eLand Registration in Sri Lanka; A pathway for the mother of all scams? By Raj Gonsalkorale
Glory of technology is such that no one will object to introducing technology to land registries. But will the land owners have their rights protected? We only admire the glory of technology as a duck gliding on water without seeing the paddling underneath. Land owners need to be alerted that their ownership rights may not be available in the land registry
By Raj Gonsalkorale
eLand registration will soon be operating the land registration system to secure ownership. However, it can be a source of ownership insecurity, without consumer protection laws. The risk involved in the absence of consumer protection laws to protect owners was demonstrated in USA, when New York News Paper prepared a forged deed to transfer the Empire State Building. The forged document was registered in 90 minutes, the land registry had no laws to protect owners, therefore did not recognize that 102-story Art Deco skyscraper was being sold to a new owner when the information in the deed was laughable: Original; “King Kong” star Fay Wray listed as a witness to the deed and the notary’s name was a bank robber’s name Willie Sutton. https://www.nydailynews.com/news/money/90-minutes-daily-news-steal-empire-state-building-article-1.353477] – Kirthimala Gunasekera, Senior Lawyer writing in LankaWeb
Ms Gunasekera goes onto say “In modernization and introduction of technology to land registries consumer protection law takes a leading role in many countries. Professors of law have published many books on the subject. It needs mentioning here that professional practice and land registry laws with steadfast and limitless laws and rules for identification of owners for consumer protection has been the reason for the success of eRegisters in Australia, New Zealand, Singapore and UK. Where the law requires thorough identification checks and strict requirements for witnessing documents before the execution of transactions as given in this article. In Sri Lanka attention was not given to introduce the international laws that protect owners in an eRegister, even when land fraud is extremely pervasive. However, we are fast moving to introduce technology to land registries”.
Unreliable source documents that makes the eRegister unreliable
In Sri Lanka, the problem with registering land electronically is that it is using as source documents from an unreliable register that commenced in 1864. The registration system has opted to circumvent due diligence with a quick fix solution scanning the names of owners from an unreliable old register which 1] is a non-compulsory register- where all the ownership rights of land owners are not registered. 2] is torn, mutilated and in a state of disrepair as the register had not been revised since 1864, and above all, it has fraudulent entries, according to the Registrar General himself who stated publicly that it has 50% forged deeds.
It defies logic as to why the authenticity of what is in a decrepit register is not being addressed before transferring a staggering 50% fraudulent ownerships to a new electronic register. The intended process is like converting black money into white and it insults the intelligence of Sri Lankans. It does raise doubts whether there is any intelligence left if such a pathway is being created for a mass scale scam.
Not surprising considering the country has already boasted of several mega fiascos, with the Bond scam, the Sugar fiasco which resulted in a loss of revenue amounting to Rs 15 Billion to the country, and the latest drama, the Coconut oil fiasco. In true Yes Minister/Prime Minister style, commissions of enquiry are looking into some of these fiascos, many suspect with well-founded scepticism, that nothing will come out of these enquiries. Perhaps, there might be yet another enquiry to look into this potential scam, but very likely after many would have benefited with ill-gotten gains from fraudulent land transactions. Horses in stables are not foolish enough to stay inside if the doors are kept wide open!
Owners who have not checked the land registry after they had purchased lands or houses need to check their ownership status in land registries to be safe.
In this black comedy, the Registrar General in his letter dated 6.04.2016 to the Prime Minister’s office confirms that that the registration of deeds is not compulsory under the law governing registration as the land registry is not the place to determine ownership. He explained in his letter that the folios of the old register does not give conclusive evidence of ownership and that ownership to land under the present law has to be determined by examining the deeds of owners.
The World Bank examining and researching the land laws of Sri Lanka, considering that Sri Lanka does not have a permanent research group as in other nations, was aware that Sri Lanka did not have a reliable register to introduce the eRegister. A Grant in the amount of SDR 3.9 million (US$ 5.0 million equivalent) was given to the government of Sri Lanka for a land titling and related services project march 22, 2007. http://documents1.worldbank.org/curated/en/293851468308634964/pdf/ICR0000190.pdf.
Bim Saviya land registration system, legislated in 1998 at the behest of the World Bank, and without consultation with Sri Lankan lawyers, and introduced in 2007, has been a complete failure. The Government Title Commissioners Report for 2019 states that it will take over 100 years to complete the register. (https://www.parliament.lk/uploads/documents/paperspresented/performance-report-land-title-settlement-department-2019.pdf].
The Bim Saviya is unsuitable for Sri Lanka as the owners’ right to access court if the lands are affected by forgery or fraud have been taken away by this law. In lieu Government has agreed to compensate owners from an Assurance Fund
Can lawyers help? No they are helpless
A case in point is a colleague of a lawyer who was arranging to sell her land and had been told by the lawyer that her ownership is not recorded in the land registry and her land is not marketable. She reached out to the officials to see whether Bim Saviya could help, and she had been told that it may be possible but it will take over one year to do so. Even lawyers have found that they are helpless, the land ownership had been misplaced, and the land registry had informed in writing that folios were damaged. The effect of this is that only land deeds where folios are not damaged will be included in the eRegister. This, along with the Registrar Generals contention that s much as 50% of deeds could be fraudulent means that what would be transferred to the eRegsiter are mostly fraudulent deeds.
If the Registrar is not responsible to owners, is it worth registering land?
In Sri Lanka the Registrar is not responsible and has no authority other than to register deeds in the existing decrepit register irrespective of whether they are valid or invalid deeds. The present law is that the Registrar is not responsible for the validity of deeds that are registered as per Section 7 of the Registration of Documents Ordinance. For that matter even if a fraudster declares he is the owner with a notarised deed called a Deed of Declaration, the Registrar will register the deed of declaration to displace the true owner, who had paid good money for the land. The Registrar cannot be sued for registering fraudulent deeds to displace owners as in other nations. Yes, we only admire the glory of technology as a duck gliding on water without seeing the paddling underneath.
It needs to be mentioned here that all countries where the eRegister is a success has enacted consumer protection laws [In Australia, New Zeeland, Singapore and UK]. The Registrars have quasi-judicial powers to check owners’ identity before removing and replacing owners in the eRegister, and the Registrar has the full power and authority to reject forged invalid deeds.
Prior to proceeding with this easy ladder to furthering land fraud, steps have to be taken to ascertain the true status of the existing register and a team of lawyers must be appointed to advise the Task Force that is in charge to bring in consumer protection law recognised internationally in order to protect land owners and buyers from fraud.
The Minister of Justice is urged to direct the Task Force responsible for introducing the eRegister to immediately make a public announcement at least to alert owners to look into their rights in the existing register, and make sure their rights are included in the old register.
A public announcement is necessary as the eRegister
1] Will exclude owners who have unregistered ownership deeds, gifts, life interest, lease hold interest, servitudes, Agreements to sell etc.
2] Will exclude those who have their extracts damaged A public announcement is essential for owners to immediately make their application under the Ordinance 18 of 1945 to reconstruct the damaged mutilated folios. The Registrar has power under the Ordinance 18 of 1945 to prepare and reconstruct the folios to re instate the names of owners.
3] Will include fraudulent owners in lieu of the true owners. As owners believe that deeds in their possession will protect their rights and be automatically get registered in the e register.
This is an essential pre requisite in order to ensure that the source material that is to be used in the eRegister is authentic, and the rights of land owners is protected.
Technology must protect owners from land fraud and it should not advantage fraudsters.
ICTA [ Information Communication Technology Agency] and the Government Task force responsible for the eRegister need to look into this serious matter as technology should be installed to protect owners, not fraudsters. Assessment of fraud and strenuous research for legal solutions to prevent fraud had been the priority in all countries, before introducing an eRegister. Ms Gunasekera in her article had mentioned them. Sri Lanka should make use of their research as owners require protection not mere speed of registration which will be beneficial to fraudsters as shown in the demonstration by USA
It is time that the Minister of Justice took the leadership
- To preserve the Section 23 of the Electronic Transaction Act 19 of 2006 which states that the Act 19 does not apply to land transactions and a valid paper deed is essential to own land, especially when there are no laws to protect owners in a registry, a paper deed becomes essential and
- To repeal the divine loophole available for fraudsters in the Bim Saviya law given in Section 33, which states that the eRegister is conclusive evidence of ownership that cannot be questioned in a court of law. This takes away the fundamental right of an owner to obtain redress from court when affected by fraud, in other words give up their rights to the fraudulent owner.
It is sound advice for the Minister of Justice, in the arena of land law and land registration, to emulate Dutch philosopher Desiderius Erasmus, who in 1500 coined the phrase “prevention is better than cure”, and take firm, affirmative action to prevent what could become a massive scam, and besides that, an unprecedented human rights violation.
