Question: What is Indefeasibility of Title?Answer:
Indefeasibility of title means that the registered title of real property (land or buildings) determines who has the priority interest or ownership of such property.
The Torrens System
To understand indefeasibility of title, it is important to first be aware of the Australian property system — the Torrens System. The Torrens System operates in Australia by requiring the registration of land. Therefore, a contract of sale for real property is not sufficient to transfer the property. After signing the contract, the dealing between the parties needs to be registered at the relevant land title office in the state or territory where the property is situated. Upon completion of registration, the property is properly transferred.
The Torrens System simplifies the process of dealing with land, as it relies on the indefeasibility of title concept, where a registered interest has priority over all other interests. This allows property buyers to rely solely on the title registration to determine ownership or interest in the real property. As a consequence, they do not need to investigate whether the prior transfer was valid. This provides a higher level of security in real property transactions.
‘Indefeasibility of title’ may sometimes be referred to by different names — for example, ‘conclusive title’. However, the concept remains the same.
Exceptions to Indefeasibility of Title
There are exceptions to the concept of indefeasibility of title, which vary from each state and territory. Some exceptions include:
- prior registered interests;
- prior certificates of title; or
For example, if it can be proven that title registration was acquired by fraud, a court may reverse the registration.