Following is a question by the Hon Lau Kwok-fan and a written reply by the Secretary for Development, Mr Michael Wong, in the Legislative Council today (June 8):
The Land Titles Ordinance (Cap. 585) (LTO) was enacted by this Council on July 7, 2004. LTO aims to establish a new system which the Title Register will be conclusive evidence of the titles to and the interests in registered land, with a view to replacing the present deeds registration system that gives no guarantee to titles. However, LTO has not yet been brought into operation. In this connection, will the Government inform this Council:
(1) given that in reply to a question raised by a Member of this Council on June 27, 2018, the authorities indicated that they would continue to liaise with stakeholders on the "Two-Stage Conversion Mechanism" on which no consensus had been reached, and strive to seek an acceptable proposal on the necessary amendments to be made to LTO, of the progress of the discussions between the authorities and stakeholders and the specific issues which yield divergent views, as well as the time planned for implementing the Mechanism;
(2) as the authorities indicated that it would forge consensus with major stakeholders on the "new land first" proposal (i.e. the implementation of the land title registration system on new land first) and consult the LTO Review Committee and the LTO Steering Committee, and then expeditiously draft the Land Titles (Amendment) Bill and introduce it into this Council for scrutiny, of the progress of the relevant work and the time expected for implementing the proposal;
(3) given that Hong Kong has been receiving a lower ranking in respect of the constituent indicator of "registering property" (e.g. its ranking was 53rd in 2019) in the annual Doing Business Report published by the World Bank, whether it has studied if the reasons for Hong Kong's lower ranking are related to the deeds registration system which has been adopted all along; if it has studied and the outcome is in the affirmative, whether it has studied if the implementation of the land title registration system can improve Hong Kong's business environment; and
(4) whether it has studied, among the overseas jurisdictions with common law background, which economically well-developed regions/countries have not adopted the title registration system at present?
The Legislative Council passed the Land Titles Ordinance (Cap. 585) (the Ordinance) in July 2004, and said that the Government should conduct a comprehensive review on the various outstanding issues before the Ordinance comes into operation. The Government is committed to the liaison with various stakeholders with a view to reaching consensus for the early implementation of the Ordinance.
Our reply to the various parts of the Hon Lau Kwok-fan's question is as follows:
(1) and (2) After the implementation of the title registration system, the title register will be the conclusive evidence of the title. Compared to the present deeds registration system which gives no guarantee to title, the title registration system will provide greater assurance and certainty of property titles. However, in order to convert land currently registered under the deeds registration system to the title registration system, a relatively detailed verification of title would be needed. The aforesaid conversion would also involve other important matters including rectification of title registers and indemnity arrangements.
Therefore, the Government has put forward the proposal of Two-Stage Conversion Mechanism, under which existing land will automatically undergo the first stage primary conversion and be brought under the Ordinance on a designated date; after a 12-year period, the land (unless subject to any restriction against conversion) will automatically undergo the last stage full conversion and be fully converted to registered land under the Ordinance. During the primary conversion period, the Government will conduct basic screening on the title chain for existing land registers. If cases of broken or multiple chains of title is identified, such affected land or property can only be converted until the relevant title issue is resolved. We have been liaising with the stakeholders (Note 1) and explaining the proposal and the importance of the Two-Stage Conversion Mechanism, yet are unable to reach full consensus on the conversion mechanism or the relevant arrangements (viz. relevant title register rectification and indemnity arrangements).
To enable early implementation of the title registration system, the Government has proposed to implement title registration on newly granted land first (i.e. the "new land first" proposal (Note 2)). The "new land first" proposal will secure an early implementation of title registration in Hong Kong, enabling industry practitioners and the public to benefit from the new system as early as possible. Compared to the implementation of the Two-Stage Conversion Mechanism concerning conversion of existing land, the implementation of title registration on new land is relatively straightforward. The Government expects that the actual experience gained from the implementation of the "new land first" proposal will facilitate the Government and the key stakeholders in reaching consensus in the discussions on conversion mechanism and related matters, thereby expediting the implementation of title registration system on the existing land.
All key stakeholders have expressed support in principle to the "new land first" proposal. To take the matter forward, the Land Registry is preparing for the relevant law drafting work, and strives to reach consensus with the key stakeholders on the remaining implementation details, such as issues relating to verification of registration applications by solicitors and indemnity arrangements, etc. We plan to consult the Panel on Development of the Legislative Council on the said proposal in around fourth quarter of 2022, with a view to submitting an amendment bill to the Legislative Council as early as possible.
(3) To further improve the property registration mechanism in Hong Kong, the Government has strived to implement title registration system as adopted in other comparable common law jurisdictions, and hence been advocating the "new land first" proposal for early realisation of benefits of the title registration system. The Government believes that the progress of the relevant system will bring positive impact on improving the business environment in Hong Kong.
(4) According to information available online, although many common law jurisdictions/countries have adopted the land title registration system, certain jurisdictions/countries are still adopting the deeds registration system, including some parts of Canada. In addition, in jurisdictions/countries that have adopted the land title registration system, not a small number of lands have not fully completed their conversion to the title registration system, for example, England, Wales and Scotland.
Note 1: Including the Consumer Council, Estate Agents Authority, Heung Yee Kuk, Hong Kong Association of Banks, Hong Kong Bar Association, Hong Kong Mortgage Corporation Limited, Law Society of Hong Kong and Real Estate Developers Association of Hong Kong.
Note 2: "New land" generally refers to land granted by the Government on or after the commencement date (a future date to be specified) of the Ordinance and will include land granted by way of land sale (auction or tender), private treaty grant and land exchange.
Ends/Wednesday, June 8, 2022
Issued at HKT 11:25