Reform of the Land Registration System in Hong Kong

The current land registration system in Hong Kong is the Deeds Registry System, which is governed by the Land Registration Ordinance (Cap. 128). This system regulates the priority of registered instruments but does not provide security of title to property. In other words, even if a property is registered in the Land Registry (commonly known as the Land Registry), it does not mean that the owner of the property has an unblemished title to the property. Therefore, the solicitors of both parties will still need to check the historical deeds of the property during the sale and purchase process to confirm whether the title of the property is in good standing. This is often a time-consuming and complicated process, especially for properties that are old or have changed hands many times.

To address these problems, the Hong Kong Government passed the Land Titles Ordinance as early as 2004 with the objective of implementing a title registration system to improve the current land registration situation. However, due to various reasons, the new system has not been fully implemented so far. Recently, the Government has planned to adopt the “New Land First” approach to register the title of newly granted land first, in order to prepare for the full implementation of the system in the future.

Deeds Registration System vs Title Registration System
As mentioned above, under the existing registration system, the instrument of registration of a property only serves the function of record and inspection, and has no legal effect to ensure that the property is in good title. Therefore, when buying or selling a property, the buyer's solicitor has to conduct detailed “Question and Answer” to confirm the legality of the transaction and the integrity of the title.

In contrast, the title registration system is simpler and more transparent. Once a property owner has completed the registration of title, he or she will be deemed to have unblemished title to the property without the need to repeatedly check the historical deeds of the property in each transaction, which can greatly shorten the transaction time and minimize the risk of the transaction. This system has been successfully implemented in common law jurisdictions such as the United Kingdom, Singapore and Australia, providing more legal protection for both buyers and sellers.

New Land First Measures
According to the Government's plan, the new system will first be applied to “new land”, i.e. land newly granted by the Government. It is expected that about 5,000 land registers will be involved in the electronic registration process under the new system each year. The Government also plans to launch an online platform to allow the industry to make registration applications electronically to enhance efficiency and accuracy. The platform will use “Smartphone” as an authentication and digital signature tool to facilitate land registration operations by buyers, sellers and solicitors.

Advantages of the title registration system
The implementation of the title registration system will help enhance the efficiency and transparency of the sale and purchase of buildings and ensure that the interests of both parties to the transaction are safeguarded. Under the new system, the ultimate owner of a property will be clearly recorded in the register of the Land Registry, and owners can obtain compensation through the Indemnity Fund set up by the Government in the event that they discover defects in ownership. This arrangement will not only minimize transaction disputes, but also enhance transaction certainty.

Advice to property buyers
The sale and purchase of a property is a major investment in life and the amount of money involved is usually very substantial. Buyers are therefore advised to make sure that they are represented by experienced lawyers with specialized knowledge in the transaction. A solicitor will not only assist in the vetting and negotiation of the deed, but will also ensure that the title of the property is in good standing during the title search process, thus safeguarding your future property security.

Feel free to contact our team of specialized lawyers for any questions related to land title registration. We will provide you with the most professional and reliable legal advice according to your needs to ensure that your rights and interests are fully protected.