If you own land in Minnesota, land ownership is recorded in the County in which the real estate is located by either the County Recorder’s office through the Abstract system or the County Registrar of Titles through the Torrens system. Most landowners, if asked whether they have an Abstract of Title or a Certificate of Title for their property, may not know one way or the other. The Abstract system and the Registered Torrens system essentially serve the same purpose: to keep track of land ownership. Both systems are adequate in identifying ownership. Yet, there are significant differences between the two systems that impact the rights of a landowner.
The most common is the Abstract system. When an owner of Abstract property conveys title to property, mortgages, or does anything that affects title, a document is filed with the County Recorder. When Abstract property is sold, a title company will typically update the Abstract of Title, which is a record documenting the history of land ownership. Abstracts account for the very first conveyance of the property, sometimes all the way back to the time when the United States government issued a land patent. To the learned and professional eye, the Abstract should reveal any liens and encumbrances as well as ownership of the property.
The other less common form of keeping track of land ownership in Minnesota is called the Torrens system. An Abstract of Title is not necessary in the Torrens system, and the land owner holds a Certificate of Title that simply lists the land owner and current encumbrances.So what’s the big deal? Why should anyone care whether their land is Abstract or Torrens?
Under the statutory law in Minnesota, a land owner of Torrens property is assured that no one else has any claim to the property. The Certificate of Title is automatically deemed to be accurate and irrefutable. Again, rather than a confusing historical chronological listing of all property owners and mortgages which is often the case with an Abstract of Title, a Certificate of Title very simply lists the owner and liens or encumbrances known at the time of conveyance of title. In that sense, Torrens title is similar to the title to a motor vehicle.
Once property is registered Torrens no one may gain adverse possession or prescriptive easement rights against the title. With Abstract property, it is possible to lose title to your land due to a hostile takeover from a neighbor through adverse possession. Adverse possession, also commonly known as “squatter’s rights”, is a legal remedy that, if certain legal standards are met, allows someone other than the owner to acquire title to the owner’s land. In addition to the protections against adverse possession, Torrens property also shields your property from any claim of prescriptive easement rights.
Similar to adverse possession, under certain circumstances another person using your land could also obtain a prescriptive easement. The main difference is that with adverse possession the record owner loses title whereas with a prescriptive easement the owner retains title to the land but it becomes burdened by the easement. This is particularly important for lake properties. For example, a neighbor claiming that he or she has continuously stored his or her dock on your property during the winter months for more than 15 years could be awarded prescriptive easement rights by the Court that run with the land (allowing future owners to continue such use of your property). A prescriptive easement claim could prevail with Abstract property; on the other hand, such a claim could not be successfully made against Torrens property.
If there is any concern that a neighbor may attempt to acquire title or prescriptive easement rights to your land by simply using it, registering your land as Torrens is one preventative measure that may, at the same time, avoid a potential land dispute with your neighbor.
*This article does not constitute legal advice and is not intended to constitute advertising or solicitation for legal services. Nothing in this article should be construed by you as a source of legal advice. You should not rely or act upon the contents of this article without seeking advice from your own attorney.