The Importance of Registering Property Ownership with the Authorities

In many real-estate transactions it is common that, for various reasons, the parties are not careful to carry out the registrations in the Land Registry [or in any other registry customarily used in the area where the property is located] in accordance with the contract, and they   are unaware that because of this  there may   be consequences whereby, according to Halachah [and also according to civil law], they could lose the property. And there have come   before me several cases in which, due to registration  not in accordance with the contract,  the owners   lost properties. Therefore, in every real-estate transaction, one must always be careful to complete the registration with the authorities in accordance with the ownership agreed upon between the parties .

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The difference between a contractual right and a proprietary right

One must know that there are two types of rights in real estate — a right of ownership and a contractual right. When a sale contract is signed, even if a cautionary note has been registered, this is a contractual right. But when the property is registered in the Land Registry, the registration itself creates the proprietary right, and the registration is considered conclusive evidence of its content.

The contractual right concerns the relationship between people as a result of negotiations between the parties. The proprietary right is a right vis-à-vis the entire world; that is, the contractual right is perceived as a weaker right compared with the proprietary right. Therefore, in general, in a conflict between a contractual right and a proprietary right, the proprietary right will prevail.

Discussion among the poskim regarding ownership by a couple

This matter is discussed at length by the poskim [as will be explained in the sources] regarding a couple who marry, where one side gives more than the other, yet in the registrations the property is recorded in the names of both spouses equally. When the marriage breaks down, disputes arise between the parties: who is the true owner of the apartment — according to the registration, or according to how much each side paid [in a case where there is no dispute as to who paid and how much].

There are several approaches as to how batei din rule in practice today: some rule according to what is registered with the various authorities, regardless of how much each side invested. Others rule according to what each side invested, even if the authorities recorded it differently; and there are further opinions, and the matter depends on the discretion of the dayanim. [I have written at length about this in Torat HaMishpat.]

The importance of registration with the authorities

It should be noted that the process of a real-estate transaction is completed by registering ownership of the property, and this is one of the most important elements in a real-estate transaction. The meaning of the registration is that the person who appears in the Land Registry extract, or in the Administration in Judea and Samaria, or in the place of registration customary in the area, is the owner of the property; this determines ownership of the apartment. Failure to complete the process of registering the apartment in the Land Registry can impair the purchaser’s rights, making it difficult to prove ownership, and may also lead to problems in obtaining a mortgage from the bank, in selling the property, and in other matters.

I had an inheritance arbitration concerning an estate with several properties. Already at the beginning of the proceedings, immediately after the deed of arbitration was signed before me, I asked the parties to check the status of the registrations with the authorities. Only after several hearings, once the parties had checked, did it become clear that some of the properties were not registered in the father’s name at all, but only in the name of the company that had sold them to him, and there were several other problems. This caused a major difficulty in the inheritance agreement between the brothers and in its implementation.

Practical recommendation

According to Halachah, a person can be the owner of a property even if it is not registered in his name. However, if there is a dispute about the property — who is the owner — then in certain cases the registration with the authorities can make the owner the muchzak, the party deemed to be in possession of the property. Therefore, in all types of transactions that are not reported to the authorities for various reasons, one must know that this may have implications regarding ownership and the ability to prove it; some have lost their properties because of failure to register. Therefore, in every sale transaction it is important to consult an expert dayan, as well as an attorney who will thoroughly check with the authorities all matters of registration and the property.

Sources: In the Gemara (Bava Kama 100b), in the sugya of the Reish Galuta, it is explained that a person can be an owner even if the property is not registered in his name, and there is extensive discussion there among the Rishonim, but this is not the place to elaborate. In the Gemara (Bava Batra 52a), regarding a deed in the name of a particular brother, the Gemara disputes upon whom the burden of proof lies, and it is ruled in the Shulchan Aruch (Choshen Mishpat, siman 62, se’if 1) that the person in whose name it is registered is considered the muchzak. See the position of the Tur (Even HaEzer, siman 87), who discusses a husband who wrote property in his wife’s name, and the Shulchan Aruch (Choshen Mishpat, siman 62, se’if 1). The Divrei Geonim (klal 25, ot 11) cites the Chatam Sofer (Responsa, siman 142) that in a case of doubt, the person in whose name it is registered is considered the muchzak. This is also ruled in Sho’el U’Meshiv (Responsa, vol. 3, siman 111). Regarding registration in the names of a couple where one side paid more, there is extensive discussion in the Piskei Din Rabbaniim, and I have elaborated on this in Torat HaMishpat.

From an article.

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