Which way is the right way to ensure property rights?

[DavidOdden]

I think you underestimate the dufosity of some people.

Unfortunately, no. But their problems are not my problems, unless of course as under the current and future regimes their failures become my responsibility to fix up.

However, I am sure that anyone taking out a loan to buy real estate would have the decision made for him by his lienholder, in much the same way that lienholders decide that you shall carry insurance.

I would certainly hope so. But I understand that 100% mortgages are or were not bizarre anomalies, so all I can say is whatever the situation, be sure to get title insurance! (There was a case in the local news recently where a guy lost a potload of money because he couldn’t be bothered with title insurance, and the government’s title search was just wrong). It’s like not getting fire insurance for your house: why would any sane person take a risk.

It sounds to me like the question is not: would such a registry be useful, but rather should such a registry be mandatory?

It seems to me that the only things that should be mandatory (required by law) are those things that if you don’t do them, you violate someone else’s rights. So like fire insurance, you really should get it, and if you don’t, you’re not violating anyone’s rights.

And another question–is such a registry so much a part-and-parcel of contracts enforcement that it’s actually the government’s role to do it?

If not, presumably, private entities can compete for the business.

The “(en)force” part is government business, but not everything relevant to contracts (which can be enforced) are therefore government business. When there is a contract dispute and there’s some question of fact which has to be resolved to decide the case, the involved parties have to get that fact resolved. The government doesn’t step in and provide the evidence. So the fact of registration is a material fact bearing on whether such-and-such is a person’s property: the interested party should bring forth any and all evidence that is relevant to that conclusion, and the job of the courts is to come to a conclusion based on the evidence presented to the court – it is not the governments job to present evidence. Registration is an evidentiary matter, which the interested parties need to take responsibility for.

A more difficult one: Lets say some scam artist starts a registry, collects a few legitimate registrations, waits a few years, then inserts some phony deed giving him ownership of the Empire State Building into the registry? Since there is no single recognized authoritative registry, his claim to it is just as good as the guy who has had a deed for it registered with another company for the last five years.

I don’t know what the most efficient way to run such a business would be, which prevents such misuses. The problem of a scam-artist registry and corrupt government clerk are pretty much interchangeable in that respect. I think perhaps some clues from the realm of computer security would be applicable, since exchanges on the interwebs frequently involve the question “Are you authentic?”. Insurance is part of the key, I would think. As a matter of course, a person would no doubt purchase registry-insurance that insures the authenticity of the registration. That is a warrantee of reliability issued by the insurance company (backed up with their liability) which affirms that the registration is authentic. Of course you are totally screwed if the registration company is fraudulent and the insurance company is fraudulent, but you’re also totally screwed if the clerk is corrupt and the judge is corrupt.

[Zip]

It is nonsensical to me that such an unwieldy process and arrangement as the one David describes would exist.

First lets look at the idea of private registry. From the start the problem I see is that there isn’t going to be 4 or 5 registries in a country of 300+ million but many many more. I’d guess you would probably get as many registries as you have insurance companies today, which Goooogle tells us is 253,486.

Governments job is to protect rights chief among which are the right to life, liberty and property. Now I realize the the governments protection does not include government legislation but in the interest of utility and in keeping with LFC system I can not think of any reason that the government couldn’t ensure titles (i.e. run a property registry) in order to protect the rights of all those involved.

David spoke at length about the wish for privacy. I wonder which way would ensure that privacy better, a single registry with millions of users and the resources to ensure security, or a small privately owned registry with a handful of users and perhaps not as much to be spent on the security of the data.

What happens if your registry company goes out of business because it had perpetrated a property fraud like issuing a false title? Who is going to accept a deed from that company?

In order to sever a piece of property one would have to get a Lawyer and have it done legally. With all the proper paperwork done (title search, search for liens) a judge should be able to create 2 deeds for the severed property and then destroy the first one.

In my opinion a property registry would be a proper function of government either at national or 2nd tier level (state/province/whatever). The government control of it would also generate money that would be used to support it’s other legal functions.

Food for thought: It would be entirely possible for private companies to handle the logistical and administrative functions of such a registry but I would feel much better if my title was secured by government.

[DavidOdden]

It is nonsensical to me that such an unwieldy process and arrangement as the one David describes would exist.

I think the nonsense lies in the idea that Capitalism is an impossible political system and that the free market is fundamentally unworkable, that free choice and individual responsibility for one’s actions are so difficult that we need to be protected by the wisdom of government force via regulation.

First lets look at the idea of private registry. From the start the problem I see is that there isn’t going to be 4 or 5 registries in a country of 300+ million but many many more. I’d guess you would probably get as many registries as you have insurance companies today, which Goooogle tells us is 253,486.

Supposing that your number is true (I think you’re confused about the difference between an “insurance company” i.e. an underwriter and an “insurance agent”), shouldn’t this show you that the “too many companies” argument is flawed at its core? We are not dying in the strees because insurance is a competitive business. Why would property registry be different?

Governments job is to protect rights chief among which are the right to life, liberty and property.

This is a misunderstanding of the role of government. The proper role of government is to place the use of force under objective control, for the purpose of protecting rights. It is not to “do whatever is necessary to protect rights”. See “The Nature of Government” for clarification. Locks and alarm systems are useful for protecting rights; they are not government entitlements or obligations. Similarly, it is not the function of government to provide attorneys even though they are important in the protection of rights.

Now I realize the the governments protection does not include government legislation but in the interest of utility and in keeping with LFC system I can not think of any reason that the government couldn’t ensure titles (i.e. run a property registry) in order to protect the rights of all those involved.

By appeal to “the interest of utility”, one can also justify the government regulating pharmaceuticals or establishing a minimum wage. As to whether the government can establish an optional registry that competes with privately run ones and which individuals may patronize if they wish, the answer to that question is the same as the question whether the government can properly establish insurance companies that compete with private companies, can establish voluntary shoestores that compete with Shoes R Us, and can get into the competitive car manufacturing business.

David spoke at length about the wish for privacy. I wonder which way would ensure that privacy better, a single registry with millions of users and the resources to ensure security, or a small privately owned registry with a handful of users and perhaps not as much to be spent on the security of the data.

You’re addressing a separate question. My point was simply that a person has the right to privacy, that if he does not wish to make it a matter of public record what he owns, that is his business, and that ownership is not a social fact contingent on society at large knowing that you own certain property. It’s empirically clear that government incompetence is a major source of actual security breaches, so on practical grounds there are also good reasons to not have the government be in charge of property records.

What happens if your registry company goes out of business because it had perpetrated a property fraud like issuing a false title? Who is going to accept a deed from that company?

First, read my comments about title insurance. Second, answer the question who is going to clean up the mess if a government clerk is incompetent or corrupt. The point which you’re failing to grasp is that this is an evidentiary question. You seem to be thinking that the government somehow actually creates and grants the property, which is absolutely the wrong way to look at it. “Property” is a fact that is independent of government action; the point of registration it to provide evidence of that fact. Well, there are lots of ways to provide evidence.

In order to sever a piece of property one would have to get a Lawyer and have it done legally.

Sorta. The same goes with making a will or writing up a contract: you have to get a lawyer and have it done legally. Or take your chances on homebrew.

It would be entirely possible for private companies to handle the logistical and administrative functions of such a registry but I would feel much better if my title was secured by government.

Why? Do you have more confidence in government bureaucracy than in private enterprise?

[Grames]

The idea of competing deed registries has the same flaw as competing police forces: it breaks down at the first conflict. A registry has no value unless it has some claim to being official and enforceable. With no mechanism to reconcile conflicts short of going to court, competing registries will actually multiply the number of conflicts and court cases. No one would ever have confidence their land claims were secure until they were successful in court.

Secret ownership works fine until you get neighbors trespassing across your plot, or squatters working your land. Then you face the choice to come out and defend your claim or walk away from it. There is no way to secretly defend your claim. At least the judge and defendant must know the plaintiffs identity, and if the case goes to trial it should be a public trial. So technically deed registration does not need to be mandatory because it is a self-enforcing requirement as needed.

While searching for examples on the internet I came across the Singapore Land Authority which has two systems in place: a voluntary deed registry covering the rural areas and a mandatory system for use inside the city.

Registration of Deeds

The Registry of Deeds, which administers the Registration of Deeds Act and its rules, keeps a record of deeds lodged against land held under the old Common Law system of land registration. Today, there are hardly any deeds lodged at the Registry of Deeds.

Under common law, interest in land is passed by the act of the parties, that is, when a deed is signed, sealed and delivered. Under the Act, it is not compulsory for owners of land to register the deeds at the Registry of Deeds.

However, most deeds are registered in the Registry of Deeds as it offers priority to a claimant under a deed as against other potential claimants to the land. Failure to register a deed under the Registry of Deeds means that it cannot be produced in a court of law as evidence of title to the land.

So if you tried to defend your secret ownership in Singapore without a title against a newly lodged claim to your land you would be in real danger of losing. The homesteading principle might help your claim if you actually occupy or work the land but if it is vacant it is probably lost. (But then, if you actually occupy or work the land what was the secret?)