Internet
[**] Professor of Law J. Reuben Clark Law School Brigham Young University Provo, Utah, U.S.A.
[1] William Walter Hening, The Statutes at Large, Being a Collection of All the Laws of Virginia 227-472 (1832).
[2] Rufford G. Patton and Caroll G. Patton, Land Titles § 6 (1957).
[3] John L. McCormack, Chapter 92, ‘Recording, Registration and Search of Title,’ 11 David A. Thomas (ed.), Thompson on Real Property, Thomas Edition 82-83(1994--).
[4] 1 Records of the Governor and Company of the Massachusetts Bay in New England 306-307 (Nathaniel Shurtleff, ed., 1853-54).
[5] Laws and Liberties of Massachusetts, 1684, 13-14 (Max Ferrand, ed., 1929).
[6] 27 Henry VIII, c. 16 (1536).
[7] John L. McCormack, Chapter 92, ‘Recording, Registration and Search of Title,’ 11 David A. Thomas (ed.), Thompson on Real Property, Thomas Edition 829 (1994--).
[8] Id. at 79.
[9] Tract indexes are reportedly used in about one-third of recorders’ offices, but are required in only about 10 of the 50 states. Id. at 93.
[10] John L. McCormack, ‘Torrens and Recording: Land Title Assurance in the Computer Age,’ 18 Wm. Mitchell L. Rev. 115 (1992); A. G. Lang, ‘Computerised Land Title and Land Information,’ [1984] MonashULawRw 9; 10 Monash U. L. Rev. 196, 197 (1984).
[11] Internet Week, Monday, November 25, 1996.
[12] Linda S. Brehmer and Ernest A. Cox, ‘Making the Internet Useful,’ ALI-ABA Course of Study SB48 129, 131 (January 9, 1997).
[13] See Max Lent, Government Online (New York: Harper Perennial, 1995); John Maxymuk (ed.), Finding Government Information on the Internet (New York: Neal-Schuman Publishers, Inc., 1995).
[14] Rule 2.090 (Electronic Transmission and Filing of Documents), Florida Rules of Judicial Administration, reported in 681 So. 2d 698 (Fla. 1996); John Gibeaut, *Sign on the Dotted Screen: ABA takes lead in developing guidelines for electronic document verification,* 83 ABA Journal 100 (May, 1997).
[15] See, e.g., Richard D. Marks, *Current High Technology and Information Infrastructure Initiatives,* 34 Jurimetrics Journal 117 (Fall, 1993).
[16] Siefkes v. Waterton Title Co., 437 N.W.2d 190 (S.D. 1989) (county recorder protected from liability under the doctrine of governmental immunity); Paul E. Basye, ‘A Uniform Land Parcel Identifier--Its Potential for All Our Land Records,’ 22 American U. L. Rev. 251 (1973).
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