Learn how these two countries converted their land records online and the lessons that the U.S. can take from their experience.
by Lesley Hill
Human beings, no matter what country we live in, like paper. Nowhere is this truer than with the legal documents that give us title to our own homes. But paper documents need to be physically transported, and transportation is slow—too slow for the modern world. The U.S. is on its way to paperless closings. However, England and New Zealand may be one step ahead. Why? The reasons for this are varied, but most relate to size both in terms of population and geographic area (see sidebar), and systems of government. Both England and New Zealand have strong centralized governments, which enable national directives to be enacted. Even though this gives an edge to England and New Zealand, there is much that the U.S. can learn from the process it took to move records online.
As many of you are no doubt aware, the move from paper to electronic format is not an overnight transformation. It takes time, but time that is well spent in the long run. Here’s a look at the systems being used in England and New Zealand.
Land Register Direct—The UK Experience
The UK’s Land Registry (a government agency) deals with land registrations and title deeds for property in England and Wales. Similar to the U.S., the UK is undergoing a move to e-government at all levels. Although the UK’s e-government initiative requires all government agencies to operate e-government services by 2005, a number of other factors contributed to the UK Land Registry being able to offer online services today.
The first key move came during the 1986-1992 time frame when all Land Registry district offices in England and Wales were computerized. In 1990 the Lord Chancellor (a British officer of state who presides over the House of Lords) made it mandatory for any land transaction throughout England and Wales to be recorded electronically. In the same year he also made the electronic records open to public inspection—they had previously been private. At about the same time, the Law Society (much like the ABA in the U.S.) asked for e-access. Opening the Land Registry to everyone facilitated the move to e-access.
|Some Facts and Figures|
The Land Registry started a prototype to view land records online. Named “Direct Access Service,” it was tested with three clients—a bank, a building society (savings & loan), and a solicitor (attorney). Proving popular, it was expanded, so that by 1995 there were between 300 to 400 organizations using the system.
The initial growth in use of the Direct Access Service occurred very quickly. To deal effectively with potential demand, the Land Registry decided to outsource the management of the service and its network. They bid out the project and awarded a contract in 1997 to Racal Telecomm (subsequently bought out by Global Crossing in November 1999). The Direct Access Service was provided on an account basis and used dial-up access, via a secure extranet.
In July 2000 Land Registry Direct, a service using the Internet, was launched after a year of working on a browser version of the Direct Access Service. (Go to: www.landregistrydirect.gov.uk for a demonstration download.) Land Registry Direct gave more opportunities to view registers, documents, and plans online, but for full online service, a number of different things needed to be accomplished.
First, the documents needed to be converted to electronic format. For the Land Registry this has been a mammoth, ongoing undertaking—some 19 million registers and title plans and 10 million filed deeds and documents (with more than 100 million pages). A project was undertaken toward the end of 1999 to bulk-scan the filed documents. It should be completed in November 2004. It is planned to scan a further 10% of total images, or about one million scans, annually. The title plans were also bulk-scanned, which was completed in 2001. Most B&W images are stored as 1-bit TIFFS. Color and some poorer quality B&W images as 24-bit JPEGs. Image sizes vary considerably from 32KBytes to over 10MBytes when stored, and from less than 1MBytes to over 300MBytes when displayed. For comparison purposes, an average text page is 50KBytes. The images are stored in a DB2 database in a hierarchical structure of Document/Page/Image data—the image data is split into 32K chunks and reassembled when required for viewing. UK Land Registry has been registering land since 1862 when towns literally started with plan #1, plan #2, etc. As it became apparent that plan #1’s were proliferating, the counties started prefixing with a code for the town. For example CB#1 refers to Cambridge #1. Nowadays up to a nine character index is used, with two to three alpha characters, and the remainder numerical.
The second thing that needed to be done was to enable the end user to view the documents. Text documents did not pose a problem, but the maps did. The UK Land Registry’s title plans are based on the latest available editions of the Ordinance Survey Map, which are extremely detailed, accurately scaled maps for all areas of England and Wales. A comparison is made with the title deed, and red lines show the extent of the registered land. The difficulty with maps is finding a mechanism that provides both necessary functionality and speed of download. This is important because of the size of some of the images, and the viewing tool originally used by Land Registry could not handle the large file sizes. The Land Registry found a product that could handle these files via an Internet search—Onstream Systems’ Trapeze software (www.onstreamsystems.com). Trapeze allows for speedy (up to ten times faster than other technologies) downloading of maps by creating a multilayered file from the colored image maps, which is a fraction of the size of images in the usual format. The files are small, clean to view, and very quick to transmit online. The viewer has a free download of the latest version of Trapeze to view the title plan, which expands the basic viewing functionality to enable rotation and zooming in/out, gives a scaling tool, and permits online measuring, in many cases to scale, as well as potentially allowing printouts to scale. Most Land Registry maps are 1:1250 or 1:2500 scale, so that the ability to cope with scale while viewing online is an important consideration.
The final strand in ensuring the success of Land Registry Direct was to get people to use it. Land Registry’s services are used by many different organizations: solicitors, banks, building societies, insurance companies, government departments, railway companies, corporations, etc. Few of these are known for their warm embrace of anything new; in fact most have a reputation for sticking with the tried and true— some 19% of UK Land Registry inquiries are still made via the postal service. The postal service route takes time, approximately 7 to10 days for the request to arrive, be processed, and the required documents to be delivered to the requestor. Land Registry Direct also competes with Land Registry’s own popular phone service, which allows phone requests for the same information. Forty-six percent of the overall preliminary searches are conducted after a phone request. However, the search results from telephone transactions still have to be mailed out in hard copy format.
Land Registry’s contract with Global Crossing runs at least until September 2005. The Global Crossing extranet service requires an initial charge per user ID (UK£100, US$180) plus the fee for any required documents. The initial fee charged by Global Crossing has historically proved something of a barrier to use of the service, so since March 2004, Land Registry has been providing a new version of Land Registry Direct that runs securely over the Internet (still using Global Crossing) but makes no initial charge to the end user (although fees still apply). This latest version of the service is proving immensely popular.
In addition to reduced fees, Land Registry Direct offers far faster access and retrieval of documents and title plans than Global Crossing’s extranet service or requests made by phone. Using a fairly common 56K modem, it takes about 37 seconds to download a 250K file; using faster Internet access the same task can be done in just a few seconds.
Land Registry Direct has brought several cost savings to the UK Land Registry, most notably in the area of clerical costs and postal and printing charges. The UK has recently undergone a housing boom with a large increase in borrowers; much like the U.S. has with the refinance boom in 2004. Land Registry Direct has experienced a 45% to 50% year-on-year growth in demand for its services since 2000, but without a corresponding increase in costs.
An End User’s Perspective
Hugh James is one of the UK’s leading law firms, with headquarters in Cardiff, Wales. Land Registry Direct has made a major difference to the law firm in the processing of mortgage and re-mortgage applications for some of the UK’s largest building societies, including Halifax and Abbey National. According to Joanne Morris, senior associate at Hugh James, their office used to call the Land Registry or issue postal requests to order the required title deeds and registration papers and then had to wait two to three days for their postal delivery. Now they log in more than 2,000 times a month to download the required documents instantly. This has made the staff much happier since there is no longer a need to flag the various files—the documents can be immediately retrieved and processed. It has reduced costs and processing times as well, which has made the lenders and their clients happier. More important, it has also enabled Hugh James to handle the huge property boom of the past year in a timely manner with no increase in staff. As Morris commented, “Land Registry Direct has allowed Hugh James to reduce cost and increase the speed and efficiency of collecting property information—as soon as we receive instructions, we can process the work.”
LINZ—The New Zealand Experience
LINZ (Land Information New Zealand - www.linz.govt.nz) is New Zealand’s central Land Registry (also a government agency). LINZ holds the information about land surveys and ownership, topographic maps, and nautical charts. The agency also ensures that the rating (property tax) valuation is fair and consistent and oversees the buying and disposal of Crown land. Land titles and survey processing services are provided by the customer service staff in the LINZ regional offices throughout New Zealand. The national headquarters office provides system, service, and support delivery management. Landonline is LINZ’s secure access service to provide New Zealand’s only authoritative titles register and digital cadastre (the official register of the quantity, value, and ownership of real estate used for taxation and other purposes). Only registered users may access the system, which provides secure electronic title and survey transactions in real time, automating and speeding up traditional (and sometimes prolonged and complex) manual processes. Landonline provides three different tiers/types services:
e-search—This is the most frequently used service, particularly by search agents, lawyers, and conveyancers. It provides access to the titles register and survey data in image format and supporting documents, but it does not include any access to spatial data. Access to spatial data can be obtained with an enhanced service e-search plus.
e-dealing—This service, which includes all of the features of e-search, allows for electronic conveyancing. Title instruments and changes to titles can be registered electronically, including transfers of ownership and registration and discharge of mortgages. Again, if the spatial data is required, the service has to be upgraded to e-dealing plus.
e-survey—This service is for surveyors and includes all of the features of e-search plus, allowing the electronic submission of cadastral survey datasets.
The services of Landonline also allow local authorities to certify the cadastral survey datasets online via TA e-certification. This certification online can be done regardless of whether surveyors submitted their work in paper format or online via e-survey, as LINZ captures the images of the paper plans and makes them available online.
As with the UK’s experience, the full process of being able to offer the above services took considerable time—some five years to convert over Seven million physical records of titles, title instruments, plans, parcels, and geodetic survey marks dating back over 150 years, into the digital records that are held in Landonline. New Zealand also chose Onstream Systems’ Trapeze suite of products as this was the only company they could find to provide an imaging system to lay over their document management system and that would customize the system to suit their requirements. It involved close collaboration with all parties involved, including surveyors, lawyers, conveyancers, and local authorities.
Today all items are processed straight into Landonline. The only documents that are unavailable via Landonline are those that are either too fragile to convert to digital records, too large, or too infrequently accessed. This means that whenever users log on, they receive the most up-to-date information available. The distinction between historical and current documents is clearly identified, and converted records are easy to read, reducing the time and hassle of deciphering old handwriting or faded documents.
Comments on Landonline
Here’s what one Landonline user, Guy Mortlock, of Hensley Mortlock Lawyers, Christchurch, NZ, had to say: “I think e-dealing is the way of the future—it’s definitely the way conveyancing should be done. We were one of the Landonline pilot firms so we’ve been involved from the beginning. Now we use it for a number of transactions every week, without any problems at all. It’s become part of our everyday practice.
“It’s faster, cheaper, and more efficient. I’d like to see others using e-dealing far more, sooner rather than later, so we can process more two-party transactions. That way we—and others—would really get the full benefit.”
Lessons To Take Away
The United States, with its over 3,000 counties, faces problems of a different magnitude, especially since there is no government entity taking on this project. However, there are some lessons that title companies in the U.S. can benefit from in their quest to move records online:
Lesley Hill is a partner of Harvey Spencer Associates. She can be reached at firstname.lastname@example.org or 631-368-8393.