2. I don't even understand how a title transfer could happen without verifying ownership. Is the title system in the USA decentralized or that much different than elsewhere? i.e. Torrens-style
The claim that the title insurance industry is the reason for lack of adoption of Torrens title schemes is uncited, and immediately followed by descriptions of several cases where Torrens title was adopted (often poorly) and later abandoned.
Fascinating, how is ownership established if there is no single source of truth?
I feel the answer to this is also crucial to understanding OP. It could be a minor annoyance or the real possibility to lose your land.
There is: the county clerk in the county where the land is located.
By contrast, in the Torrens system, whatever the government records say are final. If you are the innocent victim of a mistake by the government (or a fraud against it), the government has to compensate you; but you don’t actually get the land back if it has since been sold to an innocent purchaser.
First, it doesn't seem like that's always the case, based on another post upthread talking about a land ownership case that went to the high court because of an error in the government's records.
Second, since there is no single government for the entire world, any government trying to implement a Torrens system is still going to face the problem of events happening outside its jurisdiction that its records do not and cannot contain, which affect ownership of property in its jurisdiction. So there cannot be a "single source of truth" in the sense you appear to be using the term, even in the Torrens system.
(And, from similar cases in the UK which has this system, if the land registry fucks up the transfer is still final and this has been upheld by the court, the government may just be liable for damages)
This is also true of county clerks in the US: any transfer of property in the county has to be recorded on a deed that is submitted to the county clerk and kept on file by them. Otherwise it hasn't happened.
> if the land registry fucks up the transfer is still final
This is the part that might not be the same in all US jurisdictions (though it appears it is the same in some, someone posted upthread about Iowa having a system like this).
No, the point is that this is actually not true. The transfer has happened as soon as the deed has been executed. There are many reasons you generally want to record the deed in a timely fashion, but doing so is not strictly necessary.
It is in Florida, which is where I live. Florida Statutes section 695.01:
"No conveyance, transfer, or mortgage of real property, or of any interest therein, nor any lease for a term of 1 year or longer, shall be good and effectual in law or equity against creditors or subsequent purchasers for a valuable consideration and without notice, unless the same be recorded according to law"
I can't say whether every US state has similar law in place, but I suspect most of them do, since both the State and the county clerks get revenue from the recording fees.
By my lay reading of that, it doesn't even actually necessitate recording the deed sooner for it to have those effects - rather it just means that the deed needs to have been recorded some time before you get to court.
> it just means that the deed needs to have been recorded some time before you get to court.
No, before whatever event happens that might trigger a lawsuit.
For example (hypothetical as far as I know): say I purchase a property from a fraudulent seller. They promise me they'll record the deed after it's signed and notarized by both of us, but they never do so. (Of course I'd be stupid to do things this way, but maybe I'm a real cheapskate and want to save on title company fees.) Then they sell it to someone else. In order for my ownership rights to be protected by Florida law, I would have had to see that the deed was not recorded, and do it myself (and pay the recording fee), before the date of the second sale. Before the date of the court hearing to challenge the second sale would not be sufficient.
It's true that, in a typical closing in Florida (and in every other state where I've bought real property), the closing takes place at the title company's office, their notary notarizes all the documents and gives me copies before I leave, and I get the key to the house at the end of that. I don't have to wait until the deed is recorded with the county to take possession.
My question would be, how does a closing work in jurisdictions that have Torrens title? Does the closing have to take place at the land registry, so they can confirm that everything is checked and valid and recorded before I get the key to the house?
I'll accept that interpretation. But that's still just a patch over the underlying semantics trying to eliminate a lot of thorny cases, not a full change in semantics.
For example, let's say 12/31 is a Sunday. The seller wishes to sell the property this year for tax purposes. The seller executes the purchase agreement and the deed on 12/31, and then only records the deed on 1/2 (when the registry reopens). For purpose of taxes, that is still treated as a sale in the earlier year, right?
> My question would be, how does a closing work in jurisdictions that have Torrens title? Does the closing have to take place at the land registry, so they can confirm that everything is checked and valid and recorded before I get the key to the house?
I have no idea. It seems like the main difference with Torrens title is that when the deed is accepted by the registry then you know it is authoritative. So a closing at an attorney's office with delayed recording has the same ambiguity under both systems. The difference would be that when the deed is confirmed recorded under Torrens, that ambiguity has been fully resolved. Whereas under non-Torrens that ambiguity hangs around indefinitely, insured against by title insurance, and eventually [mostly] extinguished by adverse possession.